Windows of Opportunity: Legislative Fragmentation Conditions the Effect of Partisanship on Deregulation

Abstract

Previous research on deregulation in industrialized countries emphasizes differences between left-wing and right-wing parties, but data on product market regulation (PMR) indicate that these differences have been mostly modest. If partisan preferences on the merits of deregulation differ sharply, why such modest differences? We argue that partisan differences only become pronounced when the government is strong and rules a relatively unified legislature. Thus, legislative fragmentation should reduce the left-right difference in deregulation. We test this theory against PMR data in 29 industrialized countries, 1978-2007. We find that right-wing governments only have a strong negative effect on regulation if the legislature and the government are not fragmented. These findings can account for trajectories in several salient cases, from Thatcher's Great Britain to the Scandinavian welfare states, and they show how political institutions mediate the effect of partisanship through changes in opportunity structures.