Economics
How Pre-Electoral Coalitions Shape Post-Election Bargaining Power
Quick fact
Parties that form a pre-electoral coalition often commit to governing together before the election, and this commitment can paradoxically weaken their post-election bargaining leverage, because exiting the coalition becomes costly and the coalition partners can be 'held hostage' by their pre-election promises.
Why this is interesting
You might think that in an election the biggest party always ends up with the most power. But sometimes, parties that lost the vote end up calling the shots. Why?
Read the full explanation
Understanding How Pre-Electoral Coalitions Shape Post-Election Bargaining Power
Think of two restaurants that decide to combine menus and advertise together before the opening night, promising customers a combined dining experience. After a successful opening, they must decide how to divide the profits. The restaurant that invested more in the shared brand (e.g., paid for the joint ads) has more to lose if the partnership fails, so it may accept a smaller share to keep the deal alive. Similarly, pre-electoral coalitions are agreements between parties to run on a joint platform, support each other's candidates, or commit to forming a government together if they win. After the election, these parties sit down to negotiate the division of ministerial posts and policy concessions. The key is that each party has made campaign promises and often invested resources (money, volunteers, reputation) in the coalition's success. If the coalition fails to form a government, those investments are lost. This creates a 'coalition-specific investment' that strengthens the hand of the party that can credibly walk away, while the party with more sunk costs has less bargaining power.
A deeper explanation
The mechanism works because pre-electoral agreements create a form of commitment that alters the bargaining environment. When parties make a public pact before the election, they signal to voters that they will govern together, and voters may reward them for doing so. After the election, breaking that promise is costly—it can look like betrayal and damage the party's credibility. This 'audience cost' gives each party a stake in the coalition's success. In the post-election negotiation, each party's bargaining power depends on its ability to say 'no' to an unfavorable deal and still get a good outcome. A party with a strong outside option (e.g., it could form a government with another competitor) can demand more. However, if a party has made a large coalition-specific investment (e.g., it tailored its whole platform to the coalition, or its voters expect the coalition to happen), its outside option is worse, and it may have to accept less. Moreover, the larger the coalition's expected rents from office, the more intense the bargaining. In some cases, the party that won fewer votes but holds the pivotal position (the 'kingmaker') can extract concessions. Thus, pre-electoral coalitions shape bargaining power by determining the initial commitment, the size of sunk costs, and the credibility of withdrawal threats.