Bicameralism and Policy Performance: The Effects of Cameral Structure in Comparative Perspective

ADRIAN VATTER

This article addresses the relationship between cameral structure and policy performance in the member states of the OECD for the time period from 1971 to 1996. The empirical analysis shows that bicameral structures act as a signicant brake on government intervention and on the expansion of the welfare state. Furthermore, bicameralism is a powerful veto player to block reforms in economic and nancial policy. With the exception of the over-representation of small and sparsely populated areas, none of the advantages that classical political theory ascribes to second chambers has actually been conrmed. Bicameral structures pose no barrier to executive dominance, nor do they promote stability within political systems or improve the quality of democracy or economic performance. On the contrary, with regard to social representation, they have a strong negative effect: in comparison to systems with a single chamber, bicameralism signicantly reduces womens electoral success.

Parliament is the centrepiece of modern constitutional states and its design still belongs to the elementary decisions of constitutional reformers.1 One of the foremost institutional considerations is the question of whether a national parliament should have one or two chambers. The controversy over the spirit and purpose of a second parliamentary chamber is not new at all; it is one of the classic debates in the history of political theory. Scholars like Charles-Louis de Montesquieu, Alexis de Tocqueville, and the fathers of the American Constitution, especially Thomas Jefferson, were fervent supporters of a bicameral legislature, while representation theorists such as John ` Stuart Mill and Abbe Sieyes expressed considerable scepticism with regard to their usefulness.2 One only has to take a look at the new democracies in Eastern Europe to see that even today no uniform solution has been adopted. Hungary, Bulgaria, the Ukraine, and Belorussia have a unicameral legislature, whereas Poland, Romania, Croatia, the Czech Republic, and Russia have opted for dual cameral structures.3 The different assessments of the advantages and disadvantages of one or two chambers in the new

Adrian Vatter is Professor of Political Science at the University of Konstanz. The Journal of Legislative Studies, Vol.11, No.2, Summer 2005, pp.194215 ISSN 1357-2334 print=1743-9337 online DOI: 10.1080=13572330500158607 # 2005 Taylor & Francis Group Ltd

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democracies in Eastern Europe have made one thing clear above all: even today, there is hardly any systematic evidence regarding the effectiveness of bicameralism, which is why the statements of the supporters and opponents are correspondingly controversial.4 During the democratisation processes in the twentieth century, the use of a second chamber was repeatedly fundamentally questioned. New Zealand (1950), Denmark (1956), Sweden (1971), Iceland (1991), and Scotland (1999) nally abolished their bicameral legislative structure, and in the course of the globalisation process the necessity of second chambers has once again come into doubt. Some critics concluded that the era of integral bicameralism at the national level was over in Europe.5 Not only do these scholars blame the two-chamber system for slowing down the decisionmaking process, with the consequence that politics is unable to react to the quickly changing economic and social conditions; at the core, they actually criticise the breaking of the will of the people represented by the rst chamber.
THEORIES AND HYPOTHESES

Two-chamber parliaments have usually been established as a result of institutional compromise between older and newer claims of legitimacy. It was either the previously ruling social classes or previously sovereign states and provinces that were integrated into the new political order by means of bicameral structures in that they were given their own legislative chamber as a compensation for their loss of power. Prominent examples for the class representation are the second chambers in unitary countries, such as the UK and Ireland, while the USA and Switzerland have second chambers that typically represent the territorial units of the federal states. Given the diverse national path in the development of bicameral legislatures, it is not surprising to nd substantial institutional variation. There are variations in size, legislative term of ofce, political representation and mode of selection (see Appendix). Because chambers vary especially in size and in electoral rules, members of each chamber will share characteristics not shared with their counterparts in the other chamber. What is typical in this area is that second chambers are almost always smaller than their equivalent rst chamber and the terms of ofce of their members tend to be longer than in the lower house. However, representatives in the second chamber of most bicameral systems are not bound to an imperative mandate. Therefore, over the years, party organisation started to eclipse the originally legitimate idea of a representation of social classes or regional interests. Today, representatives in second chambers generally organise themselves in terms of political parties, and party polarisation is by far the most frequent cleavage.6

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The class and territory-based bicameral systems hardly differ from each other in terms of the party composition of their second chambers. However, it is apparent from Table 1 that there are systematic differences in party representation between rst and second chambers in bicameral political systems. The reason for the different cameral party composition is that in federal states, small and often rural areas with homogeneous settlement and economic structures are over-represented in the second chamber. As the voters in rural and sparsely populated regions have a preference for bourgeois centre parties of liberal or conservative outlook, so the left is traditionally strong in urban and densely populated areas, the former predominate systematically in the seat distribution of the second chamber. Additionally, this effect is reinforced by the fact that, usually, second chambers are elected according to plurality or majority systems and that the number of seats is rather small (see Appendix). In unitary states, such as the UK and Ireland, it is the
TABLE 1 AVERAGE DIFFERENCES IN PARTY REPRESENTATION BETWEEN THE FIRST AND SECOND CHAMBER IN THE 14 BICAMERAL OECD COUNTRIES IN PERCENTAGE POINTS (1971 96)

Spain Switzerland Netherlands Belgium Austria (197796) Extreme Left Green Left Liberal Conservative Extreme Right 22.0 22.6 213.2 10.4 14.2 23.9 0.3 0.7 24.3 0.6 4.1 20.3 20.5 20.4 21.7 0.6 1.3 20.2 22.1 0.7 27.0 7.0 20.2 24.0 20.1 1.6

Italy 21.3 20.7 4.0 22.7 4.0 22.4

France 22.7 210.8 12.1 3.2 20.6

Germany Extreme Left Green Left Liberal Conservative Extreme Right 20.9 22.8 4.7 28.6 7.6

Ireland

UK

USA

Canada

Australia Japan 0.7

20.4 20.7 21.6 3.0

218.0 7.4 14.1

25.5 5.0

29.4 17.7 212.3

24.0 6.3 4.3

20.4 0.9 24.7

Note: The data for Ireland refer to the time periods 197781, 198387 and 199196. Sources: A.S. Banks (ed.), Political Handbook of the World: Governments and Intergovernmental Organizations (Binghamton, NY: CSA Publications, several volumes); Binghampton University: Election Results Archive (http://cdp.binghamton.edu/era/index.html); European Journal of Political Research, Political Data Yearbook, several volumes; W. Nordsiek, Parties and Elections in Europe (http://www.parties-and-elections.de).

