Abstract

While scholars agree that the stability of the party system is imperative for the proper functioning of democracy many note the high number of political parties in new democracies, yet we still lack a systematic comparative analysis of party system development in such states. A possible reason for this is that extant theories on the number of parties were written with established democracies in mind and are thus unequipped to explain the  dynamics taking place in young democracies. In attempting to fill this gap, I propose that learning the effect of institutions is crucial to whether they actually have an effect or not and is integral to understanding the number of parties that exist in any given system. Looking beyond district magnitude alone I propose that other institutional arrangements play important roles in determining the number of parties. In particular, I argue that democratic experience and pre-electoral party regulations shape the party systems that ensue. I test these propositions on district data of 20 European democracies using a hierarchical model technique. The results show that at the district level the number of parties decreases with subsequent elections and comes closer to the theoretically predicted equilibrium and the effect is more pronounced in young democracies. Further, the results reveal that pre-electoral constraints such as signature and deposit requirements for political parties wishing to compete have a significant negative effect on the number of parties, while in the presence of EU-related events we observe a rise in the number of parties likely due to the additional incentives for political competition that such events bring. A final interesting finding, which counters our intuition, is that public funding
proves to have no significant effect on the number of political contestants.