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Bicameralism and Government Formation

53 Pages Posted: 15 Jul 2004  

Daniel Diermeier

Northwestern University - Kellogg School of Management

Hulya Eraslan

Rice University

Antonio Merlo

University of Pennsylvania - Department of Economics; Rice University

Date Written: May 2004


In this paper we present a structural approach to the study of government formation in multi-party parliamentary democracies. The approach is based on the estimation of a stochastic bargaining model which we use to investigate the effects of specific institutional features of parliamentary democracy on the formation and stability of coalition governments. We then apply our methodology to estimate the effects of governmental bicameralism. Our main findings are that eliminating bicameralism does not affect government durability, but does have a significant effect on the composition of governments leading to smaller coalitions. These results are due to an equilibrium replacement effect: removing bicameralism affects the relative durability of coalitions of different sizes which in turn induces changes in the coalitions that are chosen in equilibrium.

Keywords: Political Stability, Government Formation, Government Dissolution, Bicameralism, Comparative Constitutional Design

JEL Classification: D72, H19, C73

Suggested Citation

Diermeier, Daniel and Eraslan, Hulya and Merlo, Antonio, Bicameralism and Government Formation (May 2004). FEEM Working Paper No. 81.04; PIER Working Paper No. 02-010. Available at SSRN: or

Daniel Diermeier

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Hulya Eraslan

Rice University ( email )

Department of Economics MS-22
Rice University P.O Box 1892
Houston, TX Texas 77251-1892
United States
7133483453 (Phone)


Antonio M. Merlo (Contact Author)

University of Pennsylvania - Department of Economics ( email )

160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-7933 (Phone)
215-573-2057 (Fax)


Rice University ( email )

6100 South Main Street
Houston, TX 77005-1892
United States

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