Ideologies, status quo, and parties�� outside options in parliamentary politics
Journal
International Journal of Economic Theory
Journal Volume
12
Journal Issue
3
Pages
279-297
Date Issued
2016
Author(s)
Abstract
Abstract This paper discusses the effect of the status quo policy versus parties’ “outside options,” which are defined as the benefits when parties are not in government, on the determination of the political equilibrium in parliamentary politics. As the value of outside options increases, the status quo becomes less important relative to outside options in terms of the parties’ bargaining strength. It is shown, among other things, that if the value of outside options is intermediate, two extreme parties may form a “disconnected coalition” in equilibrium; and if the value of outside options becomes sufficiently high, the status quo no longer maintains its grip on outcomes and the median‐voter theorem holds in essence.
SDGs
Type
journal article