Coalitions and Cabinet Government

The formal study of coalitions is active in Europe, whereas the formal study of political institutions preoccupies American scholars. We seek to integrate aspects of these two bodies of research. For nearly thirty years models of coalition government have focused more on coalition than on government. Thus, these theories are essentially extensions of the theory of voting in legislatures. Unlike passing a bill or “dividing a dollar,” however, forming a government is not the end of politics but the beginning. During the formation process, rational actors must entertain expectations of subsequent government behavior. We provide a model of rational expectations with an emphasis on the credibility of the policy promises of prospective government partners as determined by the allocation of portfolios in the new government. Portfolio allocation becomes the mechanism by which prospective coalitions make credible promises and so inform the expectations of rational agents in the coalition formation process.