Untitled

Informal Coalitions
and Policymaking
in Latin America
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DAVID MARES, General Editor
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Informal Coalitions and

Policymaking in Latin America
Ecuador in Comparative Perspective
Andrés Mejía Acosta
Informal Coalitions
and Policymaking
in Latin America
Ecuador in Comparative Perspective
Andrés Mejía Acosta
New York London

First published 2009
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Library of Congress Cataloging-in-Publication Data

Mejía Acosta, Andrés
Informal coalitions and policymaking in Latin America / by Andrés Mejía Acosta.
p. cm.—(Latin American studies. Social sciences and law)
Includes bibliographical references and index.
1. Ecuador—Politics and government—1984– 2. Coalition governments—Ecua-
dor. 3. Political planning—Ecuador. I. Title.
JL3031.M443 2009
320.609866—dc22
2008044862
ISBN 0-203-87898-1 Master e-book ISBN
ISBN10: 0-415-99354-7 (hbk)

ISBN10: 0-203-87898-1 (ebk)
ISBN13: 978-0-415-99354-8 (hbk)

ISBN13: 978-0-203-87898-9 (ebk)
Inmensa fé en la Victoria…
Contents
List of Figures xi
List of Tables xiii
Preface xv
Acknowledgments xix
Acronyms xxi
1 Pushing Reforms through the Eye of a Needle 1
2 A Proposed Model for Legislative Cooperation 23
3 Presidential Success in a Fragmented Legislature 42
4 Party Brokers and Voting Unity in the

Ecuadorian Congress 62
5 Voting at the Margins: Pivotal Players and

Coalition-Making 85
6 Ghost Coalitions in the Making of Economic Reforms 111
7 Ghost Coalitions, Institutional Change and Democratic

Accountability 134
Notes 147
Bibliography 155
Index 165
Figures
2.1 Size matters: legislative support and coalition payoffs. 30
3.1 Average presidential success rates in nine Latin American

legislatures (various years). 45
3.2 The legislative sequence in Ecuador. 49
3.3 Impact of constitutional (decree) powers on the likelihood of

policy change. Ecuadorian National Congress
(1979–2002). 55
3.4 Impact of the President’s coalition on the fate of economic

reforms, controlling for decree power. 56
3.5 Impact of the ideological distance between the president’s

ideological position and the mean legislator on policy
change controlling for decree power. 59
4.1 Average party unity by party ideology in Ecuador

(1980–2000). 73
5.1 Frequency distribution of party switching rates. National

Ecuadorian Congress (1979–2002). 91
5.2 Probability of voting with the president by district magnitude

and party size. Fiscal reform (May 2001). 103
5.3 Probability of voting with the president by legislators’

political careers: party switches and number of
reelections. Fiscal reform (May 2001). 105
5.4 Probability of voting with the president by party size and

party unity. Fiscal reform (May 2001). 107
6.1 Informal institutions as deviations from existing

model predictions. 114
xii Figures
6.2 Presidential net job approval ratings. Quito and Guayaquil.
(July 1988–March 2001). 116
6.3 Patterns of cabinet turnover (1979–2002). 121
6.4 Full of sound and fury? Threats vs. actual impeachment

proceedings (1979–1996). 126
7.1 The gray areas of coalition-making. 137

Tables
2.1 Formal and Informal Coalition Strategies Available

to Presidents 38
3.1 Likelihood of Approval for Presidential Initiatives of

Economic Reform in Ecuador (1979-2002) 53
4.1 A Cooperation Game for Policy Change 69
4.2 Party Unity Scores by Ideology and Vote Type in Ecuador

(1980–2000) 75
4.3 Regression Estimates for Voting with the President in

Ecuador (1980–2000) 78
5.1 Logit Estimates in Ecuador for Explaining the Number of

Party Switches (1979–2002) 95
5.2 Frequency and Direction of Party Defections with Respect

to the Government Party (1979–2002) 100
5.3 Individual Probability of Voting for Fiscal Reform,

Logit Estimates 104
5.4 Motivations of Pivotal Players to Cooperate with

the Government 109
6.1 Discretionary Coalition Payoffs Available to Ecuadorian

Presidents 119
Preface
Writing about Ecuadorian politics is like trying to tie shoelaces while

