On June 15-16 2017 HHL hosted the 4th Workshop on Cooperative Game Theory in Business Practice. I gave a presentation on the conditional Shapley value (joint work with Andre’ Casajus), starting around 27:00 in the video below.
North Macedonia seems to be approaching a significant milestone defining further development of the country: as the talks about EU accession stall, its prime minister, Zoran Zaev from the Social Democratic Union of Macedonia (SDSM), resigns allowing the future of the country to be decided in the snap elections on April 12th. Meanwhile, the EU talks complications give rise to the right-wing powers within the country.
According to the polls dated Novermber-December 2019, social-democratic SDSM and center-right to right-wing Internal Macedonian Revolutionary Organization – Democratic Party for Macedonian National Unity (VMRO-DPMNE) are the leading political forces in North Macedonia. At the same time, the Albanian minority interests Democratic Union for Integration (DUI), the junior partner in the current SDSM-led coalition, refuses to exclude the possibility of coalition with VMRO-DPMNE in hopes to achieve a kingmaker status in the coming government formation process. The Left (Levica) criticizes both major parties (SDSM and VMRO-DPMNE) and rules out cooperation with them. Based on these constraints and the current polls, we present our forecast of government formation in North Macedonia:
With the considered level of electoral support of the political parties, the most stable (the most likely) government formation scenario implies an SDSM-led government in coalition with smaller players: Albanian minority parties Besa Movement (Besa), Alliance for Albanians (AA), the Democratic Party of Albanians (DPA), conservative Democratic Alternative (DA) and other smaller parties. In this scenario SDSM is able to avoid the need for cooperation with DUI or with less likely VMRO-DPMNE, however, the feasibility of this coalition depends on the actual elections outcome (whether the smaller players can secure enough parliamentary seats). Second most stable scenario involves VMRO-DPMNE, DUI and AA.
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With general elections in Ireland approaching rapidly (February 8th, 2020), the uncertainty increases, as none of the political parties has a definite potential to lead the new government. According to the January seat projection provided by RTÉ, neither of the two major Irish parties, Fine Gael (FG) or Fianna Fáil (FF), both liberal-conservative, have a strong advantage in forming the new cabinet. FG, which has secured the post of Taoiseach, the head of government in Ireland, in the two last election cycles, is losing support, while the left-wing Irish republican Sinn Féin (SF) has gained ground.
Since the 1930s either FG or FF has been leading the Irish government in cooperation with minor coalition partners. For now, FF has the strongest results in terms of the projected seats, but FG follows closely, which means that either still have a chance to secure the Taoiseach post depending on the election results. Even though none of these two parties demonstrates a clear advantage in this election cycle, they still rule out cooperation with SF. Based on this constraint, we present our forecast of the outcome of the government formation process in Ireland.
The most stable coalition scenario implies a government led by FF in coalition with the Green, Labour and other smaller parties and independent candidates. The other scenario that might be realized is a coalition of FF and FG, which in the case of Ireland, where these two parties have never governed together, could mean a minority government led by FF and supported by FG.
A further opportunity for either FF or FG could lie in the revision of the commitment to not cooperate with SF, however, at this moment none of the key parties seem to be ready to resort to it.
Update (February 11th, 2020)
After the great success in the elections left-wing Sinn Féin (SF), who secured 37 seats (only one seat below the largest party Fianna Fáil (FF)), has the chance to form the new government. The potential coalition includes Green Party (GP) and independent MPs in combination with two parties out of Social Democrats (SD), Labour Party (LP), or Solidarity-People Before Profit (SPBP). While SF is expected to secure the prime-minister seat, most of the other ministries are projected to be distributed among its coalition partners.
Our analysis shows that coalition formation scenarios involving FF or Fine Gael (FG) are also plausible, but less stable.
