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Fairness and qualitative portfolio allocation in multiparty governments

Abstract

How do political parties divide coalition payoffs in multiparty governments? Perhaps the most striking answer to this question is Gamson’s Law, which suggests a strong fairness norm in the allocation of office payoffs among coalition partners. Building upon recent advancements in portfolio allocation research, we extend this approach in three important ways. First, we study fairness with regard to the allocation of policy (rather than office) payoffs. Second, we introduce measures to assess the fairness of the division of policy payoffs following two norms: envy-freeness and equitability. Third, we explore why some allocations of ministerial portfolios deviate from fairness norms. Based on an original data set of party preferences for individual portfolios in Western and Central Eastern Europe, we find substantial variation in the fairness of policy payoffs across cabinets. Moreover, coalitions are more likely to arrive at envy-free and equitable bargaining outcomes if (1) these fair allocations are based on an allocation of cabinet positions that is proportional to party size and if (2) the bargaining power is distributed evenly among government parties. The results suggest that fairness is not a universal norm for portfolio allocation in multiparty governments, but in fact depends on the cabinet parties’ bargaining positions.

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Notes

  1. 1.

    Ansolabehere et al. (2005) argue that cabinet seat shares should be proportional to party voting weights rather than raw seat shares. Accounting for both voting weights and party seat shares, Warwick and Druckman (2006) and Cutler et al. (2016) show that raw vote shares are better predictors of a party’s seat share in the cabinet than voting weights.

  2. 2.

    The Laver and Shepsle (1996) portfolio-allocation model is an exception, as it builds on a spatial model wherein parties favor different policy positions. This model is zero-sum, at least if all parties assign the same value to each ministry (they relax that assumption in their extended work; see chapter 11 in Laver and Shepsle 1996).

  3. 3.

    The two fairness norms differ from a third concept, namely efficiency (or Pareto-optimality). An allocation is efficient if no other allocation is possible in which at least one party is better off and all other parties are at least no worse off, i.e., they get the same or higher payoffs. However, efficiency in itself is not the same as fairness (Brams and Taylor 1999). For example, if party A holds all ministries and gets 100% of its maximum policy payoff, the allocation is efficient (if party A values all ministries at least somewhat), but it is not really fair. That is why we do not discuss efficiency in detail here.

  4. 4.

    Using unequal entitlements loads the dice against finding the substantial empirical differences between fairness norms (see below), as both conceptualizations incorporate seat-share differences.

  5. 5.

    The selection of cases naturally excludes all single-party minority and majority governments. We exclude additional observations for one or more of the following reasons: (1) multiparty governments with six or more cabinet parties owing to computational problems; (2) cabinets with missing data for party preferences on individual portfolios, either for single government parties or for the entire cabinet; (3) multiparty governments with non-partisan ministers for which preferences for individual ministerial portfolios likewise are unavailable.

  6. 6.

    Alliances running on a joint policy program (e.g., the CDU/CSU in Germany) are treated as one party.

  7. 7.

    The appendix in the supplementary materials provides a full list of ministerial portfolios and assigned issue categories.

  8. 8.

    All script files and replication datasets are publicly available in https://doi.org/10.7910/DVN/GYMNEY.

  9. 9.

    Note that this measure of quantitative proportionality compares seats shares to weighted portfolio shares, thus acknowledging that some ministerial portfolios (e.g., finance and exterior affairs) are more important to all parties than others (e.g., the proverbial ministry of snow). All empirical results are robust to using unweighted portfolio shares such that all portfolios are of equal importance. In fact, the weighted and unweighted estimates of quantitative proportionality correlate with r = 0.99 and r = 0.95 for all potential equitable and envy-free allocations, respectively.

  10. 10.

    Similar to the data on portfolio allocation and policy payoffs, these characteristics largely are retrieved from Müller and Strøm (2000), supplemented with complementary data from 1999 onwards, and Bergman et al. (2019).

  11. 11.

    Another potential concern is the unequal distribution of multiparty governments across countries. Table A1 in the supplementary materials (also available in https://doi.org/10.7910/DVN/GYMNEY) reports the results of a series of weighted OLS models. All empirical findings are robust to this alternative model specification.

  12. 12.

    One potential reason for this non-finding is our measurement approach assuming a single general left–right scale. Classifying portfolios as dealing primarily with economic or social policies and identifying a dimension-specific median party, Bäck et al. (2011) do indeed find a positive effect of median party status on portfolio allocation.

  13. 13.

    The discussion about the recent government formation in Germany (Merkel IV) provides an excellent example, as many observers and partisans feared that Merkel (CDU) sacrificed too many cabinet positions to her coalition partners (CSU and SPD).

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Acknowledgements

This work is based on two research projects: ‘Governments in Europe’ (PI: Torbjörn Bergman) and ‘Coalition governance in Central Eastern Europe’ (PI: Wolfgang C. Müller). Previous versions have been presented at the 2017 EPSA Annual Conference, Milan, the BGSS colloquium, University of Bamberg, and at the Universities of Barcelona and Stuttgart. We thank all participants and the anonymous reviewers for comments on previous versions of the manuscript. We also thank Michael Imre for excellent research assistance. Both authors also gratefully acknowledge financial support from the Austrian Science Fund (FWF) (Grant P25490).

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Ecker, A., Meyer, T.M. Fairness and qualitative portfolio allocation in multiparty governments. Public Choice 181, 309–330 (2019). https://doi.org/10.1007/s11127-019-00658-8

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Keywords

  • Coalition formation
  • Portfolio allocation
  • Gamson’s Law
  • Issue saliency