Cause and consequence: Electoral volatility in the modern democractic polity

This dissertation investigates the causes and consequences of a core value of democracy: the ability of citizens to change the balance of power amongst the political parties that represent them—a phenomenon known as electoral volatility. I first study causes, arguing that citizens support parties that successfully implement important policies during their time in office and reject those that do not. I advance previous work by testing the argument that institutions channel the sort of change that may occur. I argue that institutions act to moderate the prospects of opposition parties at election time, presenting two aspects of change: shifts in support for existing experienced parties and emerging support for new parties. I find, among other results, that mixed electoral systems provide opportunities for new parties that other systems impede.;In the next analyses, I examine the effects of existing and new forms of electoral volatility on delays in bargaining over cabinet positions after elections. I contend that delays are conditioned by two factors: uncertainty regarding the preferences of potential government parties for certain posts and the complexity of rule sets and contextual situations. I advance a counter-intuitive argument: experienced parties should know the rules and their partners--hence complexity should not be a problem. Yet as these experienced parties seek to maximize the number of posts they hold, concessions should be difficult to achieve—thus formations should take longer. On the other hand, new parties should be inexperienced and should hold known preferences for particular cabinet posts. Veteran bargaining partners are likely to exploit this, satisfying new partners with less than they might cede otherwise and forming governments faster. My results, derived from quantitative analysis and field work in the state of Israel, support these arguments.;Finally, I examine the effects of both electoral volatility and government formation delays on a critical source of income for modern democracies: the purchase of domestic businesses by foreign firms—a practice known as foreign direct investment (FDI). I test the argument that democratic political phenomena often considered abhorrent (such as volatile elections and lengthy government formations) can serve to attract investors by keeping governments and lawmakers out of the way. Among other interesting results, I find that new party volatility and legislative polarization can serve to increase FDI rather than reduce it.;This dissertation provides important contributions to the understanding of democratic politics in several ways. First, it helps to explain why established parties succeed and why new parties emerge within democracies. Second, it advances the study of government formations by allowing for nuanced view of cabinet negotiations following elections. Finally, my work provides insights for scholars of both comparative politics and political economy as it connects democratic politics to an important tangible consequence: inflows of foreign direct investment.