How is Government Duration Affected by the State of the Economy?

To what extent are incumbent governments affected by the state of the economy when it comes to premature dissolution? This paper investigates this research question using a new dataset on parties and governments for 28 European countries for the period 1945-2011. In addition to investigating the general effect of the state of economy on government termination, we hypothesise that macroeconomic conditions affect cabinet stability in different ways depending to the type of government that is in power. In situations where the government is in a minority or consists of multiple parties, we would expect economic changes to have a more pronounced effect. Using discrete-time survival analysis we manage to make sense of previously mixed results on the effects of changes in the economy by demonstrating that economic variables matter only for certain types governments.