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representatives of the once dominant social classes that lead to a dominance of bourgeois and conservative positions in the second chamber. In summary, it can be established that, apart from a few exceptions, liberal and especially conservative parties are over-represented in the second in comparison to the rst chamber. Meanwhile, social democratic parties and the Greens as well as extreme left- and right-wing parties have below average representation. In line with the basic idea of the party difference hypothesis,7 it follows that political systems with a strong second chamber are expected to deliver notably more liberal (less state) and conservative (status quo) policy results. The term liberal stands here in the classical European sense for reduction of state intervention, free enterprise economics and the free development of the individual, whereas conservatism means to support the status quo, to uphold the value of tradition and to oppose major changes in laws and institutions. In other words: the existence of a second chamber is likely to lead to a weaker welfare state and fewer policy reforms. Furthermore, it is to be expected that second chambers, given the representative function of their federal units, present an effective protection of the existing division of power, thereby creating a federal counterbalance to democratic majority rule.8 Main Hypotheses Based on the presented ndings regarding the party composition of the second chambers, the main hypotheses about the expected effects of bicameral institutions can be summarised as follows: Strong bicameralism (see subsequent measurement in research design)
. .

reduces state intervention in favour of market forces (liberal effect) weakens reform forces in favour of status quo interests (conservative effect) restrains the central state in favour of the federal units (decentralising effect).

The postulated effects can be derived not only from empirical ndings regarding the party composition in the second chambers, but also from theories of institutional veto points. The neo-institutional approach is based on the assumption that political institutions greatly inuence not only negotiation and decision-making processes (politics) and the related strategies of the political actors; by structuring political interactions, they also lead to different policy outcomes. In this context, veto player theory9 argues that with a growing number of institutions, the consent of which is necessary to make a policy decision, the cabinets scope of action will decrease. As a consequence, it will become more difcult for the cabinet to assume its responsibilities and to implement necessary reforms. Institutions that have strong veto positions

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signicantly reduce the central states scope of administrative and nancial action. This slows the expansion of the welfare state. According to this theory, strong second chambers act as competitive veto players that limit the prospect for change of the status quo, especially if they strongly differ from the rst chamber in terms of their party composition.10 The outcomes of strong second chambers that are postulated here are similar to those suggested by neo-liberal concepts. Further Hypotheses On the basis of the relevant literature and of constitutional theory, the classic functions and goals of second chambers can be summarised as follows:
.

Checks and balances. Even Montesquieu and later James Madison in The Federalist Papers (in particular 51 and 63) pointed out the positive function of a second chamber as a guarantee for the restraint and separation of powers between institutions. Dual cameral structures are specically seen as institutional counterbalances to executive power concentration, given that the cabinet requires the consent of multiple majorities to implement its policies.11 Political stability. In addition to the status quo function, second chambers are claimed to have a positive effect in that they increase regime stability and ensure political continuity.12 Especially in unitary systems, where second chambers lack a territory-based representative function, dual cameral structures are mainly justied by their stabilisation function. The political composition of the second chamber tends to be more constant because it generally has longer legislative terms of ofce than the rst chamber and, in many cases, members are replaced in a staggered manner. This promotes greater political stability. Protection of minorities. The intention to preclude a tyranny of the majority13 and to integrate regional minority interests as well as to create a balance between larger and smaller member states was already vital to the writers of the American Constitution.14 Furthermore, it has been claimed that bicameral structures have a general positive effect on the protection of cultural and social minorities.15 Better legislation thanks to second opinion. One of the most important advantages of the two chamber system as seen by James Madison is the generally higher quality of the parliamentary outputs thanks to double deliberation of the legislation (inter-organ control). The second chamber plays the role of a chambre de reexion or Rat der Weisen, considering long-term consequences and assuring a high standard and awless work that should rule out arbitrary and inconsiderate decisions.

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The above hypotheses are tested empirically in statistical cross-sectional analyses of the member states of the OECD (except Luxembourg, Turkey and Iceland) for the time period from 1971 to 1996. The selection of 21 developed industrial states in the western hemisphere meets the requirements of the most similar cases design.16 The advantage of the chosen research design is that the OECD countries have similar consolidated political systems and economic patterns of development, whereas in states other than the highly developed western industrial states, the political and social conditions for bicameral systems as well as the expected effects may be too disparate. The Degree of Bicameralism The following section introduces the variable of interest and discusses the operationalisation of the postulated hypotheses. The key (independent) variable is the degree of bicameralism in the OECD countries. It was operationalised according to Arend Lijpharts bicameralism index for the period from 1971 to 1996.17 He distinguishes between unicameralism and between weak, medium-strength and strong bicameralism to construct an index of the cameral structures that ranges from 1.0 to 4.0. Lijpharts criteria to classify the cameral structures and assign them to one of the four principal categories are on the one hand their respective formal constitutional powers (symmetry) and on the other hand the design of the procedure by which members of the second chamber are elected (congruence). Lijphart denes congruence as similarity of political composition. Regardless of the variations in selection methods, if the two houses have similar political representation, they are deemed congruent. Disparities in power range from full symmetry, where agreement of the two houses is necessary to enact a law, to total asymmetry, where one house is granted decision-making power. Using these two categories, Lijphart constructs three types of bicameralism. He assumes that strong bicameral legislatures are characterised by signicant differences in composition and by relatively symmetric power. Weak bicameralism is characterised either by asymmetric power or by congruent chambers. And insignicant bicameralism is characterised by both asymmetric power and congruence. A comparison of Lijpharts bicameralism index with indices of other authors makes clear that there is scant controversy amongst experts when it comes to the classication of the individual countries. The indexes by Colomer, Huber et al., and Schmidt18 are strongly correlated. Table 2 gives an overview of the cameral structures in the 21 OECD countries for the period from 1971 to 1996.

