Coalition Bargaining Time and Governments’ Policy-Making Productivity

What is the purpose of lengthy negotiations when a coalition government forms? Do they make a difference in coalition policy-making? Negotiations that produce policy agreements between coalition partners have been suggested to strengthen the capacity of coalition governments to make policy reforms. We argue that bargaining time, regardless if it results in a written policy agreement or not, is an investment in future government reform productivity. Longer negotiation periods indicate that the bargaining parties have negotiated deals over conflicting policy issues and have allowed parties to build trust between them and gain support for future policies within the party organization, promoting reform productivity. Further, we expect that longer negotiation periods can mitigate problems of policy conflict within cabinets, thereby resulting in higher reform productivity. We evaluate our theoretical expectations using a data set on economic reform measures introduced in 10 Western European countries (1978–2017), based on a coding of more than 1000 periodical country reports issued by the Economist Intelligence Unit and the Organisation for Economic Co-operation and Development. The results show support for our expectations, demonstrating that economic reform productivity is higher in coalition governments that have bargained for a longer time when forming. We also find support for the claim that bargaining time mitigates the negative effect of intra-cabinet ideological conflict on reform productivity.