Party Politics

http://ppq.sagepub.com Party System Change: Testing a Model of New Party Entry

Margit Tavits Party Politics 2006; 12; 99 DOI: 10.1177/1354068806059346 The online version of this article can be found at: http://ppq.sagepub.com/cgi/content/abstract/12/1/99

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PA RT Y P O L I T I C S Copyright 2006 SAGE Publications www.sagepublications.com

V O L 1 2 . N o . 1 pp. 99119 London Thousand Oaks New Delhi

PARTY SYSTEM CHANGE

Testing a Model of New Party Entry Margit Tavits
ABSTRACT

I argue that the costs of entry, benets of ofce and the probability of receiving electoral support, i.e. the strategic entry calculation by new party elites, determine new party emergence. The model is tested using pooled time-series cross-sectional data from 22 OECD countries for elections held between 1960 and 2002. The results show that new parties are more frequent when the institutional structures are permissive (the cost of entry is low), the corporatist arrangements are weak or non-existent (the benet of entry is high) and the electoral histories of the incumbents are short (the probability of attracting votes is high). The last two factors interact in their relationship with the number of new parties, as presumed by the theory.

KEY WORDS corporatism new party emergence party system development strategic entry

Introduction
Why do new parties emerge even in well-established party systems? Revealing the conditions for new party emergence is a key to understanding party system change and stability in general. Although most of the new parties that emerge in established democracies are small, some are not. Even if a new party poses no threat of replacing an established one, its presence will have an impact on electoral competition by driving votes away from existing parties, thus destabilizing the electoral arena. Furthermore, discovering what determines new party emergence in stable systems may give important hints to new democracies that still face the challenge of stabilizing their party systems and establishing long-term patterns of representation. Several scholars have been fascinated by the question of new party emergence, but a parsimonious empirical model explaining this phenomenon is still lacking. The existing studies have largely focused on correlations
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between the count of new parties and a wide variety of institutional and societal explanatory variables. Although some ndings have appeared more consistent than others, we still do not have a clear understanding of what factors inuence new party emergence and how these factors are related; in short, we lack a coherent theoretical argument. This article adopts the theory of strategic entry developed by Cox (1997) as the basis for the explanation of the emergence of new parties. According to this theory, party emergence results from the elite-level decision to enter the electoral arena as a new contestant. This decision is conditioned by the costs of entry, benets of ofce and the probability of receiving electoral support. Following this argument, I derive a set of observable indicators for each of these conditions. In the course of doing so, I discuss the relevance of the variables used to explain new party emergence in previous studies. While my model accommodates some of those variables, it disregards others and comes up with important additions. That is, previous studies have either ignored the benet of forming a new party or failed to provide good empirical indicators to capture this condition of new party emergence. The current study uses the mode of interest group representation pluralism versus corporatism in order to capture the potential benets. The model of strategic entry is tested using pooled time-series crosssectional data from 22 OECD countries for all elections held between 1960 and 2002. The results show that new parties are more frequent when the institutional structures are permissive (i.e. the cost of entry is low), the corporatist arrangements are weak or non-existent (i.e. the benet of entry is high) and the electoral histories of the incumbents are short (i.e. the probability of attracting votes is high). Furthermore, the benet of entry and the probability of attracting votes interact in their relationship with the number of new parties.

What Do We Know About New Party Emergence?

The existing literature on the emergence and initial success of new parties includes studies about specic types of parties such as left-libertarian (Kitschelt, 1988; Mller-Rommel, 1993), new right-wing (Harmel and Svsand, 1997; Ignazi, 1992; Kitschelt, 1998), or regional and nonstate-wide parties (De Winter and Trsan, 1998). Other scholars have taken a more generic approach and tried to explain the emergence and the electoral success of any kind of new party within one country (Rosenstone et al., 1984) or in comparative context (Andrews and Money, 2003; Harmel and Robertson, 1985; Hauss and Rayside, 1978; Hug, 2001). Hug (2001) has performed the most comprehensive study on new parties that pulls together most of the arguments presented in works published earlier. Thus, rather than reviewing the individual studies, I will mostly concentrate on this study and its ndings. 100