Slovak parliamentary elections are scheduled for February 29, 2020 and might bring significant shifts in the government coalition, which is currently led by Direction – Social Democracy (Smer-SD) and includes the right Slovak National Party (SNS) and hungarian minority party Most-Hid (MH). The positions of the parties in power have been significantly weakened by the two major events that took place in the recent years: the murder of investigative journalist Ján Kuciak and his fiancée resulting in massive anti-government protests, and Zuzana Čaputová, the opposition candidate from the Progressive Slovakia party (PS), winning presidential elections in March of 2019.
Moreover, the 4 four opposition parties, the liberal Freedom and Solidarity (SaS), the Christian Democratic Movement (KDH), the Progressive Slovakia-Together coalition (PS+SPOLU) and the centrist For the People party (ZL), have started cooperating and joined a non-aggression pact. Participation in the pact implies that cooperation with the current government coalition is excluded and the parties declare their intentions to find common ground in policy-related issues.
Another constraint in coalition formation concerns the ultra-right People’s Party – Our Slovakia (LSNS): nearly all other parties exclude the opportunity to cooperate with it within one government coalition. Based on these constraints and the poll data provided by Focus-Research dated 10-14th of January, we present our forecast of government formation in Slovakia after the parliamentary elections in 2020.
Based on the information available at this moment, we do not see much opportunity for the current government coalition to stay in power. This time the 4 opposition parties, SaS, KDH, PS+SPOLU and ZL, have a chance to form a government. However, to obtain the majority in parliament, they would still need to secure support of other parties, the center-right Ordinary People and right-oriented We are Family parties. Under this scenario, the Progressive Slovakia-Together coalition has potential to lead the new government, taking into account its recent success in the presidential elections. As for the power distribution, we expect it to be very egalitarian, as all six parties are needed to form the parliamentary majority.
Finland has seen significant growth in the number of political parties in recent decades. The fact that there is no threshold for electoral support for a party to enter the Finnish parliament allows even smaller players to achieve representation. These factors have resulted in a highly diverse landscape of political parties in the parliament, both in terms of their size and outlook, making coalition formation a potentially complicated process.
The governing coalition parties, namely: the Centre Party (KESK / ALDE), National Coalition Party (NCP / EPP) and Blue Reform (SIN), have seen a recent decline in support. By contrast, the Social Democratic Party (SDP / S&D) is expected to become the largest party with the upcoming April 14 election. However, building a purely left-wing coalition does not seem feasible: SDP, the Green League (VIHR / Greens/EFA) and the Left Alliance (VAS / GUE/NGL) are not expected to receive enough votes to secure a majority in parliament, indicating that probably a wider coalition will be necessary to build the new government.
Considering the willingness of the players to cooperate, it is worth mentioning that all the leading parties have renounced the opportunity to work in a coalition with Finns Party (PS / ECR), due to their pronounced right-wing and anti-immigration stance. The parties that do not see a possibility for such a coalition are KESK, NCP, SDP, and VIHR. Taking into account this information we arrive at the following forecast:
Two scenarios appear most stable. Both include NCP as the leader of the new government, securing the seat of the prime minister and 3 other ministries seats. These coalitions also include VAS, Swedish People’s Party of Finland (SFP / ALDE), and KD with 3, 2, and 2 ministries respectively. Either KESK or VIHR is required to complement the governing coalition – one of these parties is expected to receive 6 ministry posts.
However, the predicted scenarios include coalitions with a highly diverse political outlook, and in some cases with dubious political viability. We, therefore, add further constraints and assume that strong left and right views cannot be allowed within one coalition. The result is the following:
The most stable coalition is now led by SDP and includes NCP, VAS and SIN. SDP is expected to secure the seat of the prime minister and 6 other ministries, while NCP, VAS, and SIN would receive 8, 1, and 1 ministries respectively. As left-wing parties would not receive enough support for a majority in parliament, SDP needs to include center-right NCP and SIN in the coalition.
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The latest parliamentary elections in Latvia took place on the 6th of October this year. Up until now the parties which managed to pass the threshold of 5% of the electoral votes and get into parliament are negotiating the structure of the new government. The Baltic country is torn between the Western and Eastern worlds; it is seeing the rise of nationalist and populist views. How will the future policies of Latvia look like?