walking. In three decades since the start of the contemporary wave of
democracy in 1979, three Ecuadorian presidents have been illegally
ousted from office, two Constitutional Assemblies have produced new
political charters, an indigenous political movement has gained and lost
political office, and the political party system has effectively collapsed.
These events illustrate the country’s chronic inability to form, sustain and
enforce agreements around fundamental democratic principles. Given the
intensity, frequency and multiplicity of events, political dynamics have
escaped systematic scholarly attention. The permanent renewal of politi-
cal actors and institutional frameworks over time has hindered attempts
to understand political incentives, derive causal explanations or draw
from historical perspectives. To a large extent, the study of Ecuadorian
politics presents the challenge of understanding cooperation patterns in a
context of permanent political change.
The idea of studying policymaking in Ecuador originally emerged as
a straightforward way to systematically observe the dynamics of politi-
cal cooperation and conflict in a country that is almost exclusively known
by its contentious politics and chronic instability. The recurrent questions
asked throughout this study are: Why and when do policy actors choose to
cooperate with one another? What kind of agreements do they make? And,
who enforces such agreements?
To explore these questions, the book looks at the legislative approval of
economic reform initiatives during the contemporary democratic period in
Ecuador (1979–2004). The adoption of economic reforms offers an ideal
policy arena to explore conflict and cooperation for two reasons. In the
fi rst place, it focuses on the two most influential and representative politi-
cal agents, a president who represents the executive branch, and a highly
fragmented legislature. Unlike the actions of non-elected agents responsible
for managing economic policies, the actions of presidents and legislators
are directly accountable to and legitimized by the preferences of voters.
Thus, the legislative bargaining over economic reforms highlights the clas-
sic tension between a president who seeks to address national problems and
xvi Preface
a constituency-oriented legislature. To a large extent, this bargaining takes
place according to well-known rules in repeated interactions over time.
A second analytical advantage is that the policy agenda for the adoption
of economic reforms during the eighties and nineties is not the product of
idiosyncratic or partisan domestic preferences but was largely shaped by
external actors. Policy prescriptions were largely defi ned by “Washington
consensus” reforms sponsored by international fi nancial institutions (IFIs)
such as the International Monetary Fund and World Bank. These proposed
reforms conditioned Latin American governments to move away from the
predominant model of state-led economic planning in the seventies and
adopt adjustment policies and market-oriented reforms. It is assumed that
most governments, conservative or socialist, programmatic or populist,
were compelled to adopt stabilization and structural reforms if the country
was to benefit from fresh loans and new international investments. In this
sense, the book focuses on the political factors that enabled or hindered
presidents’ ability to form legislative coalitions for reform.
The extent to which Ecuadorian governments effectively adopted eco-
nomic reforms has been the object of a polarized debate, between those
who lament the institutional rigidities that prevented the adoption of more
ambitious reforms (Jácome 2004; Arteta and Hurtado 2002), and those
who have vehemently criticized the adoption of neoliberal reforms (Acosta
1994). From a political perspective, my claim is that there were important
windows of cooperation between minority presidents and opposition leg-
islators that enabled political agreements around key economic reforms
which prevented the hyperinflation crises that attacked other countries
during the eighties, liberalized markets during the nineties and protected
the country from economic collapse with the adoption of dollarization
reforms.1 These windows of cooperation were usually crafted around
informal practices and political exchanges that allowed policymakers to
cement reform coalitions while avoiding the liability derived from formal
power-sharing arrangements.
To explain the nature and dynamics of these informal agreements, I
relied on extensive quantitative information (some of it collected for the
fi rst time in Ecuador), including more than 5000 legislative initiatives
introduced to Congress, political profi les and career paths for approxi-
mately 1200 public officials (including cabinet members, legislators, and
provincial and municipal authorities), more than 12 years of bi-weekly
public opinion surveys, and nearly 50 roll call votes extracted and coded
for the fi rst time from congressional archives. To document the existing
gap between the formal rules of the game revealed through quantitative
data, and the informal bargaining strategies, I relied on extensive eth-
nographic research that included congressional hearings, media archival
research on several national and international newspapers and news ser-
vices, and dozens of interviews with policymakers in Ecuador, some of
whom asked to remain anonymous.
Preface xvii
Looking ahead, this book’s analysis of inter-branch cooperation offers
a unique opportunity to understand the evolution or erosion of democratic
institutions. The adoption of significant constitutional reforms between
1995 and 1998 marked the existence of two different policymaking episodes.
During the fi rst period (which began with the transition to democracy in
1979), informal legislative agreements did not produce durable agreements
around programmatic lines, but they offered functional solutions to com-
pensate for the president’s lack of legislative support and helped to avoid
policy deadlock situations. The second period (which ended with the general
election of 2006) is marked by an institutional effort to improve, not the
president’s ability to negotiate with opposition parties, but the president’s
ability to impose policy changes on a weakened legislature. While coop-
eration incentives were available to politicians for delivering constituency
services before 1995, reforms tied politicians’ ability to exchange coopera-
tion currencies and engage in constituency service. While the appointment
of control and oversight bodies was negotiated with coalition partners as
part of informal power-sharing agreements before 1998, these control and
oversight bodies became instruments of political blackmail in the hands of
disgruntled coalition partners afterwards. Paradoxically, the adoption of
governance reforms that disregarded existing cooperation dynamics pro-
voked a more confrontational environment after 1998. This “governance
paradox” is a critical factor that explains the ousting of three Ecuadorian
presidents from office in 1997, 2000, and 2005, and the subsequent col-
lapse of the traditional party system in 2006.
In the aftermath of the third presidential ousting, civil society groups
converged around the “Que se vayan todos!” (Everybody go home!) slo-
gan to vent their frustration with a highly contentious and ineffective
political elite. Not surprisingly, voters elected Rafael Correa, a confron-
tational political outsider who campaigned on an anti-party platform,
to be the next president of Ecuador in 2006. President Correa sponsored
the elaboration of a new constitutional text, which, ironically, continued
to centralize greater policymaking authority in the hands of the presi-
dent and at the expense of the legislature. As previous Ecuadorian and
Latin American experiences show, a higher concentration of power in the
executive branch has not been conducive to sustainable policy agreements
in the long run within democratic rules. To the contrary, an appeal to a
decisive and confrontational style of politics has generally strengthened
the cycle of authoritarianism and instability in the region.
Acknowledgments
I am indebted to many scholars, colleagues and friends whose contribu-

tion directly improved the quality of this work. My largest intellectual
debt is with Michael Coppedge, my academic mentor and friend who
devotedly supported the birth and development of this project at the
Department of Political Science at the University of Notre Dame (United
States). Guillermo O’Donnell, Scott Mainwaring, Frances Hagopian and
Andrew Gould at the Kellogg Institute for International Studies, Uni-
versity of Notre Dame, provided generous advice, encouragement, and
inspiration to sharpen my scholarly perspective. Maxwell Cameron at the
University of British Columbia (Canada), Mick Moore and the Institute of
Development Studies at the University of Sussex (United Kingdom), and
innumerable colleagues at the Kellogg Institute for International Studies
provided me with stimulating intellectual environments to continue and
complete this transatlantic scholarly journey.
There are many institutions that provided critical research funding for
the success of this project. The Helen Kellogg Institute for International
Studies and the Coca-Cola Company through its Project Latin America
2000 provided scholarship funding to pursue graduate studies and conduct
field research between 1997 and 2001. The Department of Government
(Political Science) at the University of Notre Dame, the Kellogg Institute,
the Tinker Foundation, and the Konrad Adenauer Foundation helped fund
field travel, data collection and research assistance in Ecuador between
2001 and 2003.
In Ecuador, many scholars, friends, public officials, and institutions
contributed to the project. Vicente Albornoz, Osvaldo Hurtado, Isabel
Proaño, Manfred Rabeneick, Michel Rowland, Alexandra Vela, Esteban
Vega, and Norman Wray at the Corporación de Estudios para el Desar-
rollo (CORDES), provided me with invaluable information, inspiration
and institutional support. Adrián Bonilla, Felipe Burbano, Fernando Car-
rión, Simón el Maestro Pachano, and colleagues and students at FLACSO-
Quito endured multiple presentations of my work and provided me with
valuable feedback and institutional support. Many other colleagues
shared important information, datasets and helped collect and clean large
xx Acknowledgments
amounts of data, including Santiago Basabe, Francisco Burbano, Patricio
Carrillo, Luis Miguel Chiriboga, Jaime Durán, Pedro Galarza, Fernando
Gallegos, Jose Antonio Guzmán, Camila Lanusse, Tatiana Larrea, Pau-
lina Larreátegui, Juan Carlos Machado, Patricia Marenghi, Emilio Mar-
quez, Michel Rowland, Alejandra Santillana, Omar Simon, and Rothman
Valdospinos. I am grateful to the dozens of public officials, legislators and
former presidents who agreed to be interviewed for this project and who
asked to remain anonymous.
Many thanks to the colleagues and friends who eagerly read drafts, pro-
vided extensive comments, or enriched the quality of this manuscript in
many different ways. For that, I am grateful to Vicente Albornoz, James
Alt, Manuel Alcántara, Caridad Araujo, Octavio Amorim Neto, Daniel
Brinks, Lesley Burns, Maxwell Cameron, John Carey, Fernando Carrillo,
Javier Corrales, Scott Desposato, James Druckman, Anabella España-
Nájera, Flavia Freidenberg, Gretchen Helmke, Catherine Hirbour, Boldizar
Janko, Mark Jones, Peter Kingstone, Fabrice Lehoucq, Steven Levistky,
Arthur Lupia, Eric Magar, Jamil Mahuad, David Mares, Juan Andres
Moraes, Scott Morgenstern, Simón Pachano, Carlos Pereira, Aníbal Pérez-
Liñán, Isabel Proaño, Pablo Policzer, Manfred Rabeneick, Mark Robin-
son, Sebastián Saiegh, Mitch Sanders, Mathew Shugart, Richard Snyder,
Ernesto Stein, Martín Tanaka, Michelle Taylor-Robinson, Michele Waslin,
and Kurt Weyland. Benjamin Holtzman and Jennifer Morrow at Routledge
offered patient editorial advice, and Caroline Martin and Birte Bromby
provided valuable editorial assistance.
This book is dedicated to my family, who has paved every turn of this
scholarly journey with their love, patience and encouragement. A special
dedication to our loved ones Constance and Fionna, who will keep us com-
pany even when they are no longer with us. Thanks to my parents, Jorge
and Cumandá, my brothers Santiago and Christian as well as Andrés,
Ximena, Abuelita Inés, and Carmen Morales for sharing your intense joy
for life from any corner of the world you happen to be in.
This book belongs to Jane and our two girls, Antonia and Elisa, for
patiently enduring my endless weekends of work during your summer holi-
days. The sound of your laughter reminded me of the important things in
life, and gave me the motivation to fi nish this book.
Brighton, UK, August 2008