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Hug argues that there is a common underlying logic to new party formation, regardless of the type of party. He formulates the emergence of a new party as a potential outcome of a game between the existing parties and groups that consider forming a new party. The game takes place in the structured environment of a political system. The implications drawn from the game-theoretic formulation of his argument translate into an empirical model that covers different sets of explanatory variables. These variables can be grouped under the following topics: new issues, formation costs, benets of high demand and cost of electoral ght/benets of a weak challenger. Under such group labels Hug is able to test almost all arguments about new party emergence present in the existing literature. However, the theoretical expectations related to every specic variable are not always fully elaborated criticism applicable to earlier studies as well. Thus, the choice of some variables remains rather ad hoc. For example, as an indicator of new issues, Hug, following Harmel and Robertson (1985), includes the size of the population. The argument for doing so is presented in one sentence: in large countries it is more likely that different population groups seek representation through specic political parties (Hug, 2001: 93). It is not at all clear why this would be more likely in large countries: why would different groups in small countries not seek representation through parties? The net size of groups in large countries is larger than the net size of similar groups in small countries, but proportionally these groups may both be of a size suitable for seeking political representation. Similarly, the argument for including measures of homogeneity of society is that countries that are homogeneous [. . .] give rise to fewer new issues (Hug, 2001: 95). Yet we know that ethnic minority groups can be politically better organized than the majority of the population. Political stakes in heterogeneous societies may be higher and political conict more tense. This may reinforce stronger party loyalty from voters. Thus, once different groups in a heterogeneous society have established their political representation, they may be less likely than an electorate in a homogeneous environment to change its vote choice (Bartolini and Mair, 1990; Lipset and Rokkan, 1967; Ordeshook and Shvetsova, 1994). Hence, while ethnic, linguistic, racial and other types of heterogeneity may increase the effective number of parties, it is not at all clear that the same societal conditions inuence the number of new entrants to the electoral arena. Consequently, Hug nds only partial support for some of the arguments presented in previous literature and none for others. In his nal model, which includes all 21 variables hypothesized to be related to the emergence of new parties, only the following appear signicant: linguistic homogeneity, growth rate, population (a measure of new issues), petition signatures (a measure of formation costs) and thresholds of representation and exclusion (measures of the cost of electoral contestation). Even these relationships detected remain dubious as Hug himself admits. Hugs study is very important in pooling together existing arguments about new party formation. The 101

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results show the weakness of some of the existing arguments and point to the need to refresh the study of new party emergence by trying to pin down an empirically reliable and parsimonious model.

Strategic Entry
The emergence of a new party results from the strategic calculations of the elites about whether or not to enter the electoral arena (Cox, 1997). This calculus follows essentially a simple logic. Assuming instrumentally rational elites who care about winning either for the sake of inuencing policy or for the spoils of ofce, or both, they need to maximize their vote share. In any given election, a party may either enter the political contest and pay the cost of entry or it may decide not to enter, in which case no costs will be borne but no payoffs will be received. If, however, the party enters the contest, its payoff equals the benet of holding ofce (b), times the probability of getting elected (p), minus the cost of entry (c). Thus, in equilibrium, no party will enter unless bp c. Let me discuss every term in turn. The Cost of Entry In empirical studies, the cost of entry has been captured by institutional variables. These include the specic rules of registering a party and the electoral rules that determine the ease of winning a seat. The former include the monetary cost of registering a party, the number of signatures necessary to form a party and the availability of public funding for parties (Hug, 2001). The higher the deposit and number of signatures necessary the more resources the party needs in order to enter. The availability of public funding for parties can potentially lower the direct costs of entry. However, one has to bear in mind that most systems cover a share of party costs only if these parties have received a certain threshold of votes. Thus, the effect of the availability of public funding on entry decisions may be less automatic. Its effect essentially depends on the probability of receiving electoral support. Furthermore, systems that convert votes to seats disproportionately impose higher costs of entry. The Probability of Electoral Support The second component of the model the probability of electoral support refers to the elite estimation of whether or not they are likely to suffer electoral defeat (Cox, 1997). As this probability has to be calculated before entry, it presupposes that it will be clear at the time of entry which parties will be non-viable on the election day. Thus, if the elite of a potential new party believes that their party will not be viable and this belief is shared by other party elites, it will not enter the electoral arena. Of course, it is 102

