Guidelines for a Democratic Financial System
In a Multi-Party System Party discipline should keep representatives on track and it is understood that the political party will probably vote according to the preferences of its members; this can lead to a situation where the winner “takes all”. If the governing party has a clear and large majority the preferences of the minorities are oſten ignored.
Tis can result in a situation where power shiſts from the voter, not just to the representative but to the party itself. Tis, of course, is a pity as very oſten national issues are ignored for the sake of party political need satisfaction. Most countries hope for a strong opposition which will be able to challenge the ruling party on all important issues.
Where No Political Party Holds the Majority Here the situation can change completely. Let us assume there is a multi-party system in a given country with three political parties. But instead of one party having a clear majority aſter a general election, two of them are more or less equally represented. In fact the representation in Parliament of the third party is larger than the difference of the representation between the two larger parties – see example. Te third party, therefore, holds the balance of power in this situation. E.g.: party A = 48% party B = 42% party C = 10%
In the example above there is no clear majority. Neither party A nor party B have a majority. Party C, therefore, holds the balance of power. In order for party A or party B to have the majority in Parliament, they have to seek an agreement with party C.
Tis is called a coalition. Tis is because the vote of party C is larger than the difference between party A and party B. Tere is therefore a compromise and only through this coalition can more voters’ preferences and needs be satisfied. For example should party B seek a coalition with party C, they will together have 52% of the representation, which is a clear majority.
Case Study: The UK An example of this is the United Kingdom during its 2010 elections. None of the parties achieved the 326 seats needed for majority. Te Conservatives (or Tories as they are commonly known) achieved the most votes with 36.1% of the vote, but were still 20 seats short of beating the labour party with 29.0% (who were currently the ruling party under Prime Minister Gordon Brown). Te result was a hung Parliament where no party achieved the required majority, and the Conservatives were forced to side with the Liberal Democrats who achieved 23% of the vote. Together therefore the Conservatives and the Liberal Democrats gained 59.1% of the vote, enough to achieve the required majority. Because this could obviously result in tension between two parties with different policies, a coalition agreement had to be formed to agree on the policies of the coalition, detailing the policies of the joint parties. Since the election, the popularity of the Liberal Democrats has suffered as they have been seen to have compromised too much, become too conservative.
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