THE POTENTIAL FOR POLICY CHANGE UNDER TWO-DIMENSIONAL GOVERNMENT POLARISATION

Abstract

Governments make less policy changes when there are larger ideological distances between government parties. This is a foundational claim of veto player theory which is supported by the results of several empirical studies. The relationship between government polarisation and the ability for policy change has however not been assessed with a two-dimensional measure of government polarisation, even though political competition in Europe is increasingly two- dimensional. To address this research gap, this thesis examines how government polarisation on both an economic and a cultural dimension affects the degree of change in budget allocation. Analysing governments in 25 European countries between 1999 and 2024, this study finds that there is no effect of government polarisation on changes in budget allocation. This result holds both for the separate effects of economic and cultural polarisation and changes in corresponding areas, as well as for the effect of general left-right and two-dimensional polarisation on changes in all spending categories. These findings contradict the results of previous studies, thereby calling into question whether the theoretical claims of veto player theory are still valid during the most recent decades. While two-dimensional government polarisation did not matter for changes in budget allocation, the descriptive results show that governments are differently polarised on the economic and the cultural dimension. A two-dimensional conceptualisation of political competition thus has the potential to improve our understanding of other government- related outcomes.