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challenging to develop such consistent beliefs before any information about possible electoral performance is available. One possibility would be to infer the probability of electoral success from the previous electoral performance of existing parties. The more crystallized the support base for the existing parties, the more difcult it is for new entrants to attract votes. This also explains, to a large extent, why the emergence of new parties in established democracies is relatively low, while in new democracies new parties continue to enter at higher rates (Golder, 2003; Tavits, 2004). A coordinated equilibrium on the electoral arena emerges over time. Thus, an indicator of the probability of attracting votes could be the age of democracy. For advanced democracies, World War II could act as a cut off point as it constitutes a large exogenous shock potentially destabilizing the party system. Golder (2003) has argued that if there is an exogenous shock, coordination between elites and voters starts again. He further states that all but three new entrants in advanced democracies that received at least 15 percent of the vote had formed immediately after World War II. Furthermore, for some West European countries, the end of World War II also meant regime change that makes symmetry in terms of probability of getting elected more likely (Cox, 1997; Tavits, 2004).1 Previous research has not used the terminology the probability of getting elected. However, the same electability concerns have been discussed in the context of the emergence of new issues. That is, if the societal conditions are such that the probability of new issues emerging is high, then new parties should be more frequent. Specic variables to capture the importance of new issues have included the size of the country, heterogeneity of society, income inequality, high levels of post-materialism (Harmel and Robertson, 1985; Hug, 2001) and economic performance (Eagles and Ere, 1993; Hug, 2001; Rosenstone et al., 1984). The empirical results of these variables have been mixed, however. First, Hug, as do Harmel and Robertson (1985), fails to nd a signicant relationship between post-material values and the emergence of new parties. In Hugs nal model, where all independent variables potentially related to the emergence of new parties are included, linguistic homogeneity (the only homogeneity measure out of ve included) and growth rate have signicant negative effects, while population size has a signicant positive effect on new party emergence. As mentioned above, these relationships are not very easy to interpret substantively. The effect of economic performance is more difcult to disregard, as there is considerable evidence of economic voting in advanced democracies (Lewis-Beck and Stegmaier, 2000). However, Lancaster and Lewis-Beck (1986) have shown that voters may remain constrained by their commitments or identication with the existing parties due to symbolic reasons and do not necessarily pursue economic self-interest in their vote choice even if the existing parties have not been able to deliver desired economic results. Moreover, even if incumbents are punished for poor performance, it does not necessarily mean that new parties will prot, as voters may also vote 103

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for existing opposition parties in order to punish the incumbent. This argument directly reects the discussion above about the existence of a coordinated equilibrium: the more crystallized the existing party system the smaller the probability that new parties will receive electoral support. However, given the strong theoretical arguments and empirical proof of the arguments relating economic performance to electoral outcomes, I control for it in the empirical model estimated below. Benets of Holding Ofce The third component of the model refers to the benets of ofce. In the spatial models that Cox (1997) bases much of his discussion about strategic entry on, benet is assumed to be the same for all entrants to the political arena. Hug (2001) has attempted to capture two types of benet: (1) the electoral benets of forming a party, the measures for which capture the disproportionality of the electoral system and, thus, mirror the measures for the cost of entry; and (2) the benets of high demands measured by majoritarian government, number of parties in government, government change, the degree of centralization and the presence of the provisions of referendums. However, the relationships of these variables to the emergence of new parties are not always clear (and not well explained). Furthermore, none of the indicators used to measure benets of ofce appear consistently signicant in Hugs analysis (2001: 107, 118). Given these non-results, should we simply assume that the benet of ofce is constant across systems, or should we try to nd better measures to capture this component? I would argue for the latter. First, it is useful to clarify the meaning of the benet from ofce. Politicians are generally assumed to be instrumentally rational and driven by electoral incentives that are associated with monetary reward and prestige. Given this universal individual level assumption, there is, indeed, little reason to believe that this incentive varies across time and space. However, in addition to the electoral incentive, politicians may also care about inuencing policy. Here the following question becomes important: does having a political ofce offer better access to inuencing policy than not having a political ofce? Given that prestige and monetary reward from holding a political ofce is present in all systems, the remaining variance in benet calculation, thus, has to come from the different degree of policy change allowed only via the electoral channels. It is common knowledge that advanced democracies differ to a large extent in how conict resolution in society between different groups and, consequently, the policy formation process, has been arranged. These arrangements do not necessarily have anything to do with institutional design. The voluminous literature on corporatism and pluralism in advanced democracies has documented that certain countries at certain times exhibit more consensual and integrating decision-making processes 104

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than other countries or the same countries at other times. Corporatism is generally understood as:
any form of cooperation between the government and the relevant socio-economic interest groups of employers associations and trade unions, aimed at forging consensus over the formulation and implementation of socio-economic government policies. (Woldendorp, 1997: 4950)

Attempts have been made to relate corporatism and the emergence of new politics or new social movements, arguing that due to the prevailing mode of consensus under corporatist arrangements, countries that are corporatist have more new social movements and new parties with a left-libertarian bent because the rigidity of these systems does not allow them to adapt to handle new issues (Kitschelt, 1990). Yet, no empirical support for these arguments has been found (Kitschelt, 1990; Todosijevic and Enyedi, 2003; Wilson, 1990) and the nature of the possible relationship has not been explored further. It is, however, possible that the relationship is present but runs in the opposite direction. That is, under corporatism, bargaining takes place between autonomous interest organizations as well as with government. According to Lembruch (1979a), this creates a condition under which power to make and implement policies is largely transferred from parliament and government to these semi-private interest organizations. Lembruch (1979b) further argues that corporatist policy-making has spillover effects to domains outside economic policy, and interest organizations are included in all legislative projects. The central idea of corporate arrangement is that the specic targets of government intervention are directly and permanently represented (Jessop, 1979), creating a situation where electoral channels of representation have diminished in importance (Williamson, 1989). Given the broad-based decision-making coalition that does not change as a result of electoral politics and participates in making and implementing major or even most policies, the benet from entering the electoral arena with the hope of exercising any policy inuence is low. Thus, one would expect fewer new entries when corporatist arrangements prevail. The opposite of corporatism is pluralism which lacks this institutionalized cooperative decision-making between interest organizations and government (Siaroff, 1999). Under pluralism, parliament and the government remain the main arenas for conict resolution between different interests. Thus, the political system maintains its competitiveness, and entering the political arena may have the real consequence of signicantly inuencing policy in ones favoured direction. Pluralism, thus, should encourage the emergence of new parties by way of increasing the potential benets from entry. In sum, I have argued that the emergence of new parties is a function of the cost of entry to the electoral arena, the probability of getting electoral support and the benet of holding political ofce. Notice also that according to this theoretical argument, in which the entry calculation is specied 105

