the aggregation incentives will be, and the higher the probability

that the largest legislative party will also be the party of the president.

However, the effect of concurrent elections is conditional on the

number of viable presidential candidates. Where the presidential elec-

toral system regularly produces two strong presidential contenders,

candidates for the legislature are better able to distinguish between

front-running and trailing candidates and thus able to aggregate stra-

tegically. The number of viable presidential candidates, then, is key to

understanding aggregation incentives. Concurrent elections have their

strongest effect when there are two clear frontrunners for the presi-

dency. If distinguishing the frontrunners is dif¬cult, then the probability

that the largest legislative party will also capture the presidency is

greatly reduced, and so are the incentives to coordinate across districts.

This is true even when presidential and legislative elections are con-

current. A handful of recent studies ¬nd that a large number of presi-

dential candidates can completely undermine the effect of concurrent

elections on the number of parties (Amorim-Neto and Cox 1997;

Chhibber and Kollman 2004; Golder 2006).

What types of factors affect the number of viable presidential

candidates? The degree of social heterogeneity is one important factor “

greater ethnic fractionalization, for example, puts upward pressure on

the effective number of presidential candidates.20 However, just as the

social structure and electoral institutions interact to determine the

number of parties at the district level, so to do these variables interact to

shape the number of presidential candidates. Social heterogeneity only

increases the effective number of candidates when combined with a

permissive presidential electoral formula (Golder 2006). “Strong”

20

The effective number of presidential candidates is calculated by dividing 1 by the sum

of each candidate™s squared vote share: 1/Rvi2.

Building Party Systems in Developing Democracies

42

formulas such as the plurality rule generally produce fewer viable

candidates than more permissive arrangements (e.g., majority runoff),

even in the face of social heterogeneity. Indeed, several scholars have

found that more restrictive electoral rules produce fewer candidates than

more permissive rules (Cox 1997; Jones 1997; Jones 1999; Jones 2004;

Golder 2006). In short, consistent with Duverger™s law, restrictive rules

push the number of presidential candidates toward two, even where

there is a high degree of social heterogeneity (Golder 2006).21

A second, but oft overlooked factor that helps shape the number of

presidential candidates is the rule governing presidential reelection.

Systems with term limits, particularly those that ban any reelection,

should be associated with a higher number of viable presidential

candidates compared to those that do not limit reelection (Jones

1999). Why would limits on reelection be associated with more viable

presidential candidates? Assuming that presidential of¬ce has some

value and that there is open contestation for the of¬ce, there will

always be multiple possible presidential hopefuls. Yet often it is the

case that all but two of those hopefuls drop out of the contest along the

way, or never enter the race in the ¬rst place. Why? One factor, as

discussed previously, is certainly the restrictiveness of the electoral

formula. But another key factor that whittles down the ¬eld of can-

didates is the presence of an incumbent. In all democracies, the pres-

ence of an incumbent signi¬cantly raises the entry barrier for potential

challengers. Incumbents generally have better name recognition than

challengers and are able to bring the power, resources, and networks

associated with political of¬ce to bear on the campaign. In addition,

presidents (and presidential contenders) who are eligible for reelection

have strong incentives to invest in building and maintaining an

effective party organization and base of support “ assets that can be

mobilized for future presidential contests.22 The net effect of incum-

bency is to encourage an incumbent™s opponents to coordinate in

21

Evidence about the direct effect of social heterogeneity on the effective number of

presidential candidates is mixed (see, for example, Jones 1997; Jones 2004).

22

Note that candidates facing a single term limit might still have reasons to party-build

if the reelection ban applies only to consecutive reelection. The prospect of a future

run for of¬ce can be enough to induce lame-duck incumbents to take a longer-term

view. Lame-duck presidents may also have an incentive to party-build if their future

career prospects are tied to the party.