Acronyms
AGD Agencia de Garantía de Depósito
BEDE Banco Ecuatoriano de Desarrollo
BNF Banco Nacional de Fomento
CFP Concentración de Fuerzas Populares
CID Coalición Institucionalista Democrática
CONAIE Confederación de Nacionalidades Indígenas del Ecuador
CONAM Consejo Nacional de Modernización
CONATEL Consejo Nacional de Telecomunicaciones
CORDES Corporación de Estudios para el Desarrollo
CSJ Corte Suprema de Justicia
EMETEL Empresa Estatal de Telecomunicaciones
FADI Frente Amplio de Izquierda
FEIREP Fondo de Estabilización, Inversión, y Reducción

del Endeudamiento Publico
FNV Federación Nacional Velasquista
FRA Frente Radical Alfarista
IADB Inter American Development Bank
ICC Impuesto a la Circulación de Capitales
ID Izquierda Democrática
IESS Instituto Ecuatoriano de Seguridad Social

xxii Acronyms
IETEL Instituto Ecuatoriano de Telecomunicaciones
IMF International Monetary Fund
INECEL Instituto Ecuatoriano de Electrificación
MIN Movimiento de Integración Nacional
MPD Movimiento Popular Democrático
MPS Movimiento Patria Solidaria
MSC Movimiento Social Cristiano
PC Partido Conservador
PCD Pueblo, Cambio y Democracia
PCE Partido Conservador Ecuatoriano
PCK Movimiento de Unidad Plurinacional Pachakutik
PD Partido Demócrata
PETROECUADOR Empresa Estatal Petróleos del Ecuador
PLRE Partido Liberal Radical Ecuatoriano
PNR Partido Nacionalista Revolucionario
PRE Partido Roldosista Ecuatoriano
PRIAN Partido Renovador Institucional de Acción Nacional
PSC Partido Social Cristiano
PSE Partido Socialista Ecuatoriano
PSP Partido Sociedad Patriótica
PUR Partido Unidad Republicana
RIFLE Reglamento Interno de la Función

Legislativa del Ecuador
TC/TGC Tribunal Constitucional/ Tribunal de Garantías

Constitucionales
TSE Tribunal Supremo Electoral
UDC-DP Unión Demócrata Cristiana - Democracia

Popular
1 Pushing Reforms Through
the Eye of a Needle
In Latin America, the adoption of market-oriented reforms has been a

source of anxiety for voters, a permanent challenge for politicians and an
inevitable mandate from international fi nancial institutions. The term of
market-oriented reforms refers to a set of measures that aim at reducing
the role of the state in the economy by lowering trade tariffs, eliminating
government subsidies, enacting privatizations, facilitating foreign invest-
ment, loosening labor laws, and promoting other banking and fi nancial
reforms (Lora 1997; Morley et al. 1999; Weyland 2002).1 Market-oriented
reforms sought to effectively reduce the role of the state in economic plan-
ning by eliminating the state-led import-substitution industrialization (ISI)
model followed by Latin American economies during the sixties and seven-
ties (Williamson 1990, Haggard and Kaufman 1995, Grindle and Thoumi
1993). The new “Washington consensus” type of policy recommendations
included two stages of reform. The fi rst were stabilization or adjustment
policies, aimed at achieving and maintaining macroeconomic equilibrium
including fiscal balances, inflation, and debt management. The second were
structural reforms intended to reshape political and economic institutions
in the long run, including privatization processes, central bank autonomy,
civil service reform and other long-term tax and fiscal reforms (Haggard
and Kaufman 1995; Lora and Panizza 2002).
Market-oriented reforms promised to bring sustainable growth, improve
wealth redistribution and close social inequalities for Latin Americans.
Governments throughout the region received the mandate from interna-
tional fi nancial institutions to promote drastic stabilization and adjust-
ment policies at home if they were to gain access to fresh lines of credit.
But cementing the necessary political support behind these reforms proved
to be a painful and elusive task, especially in countries that had recently
moved away from military rule and adopted democratic institutions. Ask-
ing citizens to bear austerity measures was a costly political decision, since
democratic governments had promised greater economic and social inclu-
sion to marginalized political actors.
After two decades of intermittent reform attempts in Latin America, many
were tempted to conclude that the process of democratic consolidation was
2 Informal Coalitions and Policymaking in Latin America
incompatible with greater economic stability and enhanced welfare for all.
A more systematic review of state reforms, however, suggests that the region
experienced a “silent revolution,” given the scope and depth of reforms pro-
duced since the early eighties. According to Lora, not only significant reforms
were achieved regarding democratization, stabilization and trade liberaliza-
tion, but these reforms took place under the most diverse social, economic
and political circumstances (Lora 2007). While ambitious economic reforms
were swiftly adopted by decisive political leaders in Argentina, Bolivia and
Peru, more gradual reforms were adopted with the intervention of multiple
political actors in Colombia, Chile or Costa Rica. While significant reforms
were largely adopted in the context of a hegemonic party system in Mexico, in
Brazil reforms were achieved with the participation of multiple political par-
ties. Evidently, part of the success and quality of resulting policies depended
on the technical composition of policy recipes. Yet, the nature of the politi-
cal process itself influenced the extent to which these policies became stable,
adaptable, coherent and oriented to serve the public interest (Lora 2007; Stein
et al. 2005).
Why were some countries able to craft reform coalitions while others
could not? Did the presence of multiple actors in the policy process enable
or constrain reform prospects? Why were some reform coalitions sustain-
able over time whereas others only produced short-term deals?
THE PUZZLE: MUDDLING THROUGH REFORMS
This book explores the challenges of crafting reform coalitions in a conten-

