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Institutional factors affecting party systems in new democracies: endogenous or exogenous predictors?

A major criticism of studies using the institutionalist approach to explain party systems' characteristics in new democracies is the endogeneity argument. This is that parties design the surrounding institutional context and hence that context cannot be assumed to affect the same party system that devised it. Using a sample of 31 new democracies, this article challenges this argument both qualitatively and quantitatively. The central assumption is that even if politicians/parties are driven during periods of institutional design by selfish, vote-maximizing tendencies, it is still very difficult for them to design electoral institutions that guarantee their subsequent electoral victory. Three justifications for the argument are developed. First, absence of reliable information on how different institutional frameworks would interact with the electoral strengths and weaknesses of one's party means that the knowledge necessary to pick the most favourable electoral institutions in the first years of transitions is rarely available. Second, decision-making processes at periods of institutional design are also shown to result in compromises between participating parties which prevent any single party from attaining all of its objectives. Finally, it is shown empirically that many parties that were significant during periods of institutional design suffered electorally under the same institutional settings that they presumably helped to design.