Shall we stay or shall we go? Exit Options and Cabinet Stability

Coalition cabinets are the dominant form of government in multi-party parliamentary democracies. An alliance of two or more parties implies latent conflict potential. Indeed, about a third of all coalitions terminate early due to coalition conflict. This paper examines how the power asymmetries among coalition parties affect conflictious government turnover. One main factor, we argue, is the PM party's credible options to exit the current government and to form an alternative one. The higher the probability leading to an alternative, ideologically more compatible government, the lower the costs of replacing ``trouble makers'' in the ruling cabinet. For the empirical investigation of our theoretical expectations, we rely on a newly compiled data-set that combines the coalition-inclusion probabilities of parties in 25 parliamentary democracies with data on coalition conflict and cabinet duration. With the help of survival analysis, we estimate cabinet stability for 356 coalitions between 1945 and 2020. Our findings have important implications for our understanding of strategic coalition building, bargaining power, and party competition.