tious presidential democracy: Ecuador. This oil-rich democracy presents a
unique puzzle. Although the country is far from being a star performer in
Latin America, successive governments managed to adopt significant eco-
nomic reforms and other policy changes despite having one of the most
conflictive and volatile democracies in the region. For the most part of its
democratic period, Ecuadorian governments were able to control or com-
pletely avoid the economic nightmares that plagued other Latin Ameri-
can democracies such as spiraling fiscal deficits, large unemployment or
hyperinflation (Grindle and Thoumi 1993). Ecuadorian governments, from
left to right, adopted a wide range of “modernization reforms”, such as
fi nancial, trade and banking liberalization laws (Hey and Klak 1999; De la
Torre et al. 2001). Over time, citizens and policymakers developed a policy
convergence about the need to reduce government spending, and gradually
supported reforms to increase tax collection, and adopt some fiscal disci-
pline and labor reforms (Grindle and Thoumi 1993; Hey and Klak 1999).
Economic analysts have correctly voiced frustration with the institutional
rigidities that limited the adoption of more ambitious reforms in Ecuador
(Araujo 1998; Jácome 2004; Arteta and Hurtado 2002). But from a political
perspective, it is rather surprising to see that reforms were adopted through
Pushing Reforms Through the Eye of a Needle 3
the democratic policy process. By the mid-nineties, Ecuador’s economic
liberalization process was ranked slightly below the average according to
ECLAC’s Index of Structural Reform developed for 17 Latin American
countries (Lora and Panizza 2002; Morley et al. 1999). The Index reflects
the degree of economic liberalization according to commercial, fi nancial,
capital accounts, privatization and tax reforms between 1970 and 1995.
In a scale that goes from 0 (complete state intervention in those policy
areas) to 1 (economic liberalization), Ecuador’s general reform index up to
1995 is .80, only slightly below the regional average of 0.82. The regional
comparison confi rms that Ecuador achieved some policy success despite its
contentious political environment. Grindle and Thoumi summarized the
making of reform coalitions in Ecuador as a process of “muddling towards
adjustment” in which confl icting political and economic views over policy-
making alternatives did not defeat efforts to adjust, but delayed its imple-
mentation and limited its success (1993: 124). How were reform initiatives
approved in such a contentious environment?
Policymaking in a Fragmented Environment

The adoption of market-oriented economic reforms is an especially dif-
ficult task in a democracy characterized by important regional, ethnic
and political cleavages. The veto players’ framework is a useful entry
point to analyze the political institutional challenges of adopting policy
reforms. Veto players are defi ned as individual or collective actors whose
agreement is necessary to produce policy changes (Tsebelis 2002). All
things equal, policy change is facilitated by the reduction in the number
of available veto players or by the convergence of their ideological prefer-
ences. Conversely, multiple veto players would obstruct the space for pol-
icy reforms because they can limit the range of acceptable policy options
available (Ames 2001; Pachano 2004) or they can elevate the transaction
costs for their approval (Mainwaring 1999). The Ecuadorian policymak-
ing process is characterized by the presence of multiple policy players
(Conaghan 1995) that have significant regional, ethnic and ideologi-
cal differences (Pachano 2006; Jones and Mainwaring 2003). Regional
rivalries mainly between the Coastal and Andean provinces have been a
permanent feature of Ecuadorian politics even before the foundation of
the Republic in 1830 (Martz 1972; Hurtado 1990). While Andean elites
were inwardly bound to supply the needs of the domestic market through
a semi-colonial Hacienda system, Coastal elites reflected a long-standing
export-oriented tradition, lobbying the central government for a “pro-
tected opening” of the economy that included favorable exchange rates,
price subsidies, trade barriers on competing industries, customs privileges
and lower taxes (Martz 1972; Corkill and Cubitt 1988). Towards the
end of the nineteenth century, the political interests of the Coastal and
Andean regions translated into the formation of liberal and conservative
political parties respectively. Regional differences were incorporated in
the workings of the political process through informal power-sharing
arrangements or explicit electoral pacts (Hurtado 1990; Pachano 1996),
but confl icts consistently appeared during times of economic crisis as the
political and business elites competed for scarcer government resources
(Menéndez-Carrión 1986; Grindle and Thoumi 1993). In recent years,
regional alignments have reappeared to shape the nature of party com-
petition in Ecuador (Pachano 2006; Freidenberg 2008).
Until the nineties, ethnic conflict was a novel but long overdue feature
of Ecuadorian politics (Blankstein 1951; Martz 1972; Van Cott 2005).
Indigenous groups entered the political arena in 1990 when they formed
the Confederation of Indigenous Nationalities of Ecuador (CONAIE) to
demand and obtain significant Land Reform concessions from the Rodrigo
Borja Administration. The indigenous became politically salient with the
foundation of Pachakutik, the political arm of CONAIE in 1995. Since
1996, the growing success of Pachakutik appealed to a cross-indigenous–
middle-class mestizo constituency to compete in the presidential race dur-
ing the 1996 and 1998 general elections. Pachakutik gained congressional
seats in the 1996, 1998 and 2002 legislative elections, as well as in the 1997
National Assembly. Indigenous leaders won over 30% of mayoral races
and local office in the 2002 elections, and formed a successful presidential
coalition in 2002, for which they obtained two cabinet positions and other
sub-cabinet, regional and local offices. The indigenous furiously opposed
the adoption of President Jamil Mahuad’s dollarization plan and—together
with some military dissidents—they ousted the president in January 2000.
Since, the indigenous leadership has played an active but non-violent oppo-
sition to economic reforms from within formal democratic channels.
Regional and ethnic players have entered the political arena through
formal channels of democratic participation, including important electoral
reforms (Lucero 2001; Madrid 2005). A combination of permissive elec-
toral rules, frequent elite renewal through midterm elections and term lim-
its, and lack of effective barriers to legislative representation contributed to
a severe fragmentation of political parties and high volatility of electoral
preferences (Conaghan 1995; Jones 1995; Mejía Acosta et al. 2008). To
counter the proliferation of institutional veto players, presidents in Ecua-
dor were endowed with significant policymaking powers (Morgenstern and
Nacif 2002). Presidents had significant legislative powers such as executive
decree authority to introduce economic legislation, and strong veto powers
to block any unwanted legislation that was approved by Congress.
The combination of strong presidents with fragmented legislatures nar-
rowed the prospects for good policymaking in Ecuador. In general, presi-
dents could pursue two types of strategies for producing policy changes.
They could seek to adopt decisive policy changes by granting policymak-
ing abilities to non-political players (such as cabinet ministers, technocratic
bodies), thus bypassing the legislative arena. The nature and duration of
policies adopted through decisive players remained, however, tied to the
fate of those policymakers. Alternatively, presidents could seek political
legitimacy by negotiating policy reforms with a myriad of political inter-
ests represented in Congress (Mejía Acosta et al. 2008). Legislating with
multiple veto players imposed larger constraints to the president’s ability
to adopt his preferred policy changes, but adopted policies were more dif-
ficult to revert once they were signed into law. A review of the most relevant
economic reforms proposed by Ecuadorian presidents between 1979 and
2002 suggests that the adoption of economic reforms had mixed levels of
success. 2 Despite the institutional constraints, presidents appear to have
passed a significant number of reforms through the legislative process,
without exclusively relying on executive decree authority or the exclusive
power of decisive policymakers. The most important reform packages of
stabilization, modernization and dollarization laws were adopted by presi-
dents who faced highly fragmented congressional majorities and had no or
negligible partisan backing of their own: Osvaldo Hurtado (1981–1983),
Sixto Durán-Ballén (1992–1995) and Gustavo Noboa (2000–2002). More-
over, presidents like Hurtado or Durán Ballén, whose parties had less than
10% of congressional seats, were more likely to pass fiscal reforms than
Rodrigo Borja in 1988, whose party had 45% of congressional seats. Why
were some governments able to adopt and implement reforms while others
failed to upgrade policies over time? Why did presidents and legislators
agree to pass reforms that could alienate their bases of support? Were such
reforms adopted in the context of economic crises?
MAKING COALITIONS FOR REFORM:

EXISTING EXPLANATIONS
For the past two decades, scholars from different schools of thought have
offered explanations for the failed or successful adoption of reforms in
Latin America. These approaches can be grouped into agent-based or
rational choice explanations, crisis-based explanations, and structural
or institutional explanations. The next pages contain a discussion of the
assumptions made by these approaches and an assesment of their validity
to explain the adoption of reforms in the Ecuadorian context.
Agent-Based Explanations
A fi rst group of explanations has focused on the ability of decisive political
leaders to produce significant economic reforms sometimes even in spite
of organized opposition and against electoral mandates (Stokes 2001).
Whether the adoption and implementation of reforms were the result of
ideological convictions or they were pragmatic responses to specific politi-
cal and economic situations, remains an empirical question. On the one
hand, ideational theories focus on policymakers’ ability to learn from pre-
vious adjustment experiences, disseminate reform initiatives, and eventu-
ally converge on a common set of market-oriented values (Edwards 1995;
Hey and Klak 1999). The demise of the Communist model of state inter-
vention and the common academic background of key policymakers—in
U.S. universities—during the nineties help explain this policy convergence
(Weyland 2002).
Other scholars argue that self-interested politicians were more likely
to impose reforms because they came to power as “outsiders”—with
no clear links to pre-established political groups or parties—and were
able to transfer the costs of the adjustment to their political rivals while
compensating their allies (Geddes 1994). Thus, political leaders were
effectively able to redistribute the costs and benefits of the adjustment
to reshape favorable coalitions for reform (Kingstone 1999). Some strat-
egies included pushing for drastic changes instead of gradual reforms
at the beginning—honeymoon—of their mandates (Przeworski 1991),
delaying the costs of the adjustment for their own supporters (Gibson
and Calvo 2000), or channeling privatization deals—or their windfall
revenues—to their own allies (Weyland 2002).
Agent-based explanations have limited capacity to explain success and
failure of reforms in Ecuador. Political leaders often sought to isolate eco-
nomic policymaking from political influences by empowering decisive actors
in key policy domains, such as monetary policy (Conaghan 1995). At the
end of the day, however, reforms still had to go through Congress, where
the influence of legislative coalitions was critical for approval. A good case
in point is the mixed reform success of the Sixto Durán Ballén administra-
tion during the first half of the nineties (1992–1996). Although the conserva-
tive government was strongly committed to the adoption of market-oriented
reforms, and sought to isolate technical experts from political influence, it
achieved moderate success with fiscal, monetary and financial reforms but
was less successful in adopting trade, labor or privatization reforms (Hey and
Klak 1999). Conversely, the policy success of outsider-type politicians such
as Abdalá Bucaram in 1996 and Lucio Gutiérrez in 2003 was closely linked
to their coalition-making potential in Congress. In the first case, prospects
for reform quickly dissolved when Bucram’s legislative coalition collapsed six
months after taking office, and in the second case, the reform attempt was
captured by the interests of its conservative coalition partners in Congress.
A second caveat is that agent-based approaches can help explain the
adoption but not the survival of reforms themselves. In the contested Ecua-
dorian setting, the survival of market-oriented reforms depended on the
political survival of agents themselves (Mejía Acosta et al. 2008). With
very few exceptions, most adopted reforms did not last beyond the terms
of key policymakers—presidents, ministers—who sponsored them. Dur-
ing the eighties and nineties, for example, Ecuador experimented with
nine different types of exchange rate regimes, ranging from fi xed exchange
rate type to floating exchange rate types. This degree of decisiveness was
possible because monetary policies in Ecuador had been the exclusive pre-
rogative of the president, the fi nance minister, the monetary board, and
the head of the central bank (Mejía Acosta et al. 2008). By the same token,
however, these government officials had very short terms in office. For
example, fi nance ministers in Ecuador lasted an average of 14 months in
office. The Ecuador case suggests that the survival of key policymakers
was not immediately dependent on popularity ratings or the state of the
economy, but rather on the reliability of the legislative coalition backing
up the reform. As I will argue later, the formation and the dismissal of leg-
islative coalitions were also influential in the early removal of Vice Presi-
dent Alberto Dahik in 1995 and Presidents Abdalá Bucaram and Lucio
Gutiérrez in 1997 and 2005 respectively.
Crisis-Based Explanations
A second approach to explain the adoption of economic reform comes from
prospect theory. This approach challenges the rational choice assumptions
that individuals seek to maximize their expected utility functions and have
a fi xed tolerance for risk. Instead, it argues that individuals’ decision-mak-
ing process depends on their willingness to accept risks as well as their cur-
rent perceptions of welfare (Weyland 2002: 38). To explain the adoption
of market-oriented reforms in Latin America, Kurt Weyland argues that
individuals—common citizens and political leaders—become more willing
to take risks by electing political outsiders and supporting their push for
reforms if they perceive themselves to be “in the realm of losses,” if voters
are caught, for example, in the middle of a significant economic crisis. By
contrast, individuals who consider their economic situation to be “in the
realm of gains” are less willing to risk their existing level of happiness and
become adverse to the prospect of adopting major economic reforms (Wey-
land 2002: 39).
In Ecuador, the presence of adverse economic conditions was neither a
necessary nor a sufficient condition to expand citizens’ willingness to sup-
port reformers. Towards the end of the nineties, the government of Jamil
Mahuad faced a triple fiscal, banking and fi nancial crisis, caused in part
by fi nancial instability in international markets as well as declining oil
prices. The government adopted highly controversial policies to freeze bank
deposits in order to prevent a wider crisis of the fi nancial system, to tighten
regulation of the banking sector, and ultimately to adopt the dollar as the
national currency to prevent the possibility of hyperinflation. Predictably,
angry citizens were keen to support the ousting of President Mahuad by the
military and indigenous groups, and this anti-reform alliance went on to
win the subsequent presidential election. Former coup leader Lucio Gutiér-
rez not only won the 2002 presidential election in the absence of an eco-
nomic crisis, but upheld and advanced the reforms that provoked Mahuad’s
ousting: dollarization, labor flexibilization and tighter bank regulations.
Only a few months after taking office, Gutiérrez signed a letter of intent
with the IMF and proceeded to adopt economic reforms with the support
of the right, thus abandoning his electoral allies from the left and indig-
enous parties.
Prospect theory approaches failed to explore the policy processes by
which economic reforms were adopted. The framework heavily concentrates
on the roles played by the executive—and the citizenry—as a whole but
downplays the roles and incentives of legislators in passing and implement-
ing the reforms. From the perspective of the opposition, the theory predicts
that an economic crisis will put opposition legislators in the “domain of the
gains” if they could extract an electoral advantage from the president’s fail-
ure. In this situation, it would make sense for potential coalition partners
to maintain the status quo and oppose the president’s attempts at economic
reform rather than supporting unpopular reforms.
Institutional Explanations
From an institutional perspective, it has been argued that the effective adop-
tion and successful implementation of policy reforms are closely associated
to the quality or strength of political institutions. Countries with stronger
political party systems, professionalized legislatures and bureaucracies, and
independent judiciaries, were better equipped to adopt and sustain policy
reforms (Cox and McCubbins; Stein et al. 2005; Stein et al. 2008). Con-
versely, countries with highly fragmented legislatures, weak political parties,
lacking a professional civil service or an independent judiciary hindered the
adoption of any policy reforms and allowed widespread corruption.
Institutional approaches are relevant to explain policy success or fail-
ure from the perspective of the policymaking process itself. The study of
legislative coalitions offers a unique window to identify who the relevant
policymakers are, what formal and informal incentives and capabilities
shape legislators’ willingness to cooperate with one another, and what
mechanisms ensure or enforce political cooperation. Institutional predic-
tions argue that policy change tends to happen where there are fewer
policy (veto) players whose consent is needed to adopt changes, and/or
veto players have converging policy preferences. In practice, presidents
who enjoy the legislative support of a large and disciplined party in Con-
gress face fewer transaction costs for adopting reforms. Conversely, where
presidents face a highly fragmented legislature, institutional explanations
tend to predict low probabilities of policy success given the high trans-
action costs of negotiating reforms (Payne et al. 2002). In a fragmented
setting, such as the Ecuadorian case, presidents and legislators have few
formal incentives to cooperate with one another, especially if coalition
partners fear that the electoral cost of cooperating with the government
may exceed the political benefit obtained from voting together.
By focusing on the strength of formal interactions alone, institutional
explanations may have a tendency to overemphasize failure. Comparative
evidence from Brazil suggests that the presence of inchoate party systems
did not prevent executives “from passing reforms, encouraging new invest-
ment and new investment inflows, and managing inflation” (Kingstone
2000: 16; Figueiredo and Limongi 2000). The adoption of dollarization
reforms in Ecuador also illustrates how a similar set of formal institutions
can lead to different policy outcomes. The adoption of the U.S. dollar as
the national currency was carried out by Jamil Mahuad in January 2000,
as a last resort option to respond to a mounting fiscal, monetary and fi nan-
cial crisis. Shortly after Mahuad’s ousting from office, his Vice President,
Gustavo Noboa, faced the challenge of adopting dramatic policy changes
to implement his predecessor’s dollarization law. Between 2000 and 2002,
Noboa pushed significant labor markets, fiscal, monetary, fi nancial and
trade reforms through the same Congress that voted Mahuad out of office.
Noboa was also able to pass a Fiscal Transparency Law and met the IMF
macroeconomic conditions and stability indicators required to sign a loan
agreement at the end of 2002. What is more remarkable is that the presi-
dent achieved these congressional victories without having any formal
party supporters in Congress. The following section builds on the institu-
tional approaches discussed so far but focuses on the president’s ability to
form coalitions around reform.
COALITION-MAKING IN PRESIDENTIAL SYSTEMS
Assembling policy coalitions in presidential systems poses a particular

