Does Party-System Fragmentation Affect the Quality of Democracy?

Abstract

Given their central role in the process of decision making, party-systems are usually expected to affect a number of democratic outcomes. Research on this topic, however, has suffered from problems of endogeneity stemming from the fact that the characteristics of the party system are endogenous to many other dynamics in a polity. We overcome this issue by putting forward an instrument for the number of parties in a system, based on the level of fragmentation added by parties that narrowly make it to parliament. We then test the effect of party-system fragmentation on the quality of democracy, drawing upon a large battery of outcomes. Running against previous literature, we find that a higher number of parties leads to more fractionalized governments, but it has no impact on other democratic outcomes. The null effect persists after using a large number of different model specifications, operationalizations of the treatment variable and subsamples. Our results cast doubt on the normative implications of party-system fragmentation.

Keywords: party systems, quality of democracy, null findings, instrumental variables, causal inference