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TABLE 2 THE CAMERAL STRUCTURE OF THE LEGISLATURES IN 21 OECD COUNTRIES (1971 96)

Incongruent Symmetric Strong Bicameralism (4) Australia, Germany, Switzerland, USA Medium Bicameralism (3) Canada, France, Spain UK (2.5)

Congruent Medium Bicameralism (3) Belgium, Italy, Japan The Netherlands Weak Bicameralism (2) Austria, Ireland Unicameralism (1) Denmark, Finland, Greece, New Zealand, Norway (1.5), Portugal, Sweden

Asymmetric

Notes: The values in parentheses represent the value on Lijpharts bicameralism scale. Congruence means similarity of political composition and symmetry means equal constitutional powers of the two chambers. Norway (1.5) has a single chamber system, which is divided into two sub-chambers (false mixed system). Even though bicameralism in the UK is incongruent, Lijphart classies it as medium to weak due to its lack of democratic legitimacy. Source: Own compilation based on A. Lijphart, Patterns of Democracy: Government Forms and Performance in 36 Countries (New Haven, CT and London: Yale University Press, 1999), p.314.

The Dependent Variables (Performance Indicators) The postulated effects of second chambers needs to be operationalised with measurable, widely used indicators. Unless otherwise indicated, the data sources are OECD statistics.19 The main hypotheses have been operationalised as follows. The rst postulated effect of bicameralism is a reduction of state intervention in favour of market forces. It will be measured using the following four indicators: the growth of government expenditure (ratio of public spending to Gross National Product); the growth of social welfare expenditure (ratio of social spending to GNP); the change in the tax burden (ratio of tax load to GNP); and the growth of the share of public sector employees in the economically active population. With these four indicators of an increase in state intervention during the period under consideration, the extent to which liberal theory of less state and more market applies will be empirically tested. The second effect is the status quo bias or innovative weakness and inertia of a political system. There are no common indicators in international comparative public policy research to measure this effect. However, there are a number of studies that analysed and measured reform capacity and innovative strength of political systems in selected policy areas, constructing relevant indicators. The hypothesis test is based on four studies: the research done by Tsebelis20 regarding the extent of legal reform in labour market policy

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during the 1980s and 1990s; the study by Wagschal21 who constructed an indicator for the degree of reform in tax policy; Wilenskys22 analysis of innovation in family policy and Estes23 index of social progress that measures reforms in areas such as health and education policy. Third, the degree of division of power between central government and federal units will be operationalised in line with Castles24 by two indicators: scal centralisation and scal difculty. Fiscal centralisation is equivalent to central state revenue as a percentage share of total scal revenue. Fiscal difculty, according to Scharpf,25 measures the percentage rate by which the budget of the central government would have to be increased in order to achieve a one per cent boost of total demand. The two variables should reect the degree to which the federal units succeed in defending the resources and powers of the lower state levels. Therefore, these indicators show the success of territorial representation and whether there exists a federal counterbalance to democratic majority rule. The following indicators have been used to measure the other hypotheses:
.

The hypothesis about the separation of powers in particular the restraint of executive power was operationalised by two indicators: rst, Lijpharts26 index of executive dominance and second by Kemans27 balance indicator that measures the power relationship between parliament and cabinet in political systems. The hypothesis concerning political stability has been measured by a number of indicators in the literature.28 For the following analysis, three indicators have been selected: the frequency of cabinet changes, the level of political unrest, and strike activity, measured by the number of annually lost working days per 1000 employees. The hypothesis regarding minority protection can be exclusively applied to special regional or territorial minority interests and in particular to the balance between large and small constituent federal units. This balance will be measured by the degree of over-representation of small units in the second chamber. An appropriate measure of inequality is the Gini Index29 that reects the proportion between the share of seats in the second chamber and the represented share of the population.30 On the other hand, the protection of minorities can be understood in a broader sense, referring to the integration of cultural and social minorities in general. Unfortunately, dened that way, minority protection is extraordinarily difcult to measure, as there are different forms of ethnic and religious minorities in each country. In an analogy to Lijphart31 and Taagepera,32 who use the integration of women in politics as a proxy variable for political and ethnic minority protection, this analysis takes the

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strength of womens representation in the national parliaments as an indicator for non-territorial minority protection. The last postulated effect assumes that thanks to the second opinion in bicameral systems the resultant legislation will guarantee greater popular satisfaction and more economic prosperity. In the tradition of public policy research, this will be measured using common democratic and economic performance indicators.33 Democratic performance is operationalised rst by the level of subjective popular satisfaction with the functioning of the democratic system and of the parliament, as measured in Euro Barometer surveys.34 Second, political performance is measured by Dahls35 known index of democracy, which assesses the quality of democracy in a political system on a six-point scale, using indicators such as freedom of the press and of assembly, competitiveness of the party system, strength of parties and interest groups and effectiveness of parliament. Finally, the measurement of economic performance is based on three key variables: economic growth, changes in the unemployment and ination rate.

CONTROL VARIABLES

Whether the bicameralism variable signicantly helps to explain more than 20 performance indicators will be tested in regression analyses. The previous section dealt exclusively with the effects of bicameralism on policy performance. It is obvious, however, that there are other factors that inuence policy and economic performance and which need to be included in a statistical analysis. In the following, the most important control hypotheses will be presented briey. Comparative public policy research, which is concerned with the determinants and effects of government policy, provides several approaches to explain differences in policy and economic outcomes. It is worthwhile to consider them systematically in order to gauge the explanatory power of the bicameralism variable. Broadly speaking, four lines of theory have dominated the cross-national study of public policy in economically advanced democracies: the institutionalist approach, the partisan theory, the theory of power resources of organised interests and the hypothesis of socio-economic determination.36 These approaches will be used as control hypotheses. According to the neo-institutionalist approach, policy differences are largely attributable to differences in political institutions as well as to differences in the strategies pursued by interdependent collective actors.37 Political institutions are decisive for the success or failure of economic and social policies. One of the most important aspects of institutional arrangements is the formal and informal modes of conict resolution. The distinction between consensus and Westminster democracies plays an especially prominent role in this respect.38 Consensus democracies are characterised by sophisticated