challenge because the political fortunes of coalition partners do not imme-
diately depend on policy success. In a parliamentary system, coalition for-
mation and policy success are directly linked to government survival (Laver
and Schofield 1990; Lupia and Strom 1995; Laver and Shepsle 1996). The
government party or coalition partners have formal means to introduce
their policy priorities in the government’s agenda but they are also liable
for the government responsibilities that come with it. Failure to form policy
coalitions can bring a vote of no confidence from the parliament and induce
a change in the government leadership (Haggard and McCubbins 2001;
Strom 1990).
Under separation of powers, presidents are elected for fixed-term man-
dates and do not depend on legislative endorsement or a confidence vote
from Congress to survive in office; however, they do need the support of a
single government party or a party coalition to approve their policy agenda
(Mainwaring and Shugart 1997).3 It is therefore important to ask how pres-
idents are able to form and sustain legislative majorities or “presidential
coalitions,” and what determines the president’s strength or capacity to put
his or her own stamp on policies (Mainwaring and Shugart 1997).
The study of conflict and cooperation between the executive and the
legislative branches has received much scholarly attention over the past two
decades. Most of the theoretical models explaining policymaking under
separation of powers have produced empirical implications for the study
of the two-party system in the United States (Binder 2003; Cameron 2000;
Krehbiel 1998). In Latin America, scholarly contributions have focused on
the allocation of powers between presidents and legislatures (Carey and
Shugart 1998; Mainwaring and Shugart 1997; Tsebelis and Alemán 2003),
the working of the electoral calendar (Jones 1995), and the roles of cabinet
formation (Amorim Neto 1998b; Altman 2000), among others.
Scott Mainwaring and Mathew Shugart argue that the president’s ability
to put his or her stamp on policy depends on the allocation of constitutional
and partisan powers (Mainwaring and Shugart 1997: 40). Constitutional
powers can be classified as proactive if they help expand the president’s
agenda control to promote policy change away from the status quo. Consti-
tutional powers are reactive if they allow the president to block, postpone
and even rewrite unwanted bills, thus maintaining the status quo. Exam-
ples of proactive powers include the president’s ability to rule by decree, bill
initiation privileges, emergency powers and the prerogative to submit legis-
lation to plebiscite. Reactive or veto powers give presidents the possibility
to block complete, partial or selective pieces of legislation. Partisan powers
refer to the size and reliability of the president’s party in the legislature.
Unlike constitutional powers that are embedded as part of the institutional
rules of the game, partisan powers are given by the number and discipline
of legislative parties, which vary according to electoral cycles and social
cleavages. Thus, a president will enjoy greater partisan powers if elections
yield a larger party contingent and party leaders have the ability to ensure
the voting unity of the rank and file.
According to the presidential powers framework, the president’s abil-
ity to effect policy change (presidential strength) results from the inter-
action between constitutional and partisan powers. Presidents who are
able to marshal the support of large and/or disciplined troops in Con-
gress usually lack strong constitutional prerogatives to legislate. This is
the case for Costa Rica, El Salvador, Honduras, Mexico (before 1997),
Nicaragua (during the Sandinista years), Paraguay, Uruguay, and Ven-
ezuela (except 1961–1973 and 1994–1999). Conversely, presidents who
lack reliable congressional support were empowered with large consti-
tutional artillery of veto and decree powers to advance their legislative
agenda. This was the case in Brazil, Chile, Colombia, Ecuador and Peru
(before 1992).4
The analytical framework produced a useful typology of presidential
regimes according to their constitutional and partisan powers and illus-
trated the tradeoff between these two (Mainwaring and Shugart 1997:
432). However, the framework does not explain why presidents chose
to use partisan or constitutional powers when they had both at their
disposal. For example, why would Chilean presidents prefer to cement
multiparty coalitions instead of using their strong constitutional powers
(Siavelis 2002)? Or why did Argentinean president Menem secure parti-
san support in Congress before bombarding Congress with legislation by
decree (Mustapic 2002)?
Building on the classification of presidential powers, Scott Morgen-
stern and Benito Nacif developed an “anticipated reactions” framework to
explain strategic interactions between presidents and legislatures (2002).
Their premise is that even the most authoritarian executives would find
that anticipating a (possible) legislative veto and bargaining with the assem-
bly may be a cheaper strategy than reacting spasmodically to legislative
resistance. Thus, they argue that a president’s optimal strategy depends
on her use of unilateral or integrative powers (2002: 450). Unilateral pow-
ers, like constitutional powers, are used by presidents to compensate for
their lack of political strength. Conversely, integrative powers are used by
presidents to intervene more closely in the legislative process. These powers
contain a mixed basket of treats and threats, including the distribution of
pork, patronage, government portfolios and policy concessions to legisla-
tive partners (Cox and Morgenstern 2002: 454–5). Gary Cox and Scott
Morgenstern develop a typology of strategies based on legislators’ incen-
tives to cooperate with the executive and “pure” presidential strategies
based on legislative types: a) a non-cooperative or recalcitrant assembly is
paired with an imperial or impotent president, b) a workable assembly is
associated with a coalitional president, c) a venal or parochial assembly is
paired with a nationally-oriented president, and d) a subservient assembly
is to rubberstamp the initiatives of a dominant president (Cox and Morgen-
stern 2002: 455).
This literature suggests that presidents in highly fragmented settings
(weak partisan powers) face significant difficulties to promote reform
coalitions. Lacking reliable partisan support in Congress, presidents are
likely to use strong constitutional powers to push for preferred policies
despite legislative opposition (imperial types); alternatively, presidents
with limited resources to entice legislative cooperation are likely to remain
hostage to opposition parties (impotent types). In both cases, the underly-
ing premise is that individual legislators or opposition parties have very
few incentives to cooperate with the president’s agenda when they are not
part of the government. At best, presidents will be able to offer selective
incentives such as pork or patronage to entice cooperation of individual
legislators, but these payoffs quickly eroded over time. Cox and Mor-
genstern correctly acknowledge that these temporary exchanges may be
unsustainable in the long run: “if (the president) fi nds it costly to dispense
enough pork to buy every vote, or enough patronage to buy every legisla-
tor, or enough money to buy the election: and if it’s also costly to rule by
decree; then even authoritarian presidents should consider cutting a deal
with the assembly” (2002: 447).
The Puzzle of Coalition Formation in Ecuador

