Hanging Liberals

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The Lib Dems have apparently been exploring game theory as a way of determining a negotiation strategy following a potential hung Parliament.

There are, in my opinion, three major exogenous variables that will determine the costs and benefits of various strategies that the Libs would have to choose between: Firstly, the relative number of votes each Party wins at the next election; secondly, the number of seats that each Party wins and thirdly the economic prospects following 2010. I think electoral arithmetic precludes the possibility of the Tories winning more seats than Labour from fewer votes so that leaves 6 distinct hung-Parliament possibilities:

1) Tories out-poll Labour, winning more seats but short of an overall majority. The economic outlook is benign.

Dominant strategy for Lib Dems: SUPPORT CONSERVATIVE GOVERNMENT. The Tories would have a reasonable mandate to form a non-Labour government and popularity arising from an economic upswing would rub off on the Libs.

Tory response: Would be inclined to accept. Cameron would not want to face another election later in the year and would welcome the stability that a coalition would bring. Would not give much away though – Cameron would hold all the aces.

2) Tories out-poll Labour but Labour win a plurality (but not majority) of seats. The economic outlook is benign.

Dominant strategy for Lib Dems: SUPPORT CONSERVATIVE GOVERNMENT. The Tories would claim to have a moral mandate to form a Government, with only the vagaries of our electoral system denying them the most seats. Again, an economic upturn should benefit a junior partner of a governing coalition.

Tory response: Would have to accept. A benign economic prognosis could embolden a minority Labour Government and they would look scared of power if they declined to take it. The Lib Dems could probably demand PR in return.

3) Labour out-polls Tories and wins more seats. The economic outlook is benign.

Dominant strategy for Lib Dems: SUPPORT LABOUR GOVERNMENT. The scenario would imply that Gordon Brown was receiving credit for his handling of the economic crisis and his approach was bearing fruit. The Lib Dems would lose any progressive credibility if they tried to replace the Government with a Conservative one.

Labour response: Would accept. If not, the Lib Dems would always be prone to opportunistically bringing down the Government.

4) Tories out-poll Labour, winning more seats but short of an overall majority. The economic outlook is malign.

Dominant strategy for Lib Dems: MAINTAIN EQUIDISTANCE. There would be a serious risk of a new Conservative Government courting unpopularity (at least initially) as there does not appear to be an economic quick-fix. The best the Libs could do would be to refuse coalition with either main Party and adopt a ‘I told you so’ approach to any economic policy emanating from the new Government.

5) Tories out-poll Labour but Labour win a plurality (but not majority) of seats. The economic outlook is malign.

Dominant strategy for Lib Dems: MAINTAIN EQUIDISTANCE. Again, power would not be desired and certainly not a coalition with Tories which would look democratically dubious. Similarly there is no way that the Libs could prop up Labour in these circumstances.

6) Labour out-polls Tories and wins more seats. The economic outlook is malign.

Dominant strategy for Lib Dems: MAINTAIN EQUIDISTANCE. A coalition with the Tories would be unthinkable (it would smack of a stitch-up and would lose credibility with Guardian letter-writers). Sharing power with Labour undesirable due to the economic outlook.

What do people think?

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7 Responses to “Hanging Liberals”

  1. Captain Jako Says:

    Should 3) read ‘but not a majority’?

  2. Captain Jako Says:

    EPE, it would be interesting to know your thoughts on the tensions within the Lib Dems between the ‘SDP’ and the ‘Liberal’ wings and how these scenarios would influence those internal Lib Dem tendencies. Do you think a period of minority governments with the Lib Dems potentially moving into a kingmaker position could exacerbate those tensions?

  3. electionsproduceerections Says:

    Without any movement towads PR, a period of minority governments will hinder rather than help the Lib Dems. It will force the British public into choosing between Labour and the Tories more explicitly than they do at the moment

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