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compromise techniques, which often lead to the adoption of packages of measures in which each party receives some kind of compensation and where minority interests are considered over-proportionally. Theoretically, it is therefore to be expected that this process of mutual concessions favours extensive state intervention with a fully developed tax and welfare state. Oversized government coalitions and highly fragmented party systems with numerous cleavages, which are typical features of consensus democracies, promote expansive social policies. The degree of consensus democracy for the period from 1971 to 1996 will be measured according to Lijpharts39 rst (executiveparties) dimension. According to the partisan theory, the party composition of the cabinet is a major determinant of variation in policy outcomes in constitutional democracies.40 The theory states that parties, in exchange for political support, serve as agents for the preferences and ideologies of their voters. It is mainly with respect to economic and social policy that this hypothesis has been developed and empirically tested. According to the inuential parties do matter view, the strength of the major party of the right makes a signicant difference in social policy by limiting welfare expenditures. Conversely, it is maintained that the stronger the participation of left-wing parties in the cabinet, the higher welfare spending will be. The strength of left-wing parties in government was selected as a control variable, based on the assumption that social democratic welfare capitalism has a signicant inuence on the expansion of the tax and welfare state.41 According to the socio-economic hypothesis a functionalist approach political and institutional factors are subordinate to socio-economic variables. Public policy is mainly understood as a reaction to structurally generated problems of social and economic development. The hypothesis that socio-economic development goes along with increasing social differentiation, mounting economic wealth as well as social and political modernisation lies at the heart of this approach. The level of economic afuence, measured by the GNP of a country, is the most commonly used control variable. In summary, three control variables that reect the different approaches to public policy research will be included in the following regression models: the degree of consensus democracy, the strength of left-wing parties in the government, and the level of economic afuence of a country.
RESULTS

The empirical results are reported in Tables 3 7 and will be commented upon briey. The cross-sectional analysis (OLS method) follows the frequently used two-step approach.42 First, we will calculate bivariate regressions using a large number of variables. Then, we will estimate multiple regression models for

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TABLE 3 BIVARIATE REGRESSION ANALYSES OF THE EFFECT OF BICAMERALISM ON SELECTED PERFORMANCE INDICATORS IN 21 OECD COUNTRIES (1971 96)

Indicators State intervention Government expenditure Welfare expenditure Tax burden Public sector employment Policy reform Labour market reform Family policy reform Tax policy reform Social policy reform Decentralisation Fiscal centralisation Fiscal difculty Checks and balances Executive dominance Executive-legislative balance Regime stability Cabinet changes Political unrest Strike activity Minority protection Over-representation of small territorial units Female representation in parliament Democratic performance Satisfaction with democracy Satisfaction with parliament Dahls index of democracy Economic performance Economic growth Unemployment rate Ination rate Note:

Standardised Regression Coefcients 20.09 20.01 20.12 20.17

Absolute t-value 20.73 20.52 20.54 20.74

Absolute t-value Coefcients 4.53 2.40 2.76 4.56

Number of Countries (N) 20 20 20 19

20.18 20.13 20.08 20.03 20.03 20.34 20.02 0.21

20.50 20.45 20.44 20.50 20.51 0.63 20.02 0.17

2.18 1.98 1.97 2.26 2.57 3.53 0.12 0.67

16 18 20 19 21 21 21 18

20.22 0.08 20.01 0.14 20.07

20.55 0.16 20.07 0.87 20.66

2.60 0.65 0.27 6.86 3.60

19 19 19 18 19

0.01 20.02 0.18

0.50 20.18 0.31

0.64 0.71 1.31

19 17 18

20.18 20.05 22.62

20.14 20.15 20.56

0.63 0.65 2.98

21 21 21

p , 0.01, p , 0.05.

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TABLE 4 MULTIPLE REGRESSIONS OF THE EFFECTS OF BICAMERALISM ON SELECTED PERFORMANCE INDICATORS IN 21 OECD COUNTRIES (1971 96) Dependent Variables: Indicators of State Intervention

Independent Variables Constant Bicameralism Consensus Democracy Left-wing government Economic afuence

Government Expenditure (Regression Coefcients) 33.05 24.42 (20.56) 3.50 (0.40) 0.05 (0.12) 20.00 (0.06) adj. R2 0.62

Welfare Expenditure (Regression Coefcients) 11.36 23.55 (20.67) 2.78 (0.48) 0.05 (0.20) 0.01 (0.47) adj. R2 0.65

Tax Burden (Regression Coefcients) 14.71 22.13 (20.47) 0.68 (0.13) 20.00 (20.03) 20.00 (20.13) adj. R2 0.31

Public Sector Employment (Regression Coefcients) 6.96 21.81 (20.42) 0.97 (0.21) 0.09 (0.49) 20.00 (20.04) adj. R2 0.72

Note: OLS method; p , 0.01, p , 0.05 (two-tailed test); the estimated regression coefcients are listed in the rst line, the standardised regression coefcients just below in parentheses. Examinations of tolerance levels indicate no serious multicollinearity.

TABLE 5 M U L T I P L E R E G R E S S I O N S O F T H E E FF E C T S O F B I C A M E R A L I S M O N S E L E C T E D PERFORMANCE INDICATORS IN 21 OECD COUNTRIES (1971 96) Dependent Variables: Indicators of Policy Reform

Independent Variables Constant Bicameralism Consensus Democracy Left-wing government Economic afuence

Labour Market Policy (Regression Coefcients) 5.35 21.71 (20.62) 21.55 (20.53) 0.01 (0.13) 0.00 (0.34) adj. R2 0.31

Family Policy Reform (Regression Coefcients) 5.75 0.02 (0.03) 0.40 (0.12) 0.08 (0.58) 20.01 (20.19) adj. R2 0.30

Tax Policy Reform (Regression Coefcients) 14.34 22.96 (20.55) 21.19 (20.21) 20.00 (20.02) 0.00 (0.27) adj. R2 0.26

Social Policy Reform (Regression Coefcients) 187.42 21.47 (20.08) 2.14 (0.11) 0.44 (0.49) 20.00 (20.25) adj. R2 0.31

Note: OLS method; p , 0.01, p , 0.05 (two-tailed test); the estimated regression coefcients are listed in the rst line, the standardised regression coefcients just below in parentheses. Examinations of tolerance levels indicate no serious multicollinearity.