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as pb-c, there is an interaction effect between the variables capturing the probability of getting elected and the benets of ofce. We would expect that the benets of ofce become more signicant in entry calculations if probability of getting elected is small. If the probability of getting elected is high, then benets of ofce (conceptualized as the possibility to inuence policy) should become secondary in entry calculations, because certain benets will almost always follow from a political ofce. Similarly, one would expect that the probability of getting elected is less signicant in entry calculations when benets from ofce are extremely high and it is very attractive to enter. At the same time, when benets are not so high, the probability of getting elected takes precedence and it should appear as a signicant predictor of the number of new parties. The analysis is performed using both an additive and an interactive model.

Data and Measures

In order to test the theoretical argument developed above, I use a dataset that comprises all national legislative2 elections of 22 OECD democracies within the period 1960 to 2002.3 The dependent variable is measured, following previous studies, by the count of new parties, i.e. parties that are rst time on the ballot in any given election (Harmel and Robertson, 1985; Hug, 2001).4 A new party is one that either results from a split from an existing party or is genuinely new in the sense that it emerges without any help from members of existing parties (Hug, 2001: 7980). Mergers and electoral alliances are excluded from the analysis, as these are, in essence, not new parties (Hug, 2001). Table 1 lists the number of new parties by country and by election. The total number of new parties is 358 for the time period specied. On average, 1.4 parties emerged in any given election. In 69 elections, no new party emerged. The two elections that saw the emergence of the maximum number of new parties were the 1979 election in the UK and the 1986 election in Spain both elections had 11 new contestants. The general country trends in the emergence of new parties are, with a few exceptions, declining over the period under study. However, the within-country variances are also rather high. The independent variables capturing the cost of entry include three indicators of formation cost: the amount of deposit for registering a party (registration cost) as a proportion of current GNP per capita, the number of signatures required to have access to the ballot (petition) per 1000 eligible voters5 and public party nancing measured by a dummy variable if public funds were available for covering a share of the campaign expenditure (Hug, 2001).6 An additional institutional variable disproportionality is measured by the mean district magnitude (Beck et al., 2001). The probability of getting electoral support is captured mainly by the 106

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Table 1. Number of new parties per election per country

Number of new parties Election Country Australia Austria Belgium Canada Denmark Finland France Germany Greece Iceland Ireland Italy Luxemburg Netherlands New Zealand Norway Portugal Spain Sweden Switzerland UK USA 0 1 0 0 1 1 1 2 5 0 1 0 1 0 0 1 4 5 0 0 1 3 0 3 4 0 0 0 2 1 2 2 0 1 0 2 0 0 2 4 1 2 0 3 2 0 1 0 0 1 0 1 2 1 0 1 1 1 1 0 0 4 0 4 9 1 2 2 2 3 3 1 0 1 1 2 3 2 4 2 1 4 1 4 1 1 0 1 3 0 6 0 0 1 1 11 10 1 1 1 0 4 2 1 2 6 0 5 2 4 1 1 3 1 2 0 2 4 0 0 3 3 3 2 0 0 3 1 0 2 11 7 1 2 1 2 0 2 2 3 1 2 2 5 0 0 0 0 0 0 1 2 3 5 1 0 1 2 1 2 0 3 1 4 0 1 0 2 1 3 1 1 1 4 2 0 0 0 4 1 0 0 1 0 4 2 1 1 2 5 1 0 0 1 0 0 1 0 0 1 0 2 1 3 1 0 2 0 0 0 0 1 0 0 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

1 0 1 0 0 0

3 1 1 0 0 0

1 1 0 0 0 0 0 4

2 2 2

0 0 0 2

0 0 1

Columns are organized by election number, i.e. column number 1 gives the number of new parties in each country for the rst election after 1959, etc. Source: Hug (2001), www.parties-and-elections.de, http://www.aec.gov.au/_content/when/ past/index.htm, http://www.elections.ca, http://elections.catalyst.net.nz/elections/pandr/ vote/index.html, http://www.uselectionatlas.org/USPRESIDENT/

duration of democracy that measures the number of elections since World War II. In addition, two measures of economic performance (GDP growth and change in unemployment rate) frequently used in the literature on economic voting, and also in previous studies on the emergence of new parties, are included as controls.7 Benet from holding a political ofce is captured by the index of economic integration constructed by Siaroff, who has dened integration as:
a long-term co-operative pattern of shared economic management involving the social partners and existing at various levels such as plantlevel management, sectoral wage bargaining, and joint shaping of national policies in competitiveness-related matters (education, social policy, etc.). (Siaroff, 1999: 189)

