Institutions, Interest Groups, and Political Conflicts

Many analyses of the relationship between political institutions and political decision-making are concerned exclusively with formal institutions, concentrating on the distribution of de jure power in the political system and ignoring the distribution of de facto power in society. But as the strong popular reactions to fiscal austerity during the European debt crisis have recently shown, contemporary conflicts over public policy are often resolved in the streets, not in legislatures or government offices. It is increasingly important for political scientists to understand the logic of political conflicts between governments on the one hand and interest groups and other civil-society organizations on the other. This chapter argues that the distribution of de facto power in society matters greatly to the relationship between political institutions and reform capacity. Where political agents have negligible de facto power, reform capacity is typically higher under single-party governments, just as standard models of institutions and political decision-making would predict. Where political agents have significant de facto power, however, sharing de jure power among several political parties often leads to higher reform capacity than concentrating power in a single-party government.