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TABLE 6 MULTIPLE REGRESSIONS OF THE EFFECTS OF BICAMERALISM ON SELECTED P E R F O R M A N C E I N D I CA T O R S I N 2 1 O E C D C O U N T R I E S ( 1 9 7 1 9 9 6 ) Dependent Variables: Indicators of Decentralisation

Independent Variables Constant Bicameralism Consensus Democracy Left-wing government Economic afuence

Fiscal Centralisation (Regression Coefcients) 99.33 27.85 (20.55) 24.87 (20.31) 20.16 (20.23) 20.01 (20.16) adj. R2 0.31

Fiscal Difculty (Regression Coefcients) 1.65 0.99 (0.54) 0.32 (0.16) 20.06 (20.07) 0.00 (0.14) adj. R2 0.30

Note: OLS method; p , 0.01, p , 0.05 (two-tailed test); the estimated regression coefcients are listed in the rst line, the standardised regression coefcients just below in parentheses. Examinations of tolerance levels indicate no serious multicollinearity.

those performance variables where in the rst step it was found that the bicameralism variable had signicant explanatory power. Table 3 shows the results of the bivariate regression analyses of the effect of the degree of bicameralism in the 21 OECD countries on different dependent variables. The most important results of the bivariate analyses can be summarised as follows. The signs and signicance of the regression coefcients show that the main hypotheses (state intervention, policy reform, decentralisation) about the effects of cameral structures are basically correct. The more important the second chamber, the smaller will be the scal share of the central state compared to the share of the constituent units, the slimmer the welfare and tax

TABLE 7 MULTIPLE REGRESSIONS OF THE EFFECTS OF BICAMERALISM ON SELECTED PERFORMANCE INDICATORS IN 21 OECD COUNTRIES (1971 96)

Independent Variables Constant Bicameralism Consensus democracy Left-wing government Economic afuence

Cabinet Changes (Regression Coefcients) 6.81 20.98 (20.40) 20.52 (20.20) 0.03 (0.29) 20.00 (20.03) adj. R2 0.37

Female Representation (Regression Coefcients) 14.39 24.94 (20.51) 3.29 (0.33) 0.08 (0.41) 0.01 (0.27) adj. R2 0.69

Note: OLS method; p , 0.01, p , 0.05 (two-tailed test); the estimated regression coefcients are listed in the rst line, the standardised regression coefcients just below in parentheses. Examinations of tolerance levels indicate no serious multicollinearity.

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state, the lower state intervention in general and the stronger the persistence in the status quo in certain policy areas, such as labour market and social policy. In contrast to the main hypotheses, the majority of the other hypotheses about the effect of bicameralism have not been corroborated in the bivariate analysis. The assumption that dual structures restrain executive power has to be rejected on the basis of the above results (checks and balances variables). The thesis of greater political stability within bicameral systems has only been conrmed in part (regime stability variables): on the one hand, there are signicantly more cabinet changes in unicameral than in bicameral systems, but the systems do not differ with respect to the extent of political unrest or strike activity. The hypothesis of a higher quality of democracy in bicameral systems has not been conrmed (democratic performance variables). Finally, the thesis that the second opinion results in better legislation, which will signicantly enhance subjective popular satisfaction with the functioning of democratic institutions, also lacks empirical foundation. The bivariate results regarding economic performance of cameral structures vary (economic performance variables). While there are no differences in economic growth and unemployment rates, they clearly differ with respect to ination rates. According to the bivariate estimations, bicameral systems are signicantly more successful in combating ination than unicameral systems. However, subsequent multivariate analyses made clear that this was a spurious correlation: the differences in combating ination are rather due to differences in the degree of central bank independence. National banks are usually more independent in bicameral than in unicameral systems, where politics generally exerts a stronger inuence, which has a negative impact on the stability of the monetary value of a currency.43 Mixed results have been obtained regarding the hypothesis that second chambers full the function of protecting minorities (minority protection variables). As far as the representation of small territorial units is concerned, the regression coefcient is highly signicant and positive, which demonstrates that small areas are generally over-represented in bicameral systems. Thus, one of the fundamental demands of the fathers of the American Constitution is still met today, namely to strengthen the position of small federal units at the expense of large and populous ones. At the same time, it becomes clear that compared to unicameral systems, women are signicantly under-represented in bicameral structures. A comparison of the gender representation between rst and second chambers in European democracies further claries this point. While in the mid-1990s nearly 15 per cent of the representatives in rst chambers were female, the share of women in second chambers was only about half that, namely 8.7 per cent.44 This under-representation of women in second chambers can be attributed to the systematic over-

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representation of bourgeois and conservative parties that are traditionally dominated by men (see Table 1). Tables 4 to 7 report the inuence of the bicameralism variable in multiple regression analyses. The empirical results in Table 4 corroborate the initial hypothesis: the four indicators of the level of state intervention are all strongly associated with bicameralism. The bicameralism variable has signicant explanatory power in all of the four regression models. Above all, the second chamber remarkably slows down the expansion of government intervention in general and of the welfare state in particular.45 The thesis that, due to its liberal and conservative constellation and its powerful veto position, a strong second chamber leads to diminished state intervention has thus been conrmed. The empirical results in Table 5 are mixed. While a strong bicameral structure effectively limits reforms in areas such as labour market or tax policy, cameral structure is less relevant to innovation in family and social policy. In these typical areas of welfare policy, the strength of left-wing parties in the cabinet has a much stronger inuence on reforms. The mixed results mirror the fact that liberal and conservative members of the second chambers largely agree on employment and tax policy, but not on welfare and social policy reforms. There is a broad basic consensus that government inuence in the areas of economic and nancial policy ought to be limited, whereas in social policy, differences between basic liberal and conservative values emerge more clearly.46 It seems plausible that due to these different positions of the centre and right-wing parties within the second chamber, the veto power of bicameral structures will be diluted in these policy areas. Table 6 conrms the hypothesis that the degree of decentralisation of a country is inuenced by its cameral structure. Even if other important control variables are considered in the regression models, the strength of the second chamber still turns out to be an effective instrument against the increasing centralisation of the state. The thesis of a stabilising effect of dual cameral structures is, however, not supported by the empirical ndings.47 The case of Australia illustrates that strong bicameralism can even unfold the opposite effect in parliamentary systems. Australias constitutional compromise between the US model of a directly elected senate and the Westminster model of a majoritarian party system led to a prolonged constitutional and government crisis in the mid1970s. The presence of different political majorities in the two chambers completely blocked public policy-making.48 The Australian government had no choice but to call for new elections, although it had the necessary majority in the rst chamber and was, therefore, sufciently legitimised following the logic of the Westminster model. Consequently, in pure parliamentary systems with symmetric bicameralism, the cabinets simultaneous

