Bargaining over government

The topic of my dissertation concerns the process of government formation and dissolution in a multiparty parliamentary democracy. I provide both an econometric and a game-theoretic analysis of this birth-death process and devote special attention to the interaction of economic and political factors.;The specific object of my study is the economic analysis of government histories in the multiparty parliamentary system. A government history in such a political regime can be usefully described as a realization of a two-state alternating renewal process, in the terminology of stochastic processes theory. At any given time, we either observe a government in power or the political parties bargaining over a new agreement.;An important characteristic of such a process is the possibility of government turnover between elections. Both the duration of the negotiations over government formation and government tenure are not constitutionally determined and fixed. Rather, they are endogenously determined by the strategic interaction of the political actors in the system. Hence, the type of questions that I try to address with my dissertation relate to the general issues of explaining patterns of delays in reaching agreement and agreement stability in a multilateral bargaining situation with complete information.;The contribution of my work is twofold. On the one hand, the general framework I propose for the econometric analysis of government histories represents an original application of econometric techniques initially proposed by Flinn and Heckman (1982) for the empirical analysis of individual labor market histories. My approach looks at the interaction of political and economic factors from a different perspective than the existing political theories of the business cycle emanating from the work of Nordhaus (1975). On the other hand, the new stochastic bargaining model I propose for the study of the process of government formation in a multiparty parliamentary democracy allows to give an equilibrium interpretation to observed patterns of delays and extends the existing literature on sequential bargaining with complete information which builds on the seminal work of Rubinstein (1982). The stochastic nature of such a model makes it also possible to structurally estimate it.