"Strong" vs. "weak" governments and the challenge of economics reforms

In this project we study economic policy making in 22 Western and Eastern European countries covering a period of up to 30 years (1980-2010). Our focus is on governments and their willingness, capacity, and strategies to introduce reforms in the social, labor, taxation and economic policy areas. The project investigates whether the composition and organization of governments (e.g. policy conflict between coalition partners, ministerial informational advantages and Prime Minister powers), as well as their environment (e.g. external institutions and actors, as well the economy) foster or hinder the introduction of reform measures. For this purpose, the project has, in the first and second funding periods, gathered data on 8,000 government reform ambitions (i.e., reform promises in official government statements) and more than 9,000 important government reform measures introduced by legislation or decrees. This data also includes important information about the content and direction of the reform measures (e.g. tax increases or decreases). Our analyses reveal that the policy programs of parties in governments, responsible ministers, as well prime ministers play an important role for reforms and government productivity. However, their influence differs depending on the type of government, the control mechanisms of parliaments as well as the formal powers of the Prime Minister. We also find evidence for the importance of voters for governmental reform decisions, where we show that governments strategically time reform measures for electoral reasons. In the beginning of the third funding period we will finish the data generating process for all eight Eastern European countries, which provides the unique opportunity to test existing theories from Western countries in a new context. Additionally, our reform database will be updated with more recent years in order to cover the post-2008 financial and economic crisis. This allows us to study government reform making in eastern and western European countries prior to and during the crisis. -1-

Political science and political observers have always viewed certain forms of government as "strong" (decision-making, assertive) (particularly single-party majority cabinets) and others as "weak" (minority cabinets, coalition cabinets). The project examined whether the structural weaknesses of multi-party government can be (partially) compensated for by coalition governance mechanisms. To assess the strength of governments, the project focused on their willingness, ability and strategies to introduce structural reforms in key areas of social, labor, tax and economic policies under different actor constellations and institutional conditions. To this end, the project built a database of governments' actual reform behavior by coding the regular reports of the Economist Intelligence Unit (EIU) and the OECD country reports. More than 14,000 important reform measures in 14 Western and 8 Eastern European countries over a period of around 40 years (1980-2017) were recorded and analyzed. Reform productivity is higher when coalition governments are based on a written coalition agreement. In particular, such agreements limit the negative impact of intra-cabinet ideological conflicts on reform productivity. Equally important is the time spent negotiating the formation of a coalition. Reform productivity is higher under coalition governments whose formation received more time-investment. Negotiation time also moderates the negative impact of ideological conflict within the cabinet on reform productivity. An analysis of government declarations, a cabinet's official commitment to a political program for its term of office, shows that majority governments and single-party governments make more commitments to specific political measures than minority cabinets or coalition governments. Prime ministers with greater constitutional powers over their cabinet members and prior experience in the prime minister's office increase government reform productivity. In general, the willingness to introduce austerity measures decreases towards elections. Governments that have the opportunity and ability to strategically set the timing of political decisions use this to introduce austerity measures. Specifically, these are compact majority governments (minimal winning) and new governments and especially new prime ministers. Such governments introduce austerity measures at the beginning of the legislative period. They can then credibly shift the blame for their austerity measures onto the previous government, from which they inherited the problems that now need to be solved through unpopular measures. Coalition builders should design coalition architectures using the instruments for mutual control of the coalition partners in a complementary and synergistic manner. Rational parties should build efficient or at least effective governance architectures. Nevertheless, the majority of coalition governments choose a coalition architecture that appears to be ineffective or at least inefficient in addressing potential challenges to the coalition government. The coalition governments that have chosen an effective coalition architecture are more durable and are also likely to be more productive in setting policy measures (to be verified).