A Theory of Aggregation Incentives 43

support of a single standard-bearer for the opposition in order to

maximize their prospects at the ballot box.23

The lack of an incumbent, either by rule or the incumbent™s choice,

can dramatically reduce the entry barriers for presidential hopefuls.24

Why, though, would not a strong electoral formula eventually push

the effective number of presidential candidates down to 2, even if there

are multiple candidates to begin with? Indeed, that is what we would

expect given Duverger™s law and Cox™s M þ 1 rule. In single-seat

plurality contests, all but the two frontrunners should eventually

withdraw from the race (strategic entry). Where trailing candidates

fail to withdraw, voters should respond by voting strategically for

their most preferred of the two frontrunners (strategic voting). The

end result of this strategic behavior is an effective number of presi-

dential candidates near 2.

However, recall that in order for Duverger™s law and the M þ 1 rule to

work as predicted, certain assumptions must be met. One of these is that

voters, candidates, donors, and the like must be able to clearly identify

the two front-running candidates.25 Where they cannot do so, the

coordination on two candidates breaks down. Returning to the issue of

incumbency, I argue that without an incumbent in the race it will be more

dif¬cult to identify the two frontrunners, ceteris paribus. Imagine, for

example, a presidential contest in which there is one clear frontrunner

among all challengers. Where there is an incumbent in the race, identi-

fying the two frontrunners is relatively simple. If, however, there is not an

incumbent, actors have good information about one of the frontrunners,

but may have dif¬culty determining which of the remaining candidates is

the other frontrunner. A more concrete example is the case of the 1992

Philippine presidential election, which will be discussed in more detail in

Chapter 6. Due to a new prohibition on presidential reelection, the 1992

contest had no incumbent. Numerous challengers entered the race, but

unlike previous elections in the months, weeks, and days before the poll

no clear frontrunners ever emerged. The eventual winner, Fidel Ramos,

was victorious with only 23.6 percent of the vote. Only nine percentage

23

The strength of the incumbent will also in¬‚uence the opposition™s incentives to

coordinate on a single candidate.

24

Exactly how low that barrier is will depend in part on whether a clear, designated

successor exists that can inherit many of the advantages of incumbency.

25

See Chapter 4 for a discussion of each the assumptions.

Building Party Systems in Developing Democracies

44

points separated Ramos from the fourth place ¬nisher. Less than two

percentage points separated the second- and third-place candidates.

These ¬nal results re¬‚ected the fact that voters, candidates, party leaders,

and donors all had a dif¬cult time distinguishing the frontrunners from

the also-rans “ a task made much more dif¬cult without the presence of

an incumbent in the race.

In summary, the lack of an incumbent lowers the barriers to entry for

presidential contenders and undermines the incentives of presidents to

invest in party building. The result should be an increase in the number

of viable presidential candidates over elections where incumbents are

present.

To conclude, the probability of capturing the prize of government

in presidential systems depends jointly on the proximity of legislative

and presidential elections and the effective number of presidential

candidates. The more proximate the presidential and legislative con-

tests are, the stronger the aggregation incentives will be. However, as

the effective number of presidential candidates rises, the relationship

between proximity and aggregation weakens. Aggregation incentives

are strongest when presidential and legislative elections are concur-

rent and there are a small number of presidential candidates. The

number of presidential candidates in turn is a function of social het-

erogeneity, the electoral formula, and the presence or lack of an

incumbent.

Parliamentary Systems

In pure parliamentary systems, the executive and legislative elections are

always concurrent, and the vote is always fused. As a result, the prob-

ability of capturing the aggregation payoff rests on the strength of the

prime ministerial selection method. A strong method of selection is one

in which the rules or norms of parliament are such that the leader of the

largest party always has the ¬rst opportunity to form a government. If

this is the case, and the leader usually succeeds, then the system looks like

a plurality election “ the leader of the party with the most support

becomes the head of the government (Cox 1997). If, on the other hand,

actors other than the leader of the largest party often form or get a chance

to form the government, then there are weaker incentives to try to

become the largest party. As a political entrepreneur with an eye on the

premiership, the actor™s willingness to go to the costly effort of

A Theory of Aggregation Incentives 45

attempting to organize a large party will be less if success will not

guarantee the premiership. As a candidate or faction leader, uncertainty

about whether a successful cross-district coordination effort will bring

with it the rewards of government is a strong disincentive. In short,

where there is a low probability that the leader of the largest party will

capture the aggregation payoff, aggregation incentives are weak, and

aggregation should be poor.