The literature surveyed thus far does not account for unexpected varia-
tions in policymaking patterns observed in Ecuador. Contrary to insti-
tutional predictions, empirical evidence suggests that presidents did not
abuse their constitutional powers to legislate nor did they exclusively rely
on the support of opposition dissidents to approve policy reforms.
As previously discussed, Ecuadorian presidents are endowed with
significant executive authority to push for legislation to compensate for
their lack of a reliable party majority. Yet, the data suggests that on
average, presidents used executive decree authority only in 35% of the
economic reform bills that were introduced to Congress between 1981
and 2002. While 72% of legislation introduced through executive decree
authority was indeed approved by Congress, this strategy was not suf-
ficient to compensate for an overall low success rate of presidential initia-
tives (25%). Interestingly, the larger share of the presidential agenda was
submitted through the regular legislative process.
Another unexpected fi nding is that a relatively low portion of legislators
abandoned their parties to vote with the government (party switchers),
compared to what is commonly expected of Ecuador’s volatile congress.
On avergae, the yearly rate of defections (10%) could also be up to three
times lower than the rates found in Brazil’s equally fragmented legis-
lature, according to some accounts (Hagopian 2003). Although party
defections did contribute to presidential success in Congress, these were
strategic and predictable decisions of maverick politicians who were
interested in advancing their own career prospects. Party defections were
rarely isolated events, and defecting legislators usually regrouped into
“legislative movements” or factions that adopted an informal leader, a
faction name and a party-like structure. This unexpected result suggests
that legislators derived individual benefits from collective action even in
a highly fragmented context.
The data from Ecuador suggests that, presidents did form legislative
coalitions with multiple opposition parties. Institutional explanations
have argued that presidents who have a majority party in Congress are
more likely to get their initiatives approved (Jones 1995; Mainwaring
and Shugart 1997). But when the president’s party lacks a legislative
majority, a larger plurality of the president’s party actually undermines
the likelihood of policy success. In the Ecuadorian context, the critical
variable appears to be the size and reliability of the government coali-
tion, not the president’s party. An analysis of party unity scores in the
Ecuadorian legislature shows surprisingly high rates of party discipline:
in average, 90% of legislators had a tendency to vote together on policy
issues, even after eliminating non-controversial legislation. High vot-
ing unity challenges the conventional wisdom about loose party dis-
cipline and weak party leadership in Ecuador (Burbano and Rowland
1998; Conaghan 1995) and suggests that political parties and their lead-
ers, not individual legislators, played a critical role in making reforms
happen.
If institutional explanations do not fully account for these unexpected
fi ndings, what is the missing link that explains policymaking in Ecua-
dor? Why is it that Ecuadorian presidents did not make more effective
use of their constitutional prerogatives when pushing for legislation and
preferred to introduce legislation through the regular legislative proce-
dure? Why was not party switching a generalized phenomenon despite
high potential benefits and low or ineffective legal barriers to prevent
it? Why do individual legislators appear to derive political benefits from
collective action despite working in a highly fragmented and uncertain
legislative arena?
The Making of Ghost Coalitions

How did presidents and legislators form and sustain coalitions for reform
despite significant institutional barriers? Recall that in the absence of for-
mal power-sharing mechanisms opposition parties and legislators face a
cooperation dilemma in a presidential regime. On the one hand, legisla-
tors could support the president’s agenda of reforms, thus gaining access
to valuable government resources (fi nancial and political) that would
allow them to cultivate electoral support and advance their own political
ambitions. But becoming part of the government coalition would make
legislators liable for the policies adopted vis-à-vis their own constituents.
On the other hand, opposition parties could stage a fierce opposition to
government policies from the beginning of the mandate, but miss out on
the coalition payoffs that parties need to cultivate and sustain the support
of their voters until the next election.
Ghost coalitions offered a functional way to overcome this cooperation
dilemma by allowing legislators to benefit from coalition payoffs while
avoiding the public liability of voting with the government. As in other
fragmented presidential systems, governments distributed cabinet posi-
tions, policy concessions, government patronage and pork to potential
legislative partners in exchange for legislative votes on economic reform
initiatives. In Ecuador, however, parties and legislators were keen to main-
tain a reputation of political independence in order to preserve their elec-
toral capital for the next election, so they systematically denied any formal
association with the government. If, for example, a coalition partner was
offered a cabinet post, the incentive was accepted as an individual, not
a party, decision. If the ministerial appointment subsequently helped the
party’s vote for a government proposal, politicians acknowledged a mere
“coincidence of interests,” not a deliberated legislative agreement. These
clandestine negotiations between presidents and parties were especially
used to advance unpopular government policies. The absence of elec-
tronic roll-call voting mechanisms in Congress facilitated this informal
but systematic practice, and the media had a limited role and capacity to
investigate and report on these transactions.
Ghost Coalitions as an Informal Institution

