Sebastian M. Saiegh

Government Coalitions and Legislative Success Under Presidentialism and Parliamentarism

Are government coalitions less frequent under presidentialism than under parliamentarism? Do legislative deadlocks occur when presidents do not form majoritarian governments? Are presidential democracies more brittle when they are ruled by minorities? We answer these questions observing almost all democracies that existed between 1946 and 1999. It turns out that government coalitions occur in more than one half of the situations in which the presidents party does not have a majority, that minority governments are not less successful legislatively than majority coalitions in both systems, and that the coalition status of the government has no impact on the survival of democracy in either system. Hence, whatever is wrong with presidentialism, is not due to the difficulty of forming coalitions.

Do Countries Have a “Democratic Advantage”? Political Institutions, Multilateral Agencies, and Sovereign Borrowing

This article examines the effect of political institutions on countries’ risk characteristics and the role that domestic political institutions play in determining the interest rates charged to less developed countries. According to the “democratic advantage” argument, democracies should pay lower interest rates than authoritarian regimes because they are better able to make credible commitments. The author argues that such a claim must be revised in the case of developing countries. The results presented in this article support this assertion. First, they show that democracies are more likely to reschedule their debts, so they have no advantage; rather, the opposite is true. Second, there does not appear to be a significant difference between the interest rates paid by democracies and nondemocracies.

Sovereign Debt and Regime Type: Reconsidering the Democratic Advantage

The literature exploiting historical data generally supports the democratic advantage thesis, which holds that democracies can sell more bonds on better terms than their authoritarian counterparts. However, studies of more recent—and extensive—data sets find that democracies have received no more favorable bond ratings from credit rating agencies than otherwise similar autocracies; and have been no less prone to default. These findings raise the question: where is the democratic advantage? Our answer is that previous assessments of the democratic advantage have typically (1) ignored the democratic advantage in credit access; (2) failed to account for selection effects; and (3) treated GDP per capita as an exogenous variable, ignoring the many arguments that suggest economic development is endogenous to political institutions. We develop an estimator of how regime type affects credit access and credit ratings analogous to the “reservation wage†model of labor supply and treat GDP per capita as an endogenous variable. Our findings indicate that the democratic advantage in the postwar era has two components: first, better access to credit (most autocracies cannot even enter the international bond markets); and second, better ratings, once propensity to enter the market is controlled and GDP per capita is endogenized.

Political Institutions, Policymaking Processes and Policy Outcomes in Paraguay, 1954-2003

This paper characterizes the evolution of Paraguays policymaking process (PMP) between 1954 and 2003. The authors present an overview of the PMP under the rule of Alfredo Stroessner (1954-89) and explore the institutional setting emerging after 1989. In addition, they discuss how the Colorado Party progressively broke up into several factions and characterize the distinctive patterns of policymaking that emerged after the adoption of the 1992 Constitution. The authors hypothesize that the presence of a large number of veto players has made policy change more difficult and that legislators are inclined to pursue particularistic policies. In order to test those hypotheses, they rely on a database containing virtually every bill introduced in Congress since April 1992. The conclusions suggest that the current Paraguayan PMP may be flexible for the provision of particularistic benefits but is rigid for the approval of broad regulatory or redistributive policies.

Coalition Governments and Sovereign Debt Crises

This article examines the domestic politics of sovereign debt crises. I focus on two alternative mechanisms that aggregate the preferences of domestic actors over debt repayment: single-party versus multiparty coalition governments. I uncover a very strong empirical regularity using cross-national data from 48 developing countries between 1971 and 1997. Countries that are governed by a coalition of parties are less likely to reschedule their debts than those under single-party governments. The effect of multiparty coalitions on sovereign defaults is quantitatively large and roughly of the same order of magnitude as liquidity factors such as debt burden and debt service. These results are robust to numerous specifications and samples.

Governos de Coalizão nas Democracias Presidencialistas e Parlamentaristas

Are government coalitions less frequent under presidentialism than under parliamentarism? The only difference be w e the two systems is that unscheduled elections are held under parliamentarism in those situations in which under presidentialism a majority legislative coalition opposes the executive. In both systems, portfolio coalitions are formed only when the formateur party and the one closest to it are relatively distant in policy terms. Otherwise, the formateur party governs alone, satisfied with the legislative outcomes. Hence, portfolio minority governments need not be less effective legislatively than coalition governments. Whatever is wrong with presidentialism, is not due to the difficulty of forming coalitions.