To summarize, aggregation incentives are a function of the payoff

to being the largest party at the national level and the probability

that the largest party will receive that payoff. Both are necessary to

produce maximum aggregation incentives. A low probability can

undermine cross-district coordination incentives, even if the potential

payoff is large. Likewise, a guarantee that the largest legislative party

will capture the reins of government will not produce strong aggre-

gation incentives if being in power at the national level is not worth

very much.

2.3 conclusion

In this chapter I have presented a theory of aggregation incentives. A

concentration of power within at the national-level of government may

indeed be an important determinant of aggregation incentives, but I

argue that by itself vertical centralization is not enough to produce

aggregation. Two other variables play key roles. First, the degree of

horizontal centralization “ the degree to which power is concentrated

within the national government “ in¬‚uences the incentives to aggregate

across districts. Horizontal centralization interacts with vertical cen-

tralization to determine the payoff to being the largest legislative party. I

argued that the presence of bicameralism, party factionalism, and reserve

domains increase horizontal decentralization and so decrease the size of

the aggregation payoff.

Second, the probability that the largest party will actually be able to

capture the aggregation payoff also shapes coordination incentives.

Where that probability is low, aggregation incentives will be weaker. In

parliamentary systems, the probability of capturing that prize is a

function of who typically becomes prime minister. In presidential sys-

tems, the effective number of presidential candidates and the proximity

Building Party Systems in Developing Democracies

46

of legislative and presidential candidates shape the probability that the

largest legislative party will also control the presidency.

In the next chapter, I use this theory to derive a series of testable

hypotheses. I then discuss various strategies for operationalizing my

dependent and explanatory variables and test my hypotheses on a large-

N dataset. In Chapters 4“6 I draw on the theory to explain the dynamics

of party system development and aggregation in Thailand and the

Philippines.

3

Testing the Theory

3.1 introduction

In Chapter 2 I developed a theory of aggregation incentives that stressed

the interaction of the size of the aggregation payoff (itself a product of

vertical and horizontal centralization) with the probability of capturing

that prize. In this chapter, I turn to the task of testing some of the theory™s

hypotheses using a dataset of 280 elections in 46 countries. In Chapters 5

and 6, I conduct further tests of the theory using data from Thailand and

the Philippines. The chapter proceeds as follows. In the next section, I

discuss the operationalization and measurement of the dependent vari-

able “ party system aggregation. I then devote a section each examining

the payoff to aggregation, the probability of capturing the payoff

in parliamentary systems, the probability in presidential systems, and

¬nally the effect of social heterogeneity on aggregation. In each of these

sections, I derive a set of hypotheses from the theory outlined in Chapter

2, discuss my strategy for operationalizing the various explanatory

(and control) variables of interest, describe the dataset used to test the

hypotheses, and ¬nally present the results of those tests. The ¬nal section

concludes.

3.2 the dependent variable: aggregation

as in¬‚ation

As discussed in Chapter 1, the national party system is the product of

two types of coordination “ intra-district coordination and aggrega-

tion. Simply using the effective number of electoral parties in legislative

47

Building Party Systems in Developing Democracies

48

elections is insuf¬cient. The effective number of parties contains

information about both the district-level party systems and the extent

of coordination or aggregation across districts. To test the effect of

various factors on aggregation, we need a way to separate the district

and aggregation effects. One way to do this is to calculate the difference

between the effective number of electoral parties nationally (ENPnat)

and the average effective number of parties in each district (ENPavg)

and to use this as a measure of the extent of aggregation from the local

to national party system (see Chhibber and Kollman 1998). The larger

the difference is, the poorer the aggregation.

D ¼ ENPnat À ENPavg °1Þ

Cox uses this difference measure to calculate how much larger the

national party system is than the average district-level party system

in percentage terms. This measure, which he dubs the party system

in¬‚ation measure (I) is computed by dividing the difference between

ENPnat and ENPavg (D) by ENPnat and multiplying by 100 (Cox 1999,

17).1 Larger in¬‚ation scores correspond to poorer aggregation.