Government Formation Model

The government formation model is a non-cooperative bargaining theory explaining how a cabinet and the division of its portfolios emerge when no party holds a majority. In the canonical Baron-Ferejohn (1989) framework, a head of state or chance mechanism recognizes one party as formateur with a probability often proportional to its seat share; the formateur proposes a government and an allocation of the spoils of office, and the proposal takes effect only if a legislative majority accepts. Austen-Smith and Banks (1988) embed this in an electoral and coalition setting. The model's signature result is a proposer (formateur) advantage: the party that gets to propose secures a disproportionate share of portfolios.