In this paper we consider a dynamic model of government formation and termination in parliamentary democracies. Our analysis accounts for the following observed phenomena: (1) Cabinet reshuffles; (2) Cabinet replacements; (3) Early elections; (4) Surplus governments; (5) Minority governments;...

Theories in political economy depend critically on assumptions about motivations of politicians. Our analysis starts from the premise that politicians, like other economic agents, are rational individuals who make career decisions by comparing the expected returns of alternative choices. The...