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responsibility to two legislative chambers with potentially different majorities can cause higher political instability. Examples of governments resigning prematurely due to a lack of support in the second chamber are not only found in the Australian constitutional crisis of 1975, but also in the UK and in France during the nineteenth and early twentieth centuries and recently in Canada. Furthermore, Table 7 shows that bicameralism signicantly increases the under-representation of women in politics. The existence of a second chamber proves to be a signicant obstacle to gender equality in politics. The explanatory power of the bicameralism variable with respect to the weak presence of women in national parliaments is stronger than that of the level of economic development, the degree of consensus democracy and the strength of left-wing parties in cabinet.49 Finally, the results also revealed that the parliamentary over-representation of inhabitants from small and sparsely populated regions constitutes one of the strongest effects of bicameral systems.
CONCLUSIONS

How do bicameral systems work? The empirical analysis shows that bicameral structures act as a signicant brake on government intervention and on the expansion of the welfare state (see summary of ndings in Table 8). In this sense, bicameralism is an effective institution to strengthen liberal market forces. Furthermore, it is a powerful veto instrument to block policy reforms, even though this statement needs some differentiation: if the members of the second chamber differ in their views, as is particularly the case with respect to reforms in social policy, they are poor protectors of the status quo. However, if the members of the dominant parties agree on their political goals, they are powerful veto players. Given the dominance of centre and right-wing parties in the second chamber, this especially applies to economic and nancial policy. Finally, dual cameral structures also have a decentralising effect. Not only in theory, but also in practice, second chambers represent an obstacle to efforts of state centralisation. With the exception of the over-representation of small and sparsely populated areas, none of the advantages ascribed to second chambers in classical political theory have actually been conrmed. Bicameral structures pose no barrier to executive dominance, nor do they promote stability within political systems or improve the quality of democracy or economic performance. On the contrary, with regard to social representation, they have a strong negative effect: in comparison to systems with a single chamber and bicameralism signicantly reduces womens electoral success.

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TABLE 8 OVERVIEW OF THE EFFECTS OF BICAMERALISM: HYPOTHESES, INDICATORS, AND RESULTS

Hypotheses and Indicators State intervention Status quo bias Government expenditure/GNP Welfare expenditure Tax revenue/GNP Share of civil service employees Empirical Results Barrier against state intervention and paticularly welfare state expansion Labour market reform Family policy/ GNP Tax reform Social reform

Decentralisation Fiscal centralisation dominance Fiscal difculty reform

Power Restraint Executive Executivelegislative relationship

() Barrier against reforms in economic policy, less in social policy

Strong barrier against centralisation

0 No restraint of government power

Hypotheses and Indicators Political stability Cabinet changes Minority protection Representation of small territorial units Female representation in parliament Quality of Democracy Citizen satisfaction with parliament/ democracy Democracy index (Dahl) Economic Performance Economic growth

Political unrest Strike activity Empirical Results 0 No higher stability of the political system

Unemployment rate Ination rate

/ 2 Representation of small territorial units increased, of women reduced

0 Assessment of democratic quality neither subjectively nor objectively higher

0 No higher economic performance

Note: : Hypothesis conrmed (): Hypothesis mostly conrmed. 0: Hypothesis not conrmed 2: Results contrary to hypothesis.

