Dissertation Title

Portfolio Allocation as Leadership Strategy: Bargaining among and within Parties

Dissertation Abstract

My dissertation sheds new light on the way cabinet seats are allocated among political parties as well as party factions. In parliamentary democracies, cabinet ministers hold very important positions because they make policies and oversee the implementation of policy on behalf of the government. In the existing literature on coalition governance, some argue that such cabinet posts will be allocated proportional to a party’s seat share in the coalition (Gamson’s law), while others argue that the formateur party—the party formally given the first opportunity to build a coalition and typically the party from which the prime minister hails—will get a share that is more than proportional to its seat share. However, in many coalition governments in Western Europe, prime ministerial parties actually receive fewer cabinet posts than they should under the aforementioned theories. Moreover, these allocation outcomes vary considerably over time and across countries. Why do prime ministerial parties accept a weaker position than their parliamentary representation would predict?

To understand the significant variation in allocation outcomes, I introduce a theoretical framework that accounts for portfolio allocation as a product of a prime minister’s “political strategy.” The prime minister of a coalition government is concerned about productive policy-making as well as the long-term survival of the government. These concerns affect the bargains that the prime minister will choose to strike with potential and existing coalition partners. From this framework, I develop a game-theoretic model that articulates the circumstances under which the prime minister of a coalition government is likely to surrender various numbers of cabinet seats. I then evaluate the model’s predictions by drawing on data from coalition governments in thirteen Western European countries. The empirical work demonstrates that the prime minister uses portfolio allocation as an instrument to defuse tensions among coalition partners as well as to reward them for joining the ruling coalition. I find that the prime minister’s party surrenders more cabinet seats not only as its bargaining power in assembling a coalition declines, but also as the policy preferences of coalition partners become more divergent.

Since bargaining over cabinet seats also takes place within parties, I further extend my theoretical framework to explain portfolio allocation among party factions. Party leaders decide how to allocate cabinet posts among their party’s members, but many do so while cognizant of internal divisions among their party’s factions. To explore how the dynamics of portfolio allocation work within parties, I examine an important case in Japan where the long tenure in power of the Liberal Democratic Party (LDP) allows us to investigate systematic variation in allocation outcomes. The empirical findings suggest that substantial variance exists in allocation outcomes over time because, similar to prime ministers in coalition governments, party leaders also allocate cabinet posts among factions strategically to prevent defections and challenges from internal rivals; therefore, their factions surrender more cabinet seats as they becomes more vulnerable to challenges posed by internal rivals. The resulting portfolio allocation reflects the bargaining dynamics within the party and affects the extent to which party members are willing to behave in a disciplined manner in the parliament.

Committee

Arthur Lupia (chair), William R. Clark, Anna Grzymala-Busse, Orit Kedar, and Daisuke Nakajima (UM Economics)