The political landscape of Latvia is very dynamic: two of the parties represented in the parliament elected in 2014, For Latvia from the Heart (No sirds Latvijai) and the Latvian Association of Regions (Latvijas Reģionu apvienība), could not enter the new parliament in 2018, with the former not running for the elections and the latter falling behind the 5% threshold. At the same time three new political forces, New Conservative Party (Jaunā konservatīvā partija / JKP), liberal Movement For! (Kustība Par! / Par) and right-leaning Who owns the state? (Kam pieder valsts?/ KPV), won a higher support than any of the parties from the current governing coalition.
At the same time, the status of the parties that steadily participate in the political process has undergone significant changes. Unity (Vienotība / JV), the party that was empowered to form the government after 2014 elections, has lost electoral support considerably and showed the lowest results among parties that managed to secure seats in the new parliament of 2018. The Union of Greens and Farmers (Zaļo unZemnieku Savienība / ZZS) also suffers from a lack of trust: it was a member of the governing coalitions in most of the previously negotiated governments and is seen as being too flexible in choosing political allies, as well as blamed for corruption and inefficiency. The National Alliance (Nacionālāapvienība/ NA) and the pro-Russian Harmony (Saskaņa) have also lost a number of seats in parliament.
Furthermore, Saskana is not considered “coalitionable” by several other parties due to its pro-Russian stance. Well before the election, NA declared that it “will never support or join a government that involves” Harmony. The same is expected from JV and the JKP, which have many times publicly denounced the possibility of a coalition with Saskana.
Currently, the parties are negotiating the structure and the head of the Latvian Cabinet of Ministers, with members of the JKP and KPV being the major candidates for the Prime Minister post. Based on the outcomes from the October election, and on the public commitments mentioned above, our analysis produces the following results.
Observe that all minimal winning coalitions (those that reach a majority with no redundant members) involve 4 partners, and must include both JKP and KPV.
Furthermore, the most stable coalitions (according to the conditional Shapley value) in addition to JKP and KPV include either Par or ZZS (but not both), and either NA or JV (but not both).
If we based our forecast solely on the information available at the time of the election we could then conclude that either JKP or KPV is expected to lead the formation of the new government. Of those two parties, one would likely secure the prime minister seat (in our calculation we assume its worth to be roughly equivalent to 1/3 of the other ministerial seats) and three ministerial seats, with the other obtaining seven seats. Either NA or JV is expected to receive approximately two ministerial seats. Finally, Par or ZZS may expect to secure one seat.
It is worth mentioning that this type of power distribution would make it unlikely that Par could be interested in joining the coalition. The party has secured a notable level of electoral support and most likely would not be willing to invest its political capital in a government with such little level of influence. Therefore, based on the information at the time of the election the most likely governing coalition would appear to consist of JKP, KPV, ZZS, and either NA or JV depending on the negotiated agreement.
After the election, as the negotiation process among the Latvian parties started to unfold, several further public commitments (often falling short of official party policy) were made. In particular, several KPV representatives have publicly stated that they will not support a coalition with Saskana. Furthermore, KPV and JKP have signaled their reluctance to form a coalition with ZZS, blaming it for the shortcomings of the “old” political establishment.
If we also include those post-election announcements in our analysis, we obtain the following results.
Observe that now there are just three minimal winning coalitions (none of them involving ZZS), and they all appear equally stable.
In all three of those possible coalitions JKP and KPV are expected to receive an equal share of power, with one of them obtaining the prime minister seat and two additional seats, and the other securing six seats.
The remaining two coalition partners (chosen among NA, Par, and JV) are expected to share the remaining five ministerial seats.
Among the three predicted coalitions we consider the one composed of JKP, KPV, NA, and JV as politically most viable, as the parties included are closer to each other in terms of their overall agenda. By contrast, any coalition that includes both JKP and Par would likely carry higher internal tensions within the governing coalition.
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