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Intra-party politics and interest groups: missing links in explaining government effectiveness

Abstract

The article sheds light on two missing links in the existing literature on government’s policy preferences and policy choices, namely the roles played by party factions and trade unions as political actors able to affect government’s decision-making power. The content analysis of a wide typology of documents (i.e., investiture speeches, parliamentary debates, motions discussed during parties’ and trade unions’ congresses) allows to locate cabinets, parties, party factions and trade unions on a common pro-state/pro-market scale. Using these new data sources, we perform a multivariate time-series analysis to estimate the relative impact of those political actors on social expenditure in Italy throughout its modern history (1946–2015). The results support the idea that intra-party dynamics and trade unions’ preferences do matter. Indeed, government’s ability to retrench the welfare state vanishes when the Prime Minister’s party is highly polarized internally and when trade unions are more cohesive.

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Notes

  1. Recent work has pointed out that electoral costs are not distributed equally among coalescing parties (Hjermitslev 2018). Thus, we can hypothesize that party leaders are not bounded by internal factionalism to the same extent: those with stronger valence qualities and/or electoral support are likely to be less constrained by factions (see also Ceron 2012). Unfortunately, we cannot test this conditional effect with the data at hands. That opens avenues for further developments.

  2. In the Online Appendix, we also test whether trade unions’ policy positions affect a government’s ability to cut social expenditure. Table A9 adds a new variable, Trade Unions’ Position, which is equal to the mean of the CGIL’s and the CISL’s positions on the economic policy scale. The estimated coefficients on Trade Unions’ Position do not reach conventional levels of statistical significance. However, our two hypotheses are confirmed even when including the additional control.

  3. To test the robustness of our findings with respect to the dominant role played by the Democrazia Cristiana—Christian Democracy (DC) during the First Italian Republic, we run our model specification for intra-party factionalism on two separate subsamples: the first one restricted to the budgetary laws adopted by DC PMs; the other restricted to the ones adopted by PMs who were leaders of other parties. The results hold the same in both the subsamples, thus confirming that they are not biased by the DC’s dominant role. The estimates are available upon request.

  4. See the Online Appendix—Table A2 for the list of the categories included in the economic policy scale.

  5. The convergent validity of the policy scores from our dataset on investiture speeches also appears to be satisfactory. Please see the Online Appendix—Sect. 3.2 for the complete validation exercise.

  6. Figure A1 in the Online Appendix displays the positions of factions in the PM’s party over time. Point estimates demonstrate that left-wing factions adopt positions on the economic policy scale that are more pro-state (− 0.786; standard error 0.109) and statistically different from those supported by the other factions (− 0.305; standard error 0.060).

  7. We replicate the analysis by imputing the IPD of the major party supporting those three independent PMs. The results hold. Estimates are available upon request.

  8. We omitted the smaller Unione Italiana dei Lavoratori (Italian Union of Workers—UIL), founded in 1949 by republican and social democratic union members, which represents only approximately 10% of the unionized workforce, and lies (ideologically) between CGIL and CISL.

  9. Figure A2 in the Online Appendix displays the evolution of CGIL’s and CISL’s positions over time. The estimates suggest that the CGIL is slightly to the left of the CISL, although the difference is not statistically significant.

  10. To annualize the index of IGD, we follow the same procedure used for PMs’ speeches.

  11. Additional models are proposed and discussed in the Online Appendix—Sect. 2. They test the robustness of our findings to different specifications of the dependent variable, add socioeconomic and institutional control variables and change the temporal lag between the day on which a government takes office and the budgetary choices for which that government can be considered to be responsible. All our findings hold.

  12. We also assess whether high values of IPD prevent left-wing governments from increasing social expenditure (or reducing its retrenchment) by recoding governments’ positions so that higher numbers point to the pro-state pole of the economic scale. In line with H1, the results suggest that a PM willing to increase social expenditure is unable to do so when IPD reaches 0.1. Thus, no matter what the PM’s preferences may be, high levels of IPD generate a status-quo bias, as they imply more veto players. The estimates are available upon request.

  13. We compared the explanatory power of our new measure of trade unions’ ideological cohesion (TUD) to the one of more conventional measures, such as trade union density (OECD) and number/hours of strikes (ISTAT). If TUD is substituted with trade union density, or number/hours of strikes, its effects are not statistically significant, meaning that those variables do not capture the same phenomenon (estimates available upon request). On the other hand, when the more conventional measures are added to our model specifications, TUD retains its sign and statistical significance. The estimates reported in the Online Appendix—Table A4.

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Acknowledgements

The authors are grateful to Fabio Franchino and Robert Franzese for their helpful comments and suggestions. An early version of this paper has been presented at the II International Conference on Public Policy (2015) in Milan, at the VI General Conference of the European Political Science Association (2016) in Brussels and at the General Conference of the Italian Political Science Association (2016) in Milan. We thank the discussants and the participants for their comments.

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Ceron, A., Curini, L. & Negri, F. Intra-party politics and interest groups: missing links in explaining government effectiveness. Public Choice 180, 407–427 (2019). https://doi.org/10.1007/s11127-019-00644-0

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Keywords

  • Government partisanship
  • Intra-party politics
  • Trade unions
  • Parliamentary speeches
  • Social expenditure

JEL Classification

  • D72
  • E62
  • H53