Portfolio Allocation in Parliamentary Governments

The distribution of cabinet seats among coalition partners is puzzling: portfolio allocations tend to be highly proportional, with a small-party bias, while legislative bargaining models typically predict over-compensation of formateur parties. Some more recent bargaining models of government formation is more consistent with Gamson’s Law. Partly drawing on this work, we investigate how variation in the involvement of legislators in the making and breaking of governments affects the share of portfolios that formateur parties reap. We argue that restrictive rules for government formation and termination increase the prospects of coalition durability and provide formateur parties with weaker incentives to overcompensate coalition partners in exchange for their support. Our results confirm that absolute majority requirements for cabinet formation and removal tend to advantage formateur parties in portfolio allocation. Specifically, we find that formateur parties on average receive 9% higher share of portfolios compared with other parties in countries with an absolute majority requirement for government removal, and 12% higher in countries with absolute majority investiture requirements. Consequently, the small-party bias in portfolio allocation is reduced by about 4% in countries with strong investiture and no-confidence institutions. These findings are robust to various coalition characteristics and national settings. The analysis more than doubles the number of observations compared to previous studies by covering portfolio allocation in 569 coalition governments in 30 parliamentary democracies 1945-2014. Moreover, we improve measurement of portfolio allocation by basing calculations on the Sainte-Lagüe divisor method, removing cabinet-size bias, and providing a substantially meaningful measure of under- and overrepresentation of parties in coalition governments.