Small parties heading government: What are the costs and what can we learn ahead of possible Bennett-Lapid rotation in Israel?

The following is a post by Or Tuttnauer, based on a thread on Twitter. I asked Or if I could turn it into a F&V post, and he kindly agreed.

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In Israel, Yair Lapid (Yesh Atid) and Naftali Bennett (Yamina) are trying now to form a cabinet, with Bennett the first prime minister in a rotation between the two. One problem (among others) – Bennett’s party commands only 6% of the parliament. Critics say he will lose even that at next election if he takes a turn as PM. Will he?  

I looked at  http://Parlgov.org  data of 474 PM-parties in 29 countries over 70 years (1945-2015) and how they fared in the next elections.

As the scatter plot shows, the vast majority of these parties lose votes in subsequent elections. Governing has its costs. But most PM parties are much larger than Bennett’s.

To figure out how change in vote share depends on vote share, I ran a regression with the former as DV, and the latter as well as its square value to allow for non-linearity. Turns out most parties lose votes, but not the small ones – below 30%. These are parties smaller than the average or median PM-party in the data (37% and 36%, respectively). For these smaller ruling party, the predicted gain or loss is indistinguishable from zero. Compared to the fortunes of the larger ruling parties, not losing, and not gaining votes is good news. Lucky for Bennett! 

But wait! what about ideology? Bennett’s party is also far from the centre, isn’t that a precarious position for a ruling party? Well, if we add an interaction with extremity, we see that at the very low end, extreme parties of up to 15% vote share seem to actually gain votes. This is intriguing. Perhaps (as suggested to me by Matthew Shugart), these extreme parties gain credibility after heading a government and are therefore perceived in the next elections as more moderate or mainstream than their ideology would otherwise suggest, leading to a wider electoral support. However, it may also be that there are too few cases in this range to make a meaningful inference.

So, should Bennett risk it and be PM? I say yes. First, if you follow Israeli politics, you know this is better than the alternative (if you don’t, trust me). Also, you don’t get many chances to become PM. And political narratives – like history – are written by the winner.

Appendix

Below is the list of past cases of small PM parties, their extremity, and their vote share change at the next election.

Country	Party	Cabinet start date	Cabinet name	Extremity	vote share (t)	Vote share change
BEL	PVVVLD	12-Jul-99	Verhofstadt I	2.0053	14.3	1.06
NOR	KrF	17-Oct-97	Bondevik I	0.8516	13.7	-1.2
SVN	NSI	16-May-90	Peterle	2.9345	13	1.51
ISL	A	28-Jun-59	Jonsson II	0.5556	12.5	2.7
NOR	KrF	19-Oct-01	Bondevik II	0.8516	12.5	-5.7
DNK	V	19-Dec-73	Hartling	2.292	12.3	11
BEL	PVVVLD	10-Jun-07	Verhofstadt III	2.0053	11.83	-3.19
FRA	RPR	20-Mar-86	Chirac II	2.4997	11.5	7.7
ITA	PSI	4-Aug-83	Craxi I	1.2278	11.4	2.9
BEL	CVP	13-Jun-10	Leterme III	0.7667	10.85	0.76
NOR	Sp	12-Oct-65	Borten I	0.3435	9.8	-0.8
NOR	Sp	7-Sep-69	Borten II	0.3435	9	2.03
POL	PC	23-Dec-91	Olszewski	0.5556	8.7	-4.28
NLD	ARP	7-Jun-71	Biesheuvel I	0.8067	8.59	0.25
FIN	RKP-SFP	5-May-54	Torngren	1.3906	6.8	-0.3