Political realignment and democratic breakdown in Argentina, 1916–1930:

This article revisits one historical event that has been repeatedly discussed in the literature on democratic breakdown: the rise and fall of Argentine democracy between 1916 and 1930. First, we demonstrate why the claim that demands for drastic redistribution led to democratic breakdown is not a convincing explanation for the 1930 coup. Instead, we contend that the coup was the product of a polarizing political realignment that led to a legitimacy crisis. We evaluate this argument using estimates of Argentine legislators’ latent preferences (ideal points) between 1916 and 1930. Our roll-call data analysis suggests that disputes over socio-economic issues did not precipitate the breakdown of the regime. What mattered was the allocation of political power. These findings support the view that stable democracy requires that all major groups in society have a sufficiently large chance of being in power.

The Political Economy of Productivity in Argentina: Interpretation and Illustration

This paper examines how the main characteristics of Argentinas policymaking process (PMP) affect the productivity of its economy using the conceptual framework presented in Murillo, Scartascini and Tommasi (2008), Stein et al. (2008), Spiller and Tommasi (2007), and IDB (2005). First, the paper complements existing descriptions of the PMP by considering private agents and elaborating on structural characteristics possibly conducive to policymaking instability. Second, the paper illustrates the (negative) impact of Argentinas low-quality and myopic PMP equilibrium on productivity by examining two key areas: provision of infrastructure services and agricultural policy. Finally, the paper explores the PMP at the local level of government (municipalities and local communities), finding that it mimics the flaws observed at the federal level.

Executive Constraint and Sovereign Debt: Quasi-Experimental Evidence From Argentina During the Baring Crisis:

The literature on whether executive constraint improves the credibility of sovereign debt takes the political regime as the unit of analysis, typically computing an average yield or price for each regime, and then relating that average to regime characteristics. In this article, we take the individual bond issue as the unit of analysis, examining quasi-experimental evidence from two Argentine sovereign debts issued in the 1880s. The loans were sought by the same government and offered nearly identical terms to borrowers, except that one was funded and the other was unfunded. The loans sold at virtually the same price until the Baring crisis of November 16, 1890 erupted. Thereafter, their price histories diverged markedly. We analyze the market’s evolving valuation of the two loans before and after the Baring crisis using a difference-in-differences estimator and weekly price data. Our study shows that exposure to executive discretion strongly influences market assessments of value.

Hamilton's Paradox: The Promise and Peril of Fiscal Federalism

concludes essentially that more research is needed. For example, while she notes that ballot access probably influences the decision for radical right parties to enter the electoral arena in the first place, this judgment is based on a brief look at several cases. Similarly, Norris rightly claims that it is important for radical right parties to consolidate themselves in party systems, but she does not treat the impact of party organization in much depth. Both subjects cry out for more research. Norris’s central argument is that “the broader institutional context, particularly the electoral rules, affects the electoral strategies that radical right parties adopt to maximize their appeal, and hence that the role of ideological cues and populist appeals vary in generating voting support for these parties” (214). As she notes in several places, this is not a novel argument. There is a large body of literature demonstrating that proportional representation systems are centrifugal, while majoritarian systems are centripetal. To prosper in the former, radical right parties need to appeal to a broad range of voters through vague populist appeals. To succeed in the latter, they need only concentrate on their signature issues. The implication is that there is a winning strategy for each system; parties that fail to follow it are doomed. This is a plausible argument, for which Norris provides some support using evidence from four case studies. However, this is clearly just a first step; her concepts need to be further refined to allow for more rigorous testing. For example, Norris uses affective orientations toward radical right parties as a proxy for “populism.” Given that the meaning of this term is both central to her theory and widely contested, a better indicator needs to be found for it. While Norris’ book deserves a wide readership among students of comparative politics in different subfields, qualitatively oriented comparativists and Europeanists will find much with which to quibble. For example, does it make sense to include cases like Thailand, Romania, Peru and Belarus in the same sample, as advanced industrial countries, or does this push Mill’s “method of difference” too far? Additionally, while Norris is critical of using data from the Comparative Manifesto Project to study the radical right because its coding scheme predates the salience of such parties, she relies on the data in several places, particularly to assess the validity of the “contagion of the right” thesis. To her credit, Norris recognizes the limitations of both her data and her theory. In several places, she notes that her explanation “remains open to further development” (37), acknowledging that her book “has only sketched out certain features leading to toward the success of the radical right” (269). In this, it succeeds admirably, making it necessary reading for anyone interested in the contemporary radical right.