107

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This concept ts very well with the theoretical argument developed above, that corporatist arrangements, or, more specically, the lack thereof, function as benets from ofce in the entry calculations of new parties. Furthermore, the integration scores are provided for four different decades (1960s through 1990s). This allows testing the argument about the effect of benets from ofce on the emergence of new parties not only across countries but also across time.8 Last, I also control for the two variables that have been found signicant predictors in previous studies population9 and ethnic fragmentation.10 Table 2 provides the descriptive statistics for all variables.

Analysis
The dependent variable is a count and almost by denition not normally distributed. As the variance of the dependent variable (3.324) is more than twice the mean (1.44), a negative binomial distribution is more likely than a Poisson. In addition, the analysis of pooled time-series cross-sectional data entails the possibility both of heteroskedasticity and autocorrelation (Stimson, 1985). In order to perform residual tests to check whether either threat is serious, I saved standardized residuals from simple OLS estimates.11 In general, the residuals display no abnormal pattern. More specically, no signicant serial correlation could be detected from observing residual plots. Neither was there a relationship between the residual and its lag, either when using a bivariate correlation or when regressing all independent variables in the model plus the lagged residuals on the residuals. Both of these tests suggest that serial correlation is not a signicant problem. However, I have included the rst lag of the dependent variable as an explanatory variable to take care of any potential serial correlation not captured by the above tests (Sayrs, 1989). As for heteroskedasticity, the residual plots (Berry and Feldman, 1985) did not show any signicant relation between the error term and country observations. Furthermore, I also performed cross-validation to test whether all countries were well modelled by the regular negative binomial regression. This was done by leaving out of the analysis one country at a time and then predicting the dependent variable for that country. The accuracy of the predictions varied very little across countries. Thus, there seems to be no serious concern with heteroskedasticity, which is good news, as the usual way of dealing with heteroskedasticity in time-series crosssectional data using a xed effect model would be problematic in the current context because the model that needs to be estimated contains variables that do not vary within countries and the parameter estimation in such cases would be precluded. Thus, I have refrained from estimating a xed effects model but used Huber/White robust standard errors within the country clusters to deal with potential heteroskedasticity. 108

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Table 2. Descriptive statistics Variable Number of new parties Registration cost Petition Party nancing Mean district magnitude Duration of democracy GDP growth Unemployment Corporatism Integration Log population Ethnic fragmentation N 250 255 254 255 255 255 241 237 255 251 255 255 Mean 1.440 0.029 1.488 0.529 14.222 10.862 2.468 0.629 2.661 3.192 9.2 0.77 Std. Dev. Min 1.823 0.102 2.099 0.5 30.866 4.387 2.449 2.884 1.258 1.094 1.495 0.208 0 0 0.693 0 1 2 14.31 9.9 1 1.625 5.204 0.23 Max 11 0.77 7.38 1 150 23 10.82 14.99 5 4.75 12.57 0.96

Table 3 reports the results from the negative binomial regressions of both the additive (Model 1) and the interactive (Model 2) models. In addition to coefcients I have also reported incident rate ratios and standardized percent change in the expected counts of new parties for signicant variables in Model 1. The latter is given to facilitate comparison of the strength of the relationship of different independent variables. The Wald statistic for the model is high and several variables appear statistically signicant. The likelihood ratio test that i = 0 provides for Model 1 2(1) = 33.3, p > 0.000 and for Model 2 2(1) = 32.48, p > 0.000. Thus, clearly the data are not Poisson distributed and negative binomial estimation is optimal. The results offer considerable support for the strategic entry argument developed in this study most of the variables capturing the cost of entry, the through-time dynamics of the viability and the benets of ofce appear signicant. Considering Model 1, the most direct institutional constraint the cost of registering a party is signicantly and negatively related to new party emergence, as hypothesized. A one-unit increase in registration cost is associated with a 50 percent decrease in the expected count of new parties. This is a considerable effect and indicates that formal requirements of party registration may signicantly discourage the emergence of new parties and help to keep existing party systems stable. The signicance of this variable is reduced in Model 2, when the interaction term is introduced, but the relationship still remains negative. The effect of the availability of public funding for new parties is not signicant in either model. Thus, restricting the availability of public funding may not necessarily act as a substantively signicant cost of entry for new parties, and the absence of public funding may not automatically discourage new entrants. This nding is expected given that, as explained above, in most systems the nancial aid is not automatic but depends on 109