BICAMERALISM AND POLICY PERFORMANCE NOTES

211

1. W.J. Patzelt, Vergleichende Parlamentarismusforschung als Schlussel zum Systemvergleich. Vorschlage zu einer Theorie und Forschungsdebatte, Zeitschrift fur Parlamentsfragen, 1 (1995), pp.35585, regards comparative parliamentary research as key to the comparative analysis of political systems. 2. S.S. Schuttemeyer and R. Sturm, Wozu Zweite Kammern? Zur Reprasentation und Funktio nalitat Zweiter Kammern in westlichen Demokratien, Zeitschrift fur Parlamentsfragen, 3 (1992), pp.51736, at p.518. 3. N. Baldwin and D. Shell (eds.), Second Chambers (London and Portland: Frank Cass, 2001); and W. Merkel, Systemtransformation (Opladen: Leske Budrich, 1999). 4. Baldwin and Shell, Second Chambers; G. Tsebelis and J. Money, Bicameralism (Cambridge: Cambridge University Press, 1997), p.1. 5. R.E. Germann, Staatsreform. Der Ubergang zur Konkurrenzdemokratie (Bern, Stuttgart and Wien: Haupt, 1994), p.75. 6. Schuttemeyer and Sturm, Wozu Zweite Kammern? Zur Reprasentation und Funktionalitat Zweiter Kammern in westlichen Demokratien, p.528. 7. F.G. Castles, Decentralization and the Post-War Political Economy, European Journal of Political Research, 36 (1999), pp.2753; D.A. Hibbs, Political Parties and Macroeconomic Policy, American Political Science Review, 71(1977), pp.146787; A.M. Hicks and D.H. Swank, Politics, Institutions, and Welfare Spending in Industrialized Democracies 196082, American Political Science Review, 86 (1992), pp.65874; M.G. Schmidt, The Impact of Political Parties, Constitutional Structures and Veto Players on Public Policy, in H. Keman (ed.), Comparative Democratic Politics (London: Sage Publications, 2002), pp.16684. 8. M. Heger, Deutscher Bundesrat und Schweizer Standerat: Gedanken zu ihrer Entstehung, ihrem aktuellen Erscheinungsbild und ihrer Rechtfertigung. Beitrage zum Parlamentsrecht (Berlin: Duncker und Humblot, 1990). 9. G. Tsebelis, Veto Players: How Political Institutions Work (Princeton, NJ: Princeton University Press, 2002). 10. Tsebelis and Money, Bicameralism, p.75. 11. Heger, Deutscher Bundesrat und Schweizer Standerat: Gedanken zu ihrer Entstehung, ihrem aktuellen Erscheinungsbild und ihrer Rechtfertigung. Beitrage zum Parlamentsrecht, p.127; and L. Trivelli, Le bicameralisme: Institutions comparees: Etude historique, statistique et critique des rapports entre le Conseil National et le Conseil des Etat (Lausanne: Payot, 1975), p.29. 12. In A. Hamilton, J. Jay and J. Madison, The Federalist (Cambridge, MA: Harvard University Press, 1961), No.10, 62 and 63, James Madison showed himself convinced of the stability promoting effect of bicameral structures. See also Tsebelis and Money, Bicameralism. 13. This is where the game theory argument by W.H. Riker, The Justication of Bicameralism, International Political Science Review, 13/1 (1992), pp.101 16, ties in. He claims bicameralism to be an effective institution to preclude cyclical majorities and, thus, a protection against tyrannical majority decisions. 14. Tsebelis and Money, Bicameralism, p.27. 15. Montesquieu in particular justies the two-chamber system with the protection of certain social groups: permettre une meilleure representation des differents corps de la nation (cited by Trivelli, Le bicameralisme: Institutions comparees: Etude historique, statistique et critique des rapports entre le Conseil National et le Conseil des Etat, p.31). 16. A. Przeworski and H. Teune, The Logic of Comparative Social Inquiry (New York: Wiley, 1970), p.34. 17. A. Lijphart, Patterns of Democracy: Government Forms and Performance in 36 Countries (New Haven, CT and London: Yale University Press, 1999), p.314. 18. J.P. Colomer, Political Institutions in Germany (London: Routledge, 1996); E. Huber, C. Ragin and J. D. Stephens, Social Democracy, Christian Democracy, Constitutional Structure, and the Welfare State, American Journal of Sociology, 99/3 (1993), pp.71149; and M.G. Schmidt, Demokratietheorien (Opladen: Leske & Budrich, 1996). 19. J.-E. Lane, D. McKay and K. Newton, Political Data Handbook OECD Countries (Oxford: Oxford University Press, 2nd edn. 1997).

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20. G. Tsebelis, Veto Players and Law Production in Parliamentary Democracies: An Empirical Analysis, American Political Science Review, 93/3 (1999), pp.591605, at p.605. 21. U. Wagschal, Schranken staatlicher Steuerungspolitik: Warum Steuerreformen scheitern konnen, in A. Busch und T. Plumper (eds.), Nationaler Staat und internationale Wirtschaft (Baden-Baden: Nomos, 1999), pp.22347, at p.237. 22. H.L. Wilensky, Common Problems, Divergent Policies: An 18-Nation Study of Family Policy, Public Affairs Report, 31 (1990), pp.13; and H.L. Wilensky, Rich Democracies: Political Economy, Public Policy, and Performance (Berkeley, CA: University of California Press, 2002). 23. R.J. Estes, The Social Progress of Nations (New York: Praeger, 1994). 24. Castles, Decentralization and the Post-War Political Economy, p.34. 25. F.W. Scharpf, Optionen des Foderalismus in Deutschland und Europa (Frankfurt a. M.: Campus, 1994). 26. Lijphart, Patterns of Democracy: Government Forms and Performance in 36 Countries, p.324. 27. H. Keman, Federalism and Policy Performance: A Conceptual and Empirical Enquiry, in U. Wachendorfer-Schmidt (ed.), Federalism and Political Performance (London and New York: Routledge, 2000), pp.196227, at p.205. 28. See M. Freitag, Politik und Wahrung. Ein internationaler Vergleich (Bern, Stuttgart and Wien: Haupt, 1999). 29. The Gini Index reects the degree of over-representation of small territorial units in the second chamber (that is, the proportion between the share of seats in the second chamber and the represented population share). It ranges from 0 to 1, with 1 indicating complete inequality and 0 complete equality. 30. Lijphart, Patterns of Democracy: Government Forms and Performance in 36 Countries, p.208. 31. Lijphart, Patterns of Democracy: Government Forms and Performance in 36 Countries, p.280. 32. R. Taagepera, Beating the Law of Minority Attrition, in W. Rule and J. Zimmerman (eds.), Electoral Systems in Comparative Perspective: Their Impact on Women and Minorities (Westport: Greenwood, 1994), pp.23645, at p.244. 33. Based on a cursory comparison of the UK and the USA, Riker, The Justication of Bicameralism, pp.114 ff, appears to be strongly convinced that the existence of a powerful second chamber will result in a higher quality of democracy and in stronger economic growth. 34. See H.-D. Klingemann and D. Fuchs, Citizens and the State: Beliefs in Government (Oxford: Oxford University Press, 1995), p.304. 35. R.A. Dahl, Polyarchy: Participation and Opposition (New York: Garland Publishing, 1991). 36. Schmidt, Demokratietheorien; and Schmidt, The Impact of Political Parties, Constitutional Structures and Veto Players on Public Policy. 37. P.A. Hall, Governing the Economy: The Politics of State Intervention in Britain and France (New York: Oxford University Press, 1986; P.A. Hall and R.C. Taylor, Political Science and the Three New Institutionalisms, Political Studies, 44/5 (1996), pp.93657; E.M. Immergut, Health Politics: Interests and Institutions in Western Europe (Cambridge: Cambridge University Press, 1992); and K.R. Weaver and B.A. Rockman, Do Institutions Matter? Government Capabilities in the United States and Abroad (Washington: Brookings Institution, 1993). 38. Lijphart, Patterns of Democracy: Government Forms and Performance in 36 Countries. 39. Lijphart, Patterns of Democracy: Government Forms and Performance in 36 Countries, p.312. 40. Castles, Decentralization and the Post-War Political Economy; Hibbs, Political Parties and Macroeconomic Policy; Hicks and Swank, Politics, Institutions, and Welfare Spending in Industrialized Democracies 196082; and Schmidt, The Impact of Political Parties, Constitutional Structures and Veto Players on Public Policy. 41. A further line of theory that has been mentioned is the hypothesis of power resources of organised interests. A common indicator here is the strength of the trade unions in a country. However, as this indicator is strongly correlated with the strength of left-wing parties in the government, only the latter will be used to estimate the regressions.

