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Dutch Elections (Finally)

- June 8, 2010

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Some of you may remember that back in February, I wrote a few blog posts about the collapse of the Dutch cabinet over the renewal over its mission in Afghanistan. Well, tomorrow the elections for a new parliament will finally be held. It is pretty remarkable how slow this process works in the Netherlands. Gordon Brown called for new elections in April and by mid-May the Brits had a new government. Even after these elections, it is probably going to take at least three months for a new cabinet to form. So, in the midst of an economic crisis the Netherlands will be without a fully functioning government for six months or more. Moreover, the timing of the elections really matters. As the graph above shows, the PvdA (Social Democrats, left wing) benefited tremendously from forcing the cabinet crisis. If the elections had been held in mid-March, they would have likely become the largest party and would have likely delivered the prime-minister. Now it appears that the VVD (Liberals, right wing) will become the largest party and deliver the prime-minister for the first time in its history.

Whatever the results, the coalition formation process will be terribly complicated. According to the Dutch political stock markets (see below), the most likely is a so-called purple coalition between a set of socially liberal parties from the economic left and right. This may be a bit surprising: One would think that in times of economic crisis parties would seek alliances with parties closer to them on economic issues, although the Dutch have a history of pushing economic reform through compromises between labor unions and employers. In any case, as the odds below illustrate, it is far from certain how things will work out. The second most likely option is that some “other” than the ten listed coalition possibilities will form. This is unusual even for the Netherlands. Some voters are trying to anticipate how their choice will affect the coalition formation process: about one-fifth of all voters say that they will vote strategically. This will mean different things to different people. For example, some may allocate their vote in a way that they think will maximize the probability of keeping the PVV and Geert Wilders out of office whereas others are motivated by keeping the PvdA out. If all of this illustrates one general point, it may well be that Andrew Gelman is right that “elections are inherently more unstable when more than two candidates are involved”.

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