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Table 3. Negative binomial regressions of the emergence of new parties Model 1 Incidence rate ratio 0.493 1.106 Standardized % change in expected counts 7.3 23.2 Model 2

Variable Registration cost Petition (logged) Party nancing Mean district magnitude Duration of democracy Integration Duration of democracy* integration GDP growth Unemployment Lag count of new parties Population (logged) Ethnic fragmentation Constant Wald Alpha N

(SE)
0.705* (0.325) 0.100* (0.046) 0.067 (0.172) 0.003** (0.001) 0.048** (0.020) 0.203* (0.099)

(SE)
0.519 (0.375) 0.113** (0.046) 0.020 (0.153) 0.003** (0.001) 0.063 (0.068) 0.135 (0.198) 0.036 (0.019) 0.006 (0.035) 0.018 (0.033) 0.079* (0.038) 0.157 (0.080) 0.141 (0.328) 1.262 (1.171) 139** 0.438 (0.186) 218

1.003 0.952 0.815

11.1 17.4 20.3

0.021 (0.029) 0.018 (0.033) 0.077* (0.038) 0.150 (0.080) 0.267 (0.308) 0.069 (1.099) 145** 0.451 (0.186) 218

Standard errors adjusted for clustering on country. *p 0.05, **p 0.01, two-tailed.

electoral performance. Thus, the potential new contestants can put more faith in nancial aid provision if they believe that the probability of electoral support is high, otherwise availability of public funding should function as less of an incentive. Something rather unexpected happens to the third cost indicator petition. It reaches the level of statistical signicance, but has a positive sign. Thus, an increase in the number of signatures required for party registration 110

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is associated with an increase in the predicted count of new parties. As the variable is logged, it is difcult to provide any more precise interpretation of the incident rate ratio, but the standardized percent change in expected number of new parties suggests that, in comparison to other variables in the model, the effect of petition on the number of new parties is the strongest. Such an empirical nding is not new, though. As mentioned above, Hug (2001) also nds that petition is positively related to the number of new parties. However, the result is rather counter-intuitive, with no explanation provided. A possible explanation for such a positive relationship between the emergence of new parties and the petition requirement is that the signature requirement may create a false sense of security for the new party elites about their perception of viability. That is, if the number of required signatures for party registration is high, parties that have assembled these signatures are likely to enter the electoral arena, because they may perceive that this large number of signatures guarantees them a large support base. If there is no signature requirement, potential new party elites lack such a strong and immediate cue for assessing their viability and that may discourage their entry. To an extent then, the petition requirement does not function that much as a cost of entry, but as a tool for predicting electoral viability, and thus a measure of p (the probability of getting elected). Of course, this explanation remains only speculative here and requires further analysis in subsequent studies. This is the end of surprising ndings. The rest of the results follow the theoretical predictions almost perfectly. The cost of entry in terms of institutional obstacles the mean district magnitude is positively and signicantly related to the predicted number of new parties as expected. The increase in the mean district magnitude by 1 is associated with a 0.3 percent increase in the number of new parties in both models. Considering that the value of this variable ranges from 1 to 150, this amounts to a considerable effect. Indeed, in standardized terms (the third column under both models), the effect of mean district magnitude on the number of new parties is greater than the effect of registration cost. The nding conrms that the permissiveness of an electoral system lowers the cost of entry for new parties, as a smaller proportion of votes is necessary in order to win a seat. In Model 1, the indicator expected to capture the probability of getting elected the duration of democracy is signicantly and negatively related to the number of new parties. The longer that democracy has endured, the fewer new parties emerge, rejecting the argument that aging party systems encourage new entries: a yearly increase in the duration of democracy is associated with about a 5 percent decrease in the predicted count of new parties. Integration also performs in the expected manner in the additive model the variable is negatively and signicantly related to the number of new parties. A one-unit decrease in the corporatism score is associated with an 18 percent decrease in the expected counts of new parties.12 In total, moving from the least corporatist system to the most corporatist one is 111