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42. This two-step approach corresponds with the one used in international comparative research on the performance of political institutions. See in detail for example M. Coppedge, District Magnitude, Economic Performance, and Party-System Fragmentation in Five Latin American Countries, Comparative Political Studies, 30 (1997), pp.15685, at p.160; and Lijphart, Patterns of Democracy: Government Forms and Performance in 36 Countries. 43. The degree of bicameralism and the index of central bank independence, dened by Freitag, Politik und Wahrung. Ein internationaler Vergleich, p.108, on the basis of expert opinions for the period from 1970 to 1990 (with 1 maximum independence; 3 minimum independence), are correlated by -0.53 (N 18). In a multiple regression analysis to explain differences in ination between the countries, the index of central bank independence is highly signicant, whereas the bicameralism indicator loses its signicance. 44. Inter-Parliamentary Union, Women in Parliaments 19451995: A World Statistical Survey (Geneva: IPU, 1995), p.48. 45. The bicameralism variable remains highly signicant for the explanation of differences in welfare expenditure even if further common control variables, such as the age structure of a country (measured by the proportion of people aged over 65 in the entire population), are included in the model. 46. K. van Kersbergen, Social Capitalism: A Study of Christian Democracy and the Welfare State (London: Routledge, 1995). See also Herbert Kitschelts, The Transformation of European Social Democracy (Cambridge: Cambridge University Press, 1994), new conception of what left and right, liberal and conservative policies mean in advanced industrial societies. According to Kitschelt, liberal and left political visions are oriented towards redressing the institutional balance among principles of social order in favour of the realisation of those values that have been ignored in the existing social order, whereas conservative-authoritarian and right visions, in contrast, defend dominant values and organisational correlates of the existing society. 47. Numerous studies indicate that government stability depends much more on institutional factors, such as the electoral and party systems (fragmentation and polarisation) and the type of government coalition. See P. Warwick, Government Survival in Parliamentary Democracies (Cambridge: Cambridge University Press, 1995). 48. Schuttemeyer and Sturm, Wozu Zweite Kammern? Zur Reprasentation und Funktionalitat Zweiter Kammern in westlichen Demokratien, p.527. 49. The effect of bicameralism remains signicant even if further variables are controlled for, like for example the degree of disproportionality of the electoral system and the female share of the economically active population the two factors that, according to R.E. Matland, Womens Representation in National Legislatures: Developed and Developing Countries, Legislative Studies Quarterly, 23/1 (1998), pp.10925, are the most important determinants of womens representation in national parliaments.

APPENDIX OVERVIEW OF THE STRUCTURES OF THE SECOND CHAMBERS IN THE 14 BICAMERAL OECD COUNTRIES

Country Australia

Size 76

Term (years) 6

Congruence No

Mode of Selection (Method of Election) Half of the members are elected every 3 years; except for 4 senators representing the federal territories who serve only 3-year-terms; each of the 6 states elects 12 senators by proportional representation.

(Table continued )

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APPENDIX CONTINUED

Country Austria

Size 64

Term (years) 5-6

Congruence Yes

Mode of Selection (Method of Election) The state parliaments send a number of delegates to the upper house based on states population; federal councillors serve terms corresponding to the term of the state legislature. 40 members are popularly elected; 31 members are indirectly chosen within the Dutch and French-speaking communities or are co-opted from the royal family. Appointed by governor-general on the recommendation of the prime minister; senators are expected to retire at 75; equal representation is accorded each of the countrys main regions. One-third indirectly elected every 3 years; senators are chosen by popularly elected electoral colleges in each department, the number of seats based on department population; election by majority in departments with 4 senators or less, by proportional representation in departments with 5 or more senators. Appointed by the 16 Lander (state) governments; terms are not xed, but depend on the ofce-holding of the state governments. 49 elected indirectly by functional or occupational groups, 11 appointed by the prime minister. 315 directly elected; 9 appointed by the President of the Republic, 2 ex-ofcio members (former Presidents); majority vote for 75% of the seats, proportional representation for 25%. Half directly elected every 3 years, 152 from the prefectures and 200 from the country at large. Chosen by members of provincial councils. 208 elected directly from 52 multimember constituencies in the provinces, Ceuta, and Melilla; 49 indirectly elected by the legislative assembly of the 7 autonomous communities.

Belgium

71

No

Canada

104

Life

No

France

321

No

Germany

69

Varies

No

Ireland Italy

60 326

5 5

Yes Yes

Japan Netherlands Spain

252 75 257

6 4 4

Yes Yes No

(Table continued )

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APPENDIX CONTINUED

215

Country Switzerland United Kingdom United States

Size 46 697 100

Term (years) 4 Life 6

Congruence No No No

Mode of Selection (Method of Election) Two members directly elected from each of 20 cantons; 1 member elected from each of 6 half cantons. 92 hereditary peers; 579 life peers; 26 clergy. Two senators elected in each of the 50 states by direct popular vote; one-third elected every two years.

Sources: S.C. Patterson and A. Mughan, Fundamentals of Institutional Design: The Functions and Powers of Parliamentary Second Chambers, The Journal of Legislative Studies, 7/1 (2001), pp.3960; G. Tsebelis and J. Money, Bicameralism (Cambridge: Cambridge University Press, 1997).