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February 11, 2009

Israeli Election: How Winning Can Backfire

This week’s Israel’s general election produced a small surprise. The ruling centrist party Kadima edged the right wing Likud party by a small margin, despite polls predicting a Likud win. Under Israeli constitutional law, it is usually the largest party that gets a first crack at building a coalition and holding the Prime Minister position. Kadima therefore claims that its leader Tsipi Livni should be granted the first opportunity to build a coalition.

Upon first reflection, this result suggests that the government-to-be would be less committed to right wing ideology than had the results been otherwise and the Likud had won. Surely, its plurality victory gives Kadima a better chance of forming a coalition than it would otherwise stand. But the irony is that because of Kadima’s victory, and despite the fact that a centrist party rather than a right-wing party received the most votes, it is now more likely that Israel will end up having a more extreme right wing government. Here is why.

In the 120-member Knesset (parliament), Kadima will have 28 seats and Likud 27. The more extreme right wing and religious parties have a combined 38 seats; the parties more left of Kadima (including Labor, 13) have 27 seats. To establish a coalition, the ruling party needs to assemble support of at least 61 members.

With Kadima's claim to primacy, the right wing bloc has been quickly cementing, with 65 members, to oppose a Kadima government. The uniting theme for this bloc is its preference to have Benjamin Netanyahu as the Prime Minister and the Likud party as the coalition leader, and leave outside the government the moderate voices of Labor and perhaps even Kadima. The Likud needs the extreme right wing parties to join forces in blocking Kadima's attempt to form a coalition. In return, the right wing parties will demand participation if and when the Likud forms a government.

What would have happened had the results been reversed, with the Likud receiving a 28-to-27 edge over Kadima? Then, according to the constitutional tradition, the Likud would have naturally been entitled to the first try at establishing a coalition. True, it could still turn to the extreme right wing parties as its potential coalitional allies. But it would not have to. Indeed, pre-election rhetoric indicated that the preference of the contenders, including the Likud, was to establish a "balanced" coalition that includes Likud-Kadima-Labor (68 seats combined). That is, instead of creating a coalition with all the parties to its right, the Likud would have had the choice of creating a coalition that includes the parties to its left. At the very least, the option to do so would have reduced the bargaining power of the extreme right wing parties and would have shifted the policies of the new Likud government more to the center. 

The reason that Kadima's slim victory could backfire, as this script envisions, is that a plurality victory in the Israeli system provides some advantage (the presumptive right to have the first try at building a coalition), but it does not guarantee that the plurality winner would prevail and succeed in forming a government. The runner up can still prevail and form the government, but only by forming a government with the parties furthest away from the center. 

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If a windfall allows me, when combined with my initial wealth, to make an investment that ‎subsequently ‎turns sour, would it be appropriate to say that the windfall had “backfired”? I think not, ‎and the case of ‎the Israeli elections appears to be analogous.‎

Plurality winner or not, Kadima could have either conceded the elections (leading to a more centrist ‎Netanyahu government) or claimed victory for itself, giving up the benefits associated with such a government for the opportunity to participate in a gamble in which a Livni government is the outcome ‎of success and a right-wing Netanyahu government is the outcome of failure. The plurality victory ‎increased the probability of success, presumably enough to make the lottery option attractive. If ‎Kadima’s leaders now gamble and lose, they may in hindsight regret the electoral victory which made ‎the lottery option attractive. I would have similarly regretted the windfall ‎that made my investment ‎possible. In both cases, however, it would be more appropriate to “blame” the bad decision to gamble ‎or the bad luck that followed than to claim that the win(dfall) had “backfired”.‎

Kadima’s plurality victory would actually backfire if Likud’s preference for being the largest coalition ‎‎party outweighed its preference for a centrist coalition. If that were the case, Kadima would be ‎‎offered a place in a Likud-led coalition only if it received fewer votes than Likud. But this is rather ‎‎trivial: it is hardly surprising that “winning” may “backfire” when “losing” comes with its own special ‎prize.‎

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