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associated with an approximately 90 percent decrease in the number of new parties. This is substantively a very signicant effect. And, indeed, looking at the standardized percent change in expected counts, the variable measuring corporatism has the second strongest effect on the emergence of new parties in both models. This indicates that existing models of the emergence of new parties are missing a substantively very important factor and have remained signicantly under-specied. Model 2 complements these ndings by exploring the interaction effect between integration and the duration of democracy. The impact of the interaction effect cannot be interpreted from the table directly. Thus, I have calculated the full range of conditional coefcients and standard errors for both the duration of democracy and integration. These are graphically presented in Figures 1 and 2. The line of triangles in Figure 1 represents the conditional coefcient of the duration of democracy at different levels of integration, while a similar line in Figure 2 represents the conditional coefcient of integration at different levels of the duration of democracy. The 95 percent condence intervals on both gures (the lines of circles and squares) help to determine whether those conditional coefcients are statistically signicant. As usual, the coefcient is signicant if both the upper and lower condence intervals are on the same side of the zero line. Let me repeat that high values of duration of democracy mean a low probability of getting elected and high values of integration mean low benets from ofce. Figure 1, then, tells us that the effect of the duration of democracy on the number of new parties becomes signicant at higher values of integration. Indeed, the cutoff line on the x-axis indicates that the duration of democracy is negatively and signicantly associated with the number of new parties at all values of integration higher than 2.875. This interpretation corresponds very well with the theoretical expectation: when the benets from ofce are low (i.e. the value of integration is high) the probability of getting elected (duration of democracy) has a signicant effect on the number of new parties. At the same time its effect is not signicant (i.e. low probability of getting elected does not discourage entries) if the benets from ofce are high (i.e. the value of integration is low). Similarly, Figure 2 indicates that the effect of integration on the number of new parties becomes signicant at higher levels of the duration of democracy. The cutoff line on the x-axis in Figure 2 shows that the effect of integration becomes signicant when democracy has endured for at least nine democratic elections since World War II. Again the results of the empirical test correspond to the theoretical expectation: when the probability of getting elected is high (i.e. duration of democracy is low), the benets from ofce are insignicant in the entry calculations of new party elites. However, when the probability of getting elected decreases (i.e. duration of democracy increases), the benets from ofce factor signicantly in the entry calculations of new party elites. In addition to theory-conrming relationships, all control variables in the 112

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Figure 1. Effect of the duration of democracy on the number of new parties conditional on the level of integration

Figure 2. Effect of integration on the number of new parties conditional on the level of the duration of democracy

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models appear insignicant. First, the explanation of the emergence of new parties based on economic performance is not supported by the analysis. In the context of my theoretical argument, this nding presupposes that economic indicators are not good measures of the probability of getting elected, i.e. they are not necessarily important in the elite calculations of the probability of electoral support. Both the size of the population and the level of ethnic fragmentation are also not signicant. Indeed, I argued above that so far there is no compelling theoretical argument in the literature for why either should determine the number of new parties. This empirical nonnding further suggests that these variables might have acted as proxies for some other theoretically relevant variables, which may have caused their statistical signicance in previous studies. For example, it is well accepted that country size is highly correlated with its corporatism score (Katzenstein, 1985).

Conclusions
The ndings in this article show that the emergence of new parties is associated with the cost of registering a party, the availability of public funding, the permissiveness of the electoral institutions (i.e. costs of entry), the level of corporatism (the benets from electoral ofce), the duration of democracy and the number of signatures required for party formation petition (the probability of electoral support). Furthermore, the analysis supports the argument about the interactive inuence of the benets from ofce and the probability of getting elected on the entry calculations. Thus, the study provides general support for the theory of strategic entry. The importance of this study is twofold. First, it offers a parsimonious empirical model for explaining new party emergence that ts a coherent theoretical argument. This model could be improved by further investigating other interactive relationships between the explanatory variables, and the relationship of the pb term to the dependent variable. Indeed, several conditional effects between costs and benets as well as the probability of getting electoral support could be derived from the existing theory of strategic entry. A careful empirical modelling of these effects could lead to even better insights into what determines party system instability. The second contribution of this study has been substantive I have argued that the variations in patterns of interest intermediation are useful indicators of the extent to which policy-making can be inuenced via extraelectoral channels, thus determining the potential benets of forming another party and trying to inuence policy through electoral channels. The empirical results of this study, indeed, show that when such extra-electoral channels are used, i.e. under corporatist systems, the probability of new contestants entering the electoral arena is lower than in systems in which mostly electoral channels are used. Furthermore, while benet from ofce 114

