Political Institutions, Governments, and Parties

The chapter explores the relationship between the countries’ political and institutional settings and different development paths. Theoretically driven by Lijphart’s influential contribution on the role that different models of democracy play in affecting the countries’ economic and social performances, we empirically question the existence of this relationship in the 18 advanced democracies included in this volume over a period ranging from 1960 to 2015. In order to do so, we consider both institutional and strictly political variables, including the concentration of executive power, (dis)proportionality of the electoral system, union consultation, the composition of governments, the strength and fragmentation of political parties on the left. Overall, majoritarian democracies appear most often associated with non-inclusive models of development. Thus, countries with a majority electoral system, with higher levels of electoral disproportionality, where negotiation with unions and the presence of the left in governments is more limited, characterize for low social spending and higher inequality. For consensus democracies, however, the association is not as straightforward. Additionally, the presence of the left in governments, for a long time considered as a crucial explanatory variable accounting for the countries’ social spending and inequality reduction, appears as irrelevant in the decades following the 1980s. This suggests the importance in affecting welfare outcomes of path dependency explanations as well as of degrees of fragmentation within the left.