Cabinet Decision Rules and Political Uncertainty in Parliamentary Bargaining

Abstract

We investigate how cabinet decision-making rules interact with political uncertainty to affect the outcomes of bargaining processes in parliamentary systems. Our formal models compare two types of decisions rules: (1) those that give prime ministers unilateral authority to demand a vote of confidence and (2) those that require prime ministers to obtain collective cabinet approval for confidence motions. We examine these models under assumptions of complete information and of political uncertainty, that is, party leaders lack information about the precise policies that others in the governing coalition will support. Our analysis suggests that the nature of the cabinet decision rules should influence the distribution of bargaining power, the ability to exploit political uncertainty, the likelihood of inefficient government terminations, the circumstances surrounding such failures, and, indirectly, the political considerations that parties face when choosing prime ministers during government formation. Simple empirical tests support some of these insights.