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is a theoretically well-recognized factor inuencing entry calculations, this variable has either been absent from the empirical studies of new political parties or no good indicators for capturing benets have been found. While the spoils of ofce may, indeed, be constant across elections and across different political systems, the stakes of political bargaining can vary considerably. The consensus orientation of the arrangements for conict resolution and policy-making that prevails under corporatism considerably lowers these stakes and, consequently, decreases the potential benets from running for political ofce. Thus, not only does this nding add an important substantive explanation of new party emergence to the literature of party system change, it also provides an important missing link for empirically testing the argument about strategic entry. The implications of this study provide important lessons for stabilizing party systems a relevant concern especially in young democracies. Some of these lessons are already well known for instance, electoral rules can help keep the number of new entrants to the minimum. Moreover, democratic maturation will have the effect of crystallizing party support, decreasing electoral volatility and discouraging new entrants. This is good news for new democracies and indicates that democratic stabilization really is a process, not an automatic condition differentiating democracies of the west from those of Latin America and Eastern Europe. A further implication concerns the relationship between corporatism and new parties. This nding clearly suggests that party system stability can be induced not just by formal institutional engineering, but also by establishing a consensual ethos which fosters the mutual accommodation of interests in the policy-making process. This is an important lesson for young democracies, where party replacements and electoral turnover often rise from an inability to cooperate within parliament or even government. Creating a consensual decision-making process between more or less stable parties would in this situation both help to stabilize the electoral arena and get important policies formulated and implemented. Furthermore, the interaction effect between corporatism and democratic maturation on the number of new parties indicates that one should not rely on the automatic direct effect of either. That is, democratic maturation in itself may not discourage new entrants if accommodative structures of interest representation are not created. This indicates that the active role of the engineers of democracy is as important as the historical effect of democratic maturation for providing stable party systems. Of course, while results based on established democracies can provide important insights and lessons for young democracies, these relationships need further testing in less established systems. Also, in order to improve our understanding about party system stability and change in the context of any democracy, a logical next step would be to disaggregate the study of new parties so that party-specic factors, such as ideological location, could be taken into account. These theories could then be fruitfully matched with 115

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current knowledge about individual level vote choice and support for new contestants.

Notes
I thank Taavi Annus and Allan Sikk for their comments and Simon Hug for generously providing his data. 1 It is also possible that aging party systems alienate voters as a result of lack of innovation, which, in turn, should encourage new entries. Testing the effect of time would reveal the empirical validity of either claim. 2 The only exception here is the United States, for which the dataset contains presidential elections. Excluding the United States from the sample, does not alter the results. Other countries included are: Austria, Australia, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxemburg, The Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom. 3 The data for Germany contain information only about West Germany and, thus, no data are recorded after 1990. For Greece, Portugal and Spain the data begin with their second democratic elections in the 1970s. 4 Collecting information on new parties involves a non-trivial degree of difculty. Attempting to identify all new parties ever formed in advanced democracies is an almost impossible task. Often even ofcial accounts fail to provide information on exact election results for all parties; those of smaller parties, including possibly many new ones, are frequently lumped together under the category others. In all cases when new parties could accurately be identied, they were included in the dataset regardless of their electoral returns. For the elections until 1990, I use Hugs (2001) dataset (Hug provides the details of his data collection on p. 172); the sources for the rest of the data are listed under Table 1. In the case of any doubt, party websites were also cross-checked for the registration date of a given party. No reliable information on the number of new parties was available for the 1993 elections in Australia and Canada, and for the 1993 and 1996 elections in New Zealand. For Italy, the 1994 election was excluded owing to the great changes to the electoral system and party system from the 1992 to 1994 elections and it is almost impossible to determine the number of new parties adequately (see Bartolini and DAlimonte, 1996). 5 The values of this variable range from 0 to 501; thus, I have used a log transformation of Petition +0.5 in the analysis. 6 I relied on Hug (2001) for information on party registration requirements and nancing for elections until 1990. The websites of the election commissions (or the equivalent), when available, and the International Institute for Democracy and Electoral Assistance (www.idea.int) were consulted in order to verify the accuracy of the information in Hugs dataset for the latest elections. The information on GNP per capita was obtained from the Global Development Network Growth data (www.worldbank.org/research/growth/GDNdata.htm) and for the size of the electorate from www.idea.int 7 The data for the two indicators are coded from the International Monetary Fund, International Financial Statistics, available at http://ifs.apdi.net/imf/logon.aspx

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8 Siaroff (1999) also provides time-invariant summary scores of corporatism based on 23 previous classications. The results of the analysis change marginally when using this alternative measure. 9 Population measured in thousands. Because of high skewness, I have used a log transformation of this variable in the statistical analyses. Information on the size of the population was obtained from World Bank, World Development Indicators, available at http://devdata.worldbank.org/data-query/ 10 This variable is measured by a HerndahlHirschmann index of concentration for ethnicity Hpi2, where pi is the share of the ith ethnic group in the total population. The relevant ethnic groups were identied from the Central Intelligence Agency, The World Fact Book, available at http://www.cia.gov/cia/ publications/factbook/ 11 For this estimation, I resorted to a common transformation by taking the natural log of the count plus one half. Such a transformation generates a variable that is distributed approximately normally. I used OLS estimation for saving the standardized residuals because no equivalent residuals are available for count data. 12 The effect is even stronger if the time-invariant corporatism measure is used.

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MARGIT TAVITS is an Assistant Professor of Political Science at the University of MissouriColumbia, and a Post-Doctoral Prize Research Fellow at Nufeld College, University Oxford. Her current research focuses on the development of party systems. She has previously published on related topics in Comparative Political Studies and the American Journal of Political Science. ADDRESS: 113 Professional Building, Columbia, MO 65211, USA. [email: tavitsm@missouri.edu] Paper submitted 30 September 2004; accepted for publication 23 January 2005.

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