The formation of legislative ghost coalitions has been a defi ning feature
of the policymaking game in Ecuador since the transition to democracy in
1979. This set of “informally institutionalized” rules allowed policymak-
ers to trade votes for political favors: presidents could adopt some policy
reforms and legislators were able to provide goods and services to their
provinces. Modeled in the framework of informal institutions, ghost coali-
tions were clandestine—sometimes written—political agreements that
were “created, communicated, and enforced outside of officially sanctioned
channels” (Helmke and Levitsky 2004).
The political incentives for making ghost coalitions can be mapped
along two dimensions: the availability of coalition payments and the vis-
ibility of coalition agreements. Along the fi rst dimension, ghost coali-
tions enhanced the value of coalition incentives by facilitating agreements
between presidents and political parties, not individual legislators. As
observed in other presidential regimes, governments enjoyed ample pow-
ers to offer coalition incentives to potential legislative partners. Incentives
varied from the allocation of ministerial appointments and significant
policy concessions to political parties, to the distribution of clientelis-
tic and particularistic benefits such as pork and patronage for individual
legislators (Raile et al. 2006). Far from crafting piecemeal agreements
with individual legislators, ghost coalitions allowed presidents to reduce
transaction costs by negotiating wholesale agreements with party leaders.
Leaders were instrumental agents of coalition-making because they could
broker political exchanges between legislators’ particularistic demands
and the executive’s fi nite set of coalition incentives. For example, if the
legislative party received a cabinet appointment in the government—even
if not publicly acknowledged—it automatically gained some policymaking
influence on a government sector, as well as the ability to dispense pork
and patronage to party pundits from that government position. Presidents
and opposition parties also negotiated power-sharing arrangements with
other key government offices such as the judiciary, electoral and constitu-
tional tribunals, and diplomatic postings.
Party leaders were also instrumental to coalition-making because they
helped enforce voting unity among the rank and file. Although leaders
lacked electoral or legislative leverage to enforce voting unity at different
points in time, they managed to influence and determine the subsequent
political careers of the rank and file. This level of party influence over polit-
ical careers helps explain why the majority of legislators chose to maintain
their party affiliation despite the low barriers to exit and the effective lack
of sanctions for party defectors. In sum, party leaders became critical fig-
ures that brokered and enforced legislative agreements between the execu-
tive and legislators, thus expanding the value of coalition incentives in the
policymaking arena.
Along the second dimension, ghost coalitions helped reduce the par-
ties’ political liability of collaborating with a lame duck government.
Since presidents in Ecuador could not seek immediate reelection, legis-
lative incentives to disband the government coalition increased as new
elections approached. And although legislators could not pursue immedi-
ate reelection for most part of the study either (1979–1996), they were
nevertheless interested in maintaining a reputation of political indepen-
dence to advance their political ambition to a different arena in the next
electoral event.
The occurrence of clandestine agreements increased as presidents’
job approval ratings declined or new elections approached. Some of
these mechanisms, for example, took the form of “silent majorities” in
Congress, whereby legislative leaders allowed bills to become laws by
instructing the rank and fi le to abstain to vote on key issues. Sometimes
informal agreements were more structured and even written, establish-
ing the terms for cooperation. In 1993, a “letter of commitment” was
leaked to the media by a disgruntled legislator, to reveal the contents of a
ghost alliance between top government offi cials and independent legisla-
tors. In the letter, the government offered a series of payoffs including the
allocation of off-budgetary spending, appointments in the public sector
and support for reelection reform, in exchange for legislators’ commit-
ment not to block government-sponsored modernization reforms (Lan-
dau 2001).
While ghost coalitions helped secure legislative cooperation through
clandestine agreements, they also contained the elements to sanction
political defections. The enforcement of clandestine political agreements
was carried out through a parallel system of checks and balances. Politi-
cians used or threatened to launch political scandals (followed by court
indictments, audits or formal impeachment proceedings) to remind coali-
tion partners of previous political agreements or as a way to renegotiate
the terms of cooperation. Given that opposition parties often controlled
oversight bodies such as the judiciary and the constitutional tribunal,
political threats were credible and often became instruments of politi-
cal control and blackmail. In the above example, “going public” with a
political agreement was one way of retaliation, which, in this case, trig-
gered a larger corruption scandal between the government and opposition
legislators.
Taken as an informal legislative practice, ghost coalitions offered a
suboptimal but functional way to produce short-term cooperation that
allowed policymakers to achieve their goals despite the constraints of a
highly fragmented presidential system (Lauth 2000). As the next section
will show, however, in the long run ghost coalitions created a parallel sys-
tem of accountability between elected officials and voters that undermined
the consolidation of democratic governance in Ecuador.
Ghost Coalitions and the 1998 Constitutional Reforms

Ecuador offers a unique opportunity to evaluate the impact of institu-
tional reforms on the workings of informal institutions. In the wake of a
corruption scandal that led to the resignation of Vice President Alberto
Dahik in 1995, and the swift ousting of President Bucaram in the hands
of an opposition majority in Congress in 1997, Ecuadorian policymakers
were poised to adopt constitutional reforms that would improve the exec-
utive’s ability to push for decisive policy changes while improving mecha-
nisms of political representation and curbing corruption. A constituent
assembly was formed after the dismissal of President Bucaram, and the
1998 Constitution introduced significant reforms that affected coalition
formation in the Ecuadorian Congress. In the fi rst place, the new Consti-
tution strengthened the executive’s policymaking ability by giving greater
powers and protecting the president and cabinet members from legislative
scrutiny. Legislators in turn, were given greater electoral incentives to be
more accountable to voters through changes to electoral rules and abol-
ishing term limits. Legal provisions were adopted to reduce the executive’s
discretionary and off-budgetary spending and penalize any vote-buying
techniques such as distributing pork or patronage to legislators.
Paradoxically, the adoption of “textbook” institutional reforms to
improve governance (stronger executives, more representative legisla-
tors, and more rigid anti-corruption laws) altered the delicate and infor-
mal balance of powers between presidents and legislatures that allowed
them to trade legislative reforms for selective political benefits. Far from
improving politicians’ ability to legislate, I argue that the 1998 reforms
eliminated the few informal coalition incentives used to cement political
cooperation and contributed to further political stalemate. Asked about
the legislative process to approve the fi scal budget, a party leader in Con-
gress described how the new rules changed legislators’ political incen-
tives to collaborate with the executive:5
“In the past ( . . . ) the President, the administration’s Secretary Gen-

eral, the Minister of Defense and the Minister of the Interior all had
discretionary expenditures. Even if many don’t like to accept it, these
served in the past to buy legislators, to buy loyalties in detriment of (the
discipline of) the political parties ( . . . ). It was a functional system: (in)
18 years of democracy and there were no problems associated with the
approval of the fiscal budget. The amount of the budget was negotiated
by sectors, and legislators negotiated the amounts by entries, by alloca-
tions. It was a well-known secret. Legislators in the Budget Committee
( . . . ) negotiated giant allocations for themselves: they ( . . . ) selected
contractors, and did not encounter problems with the Comptroller’s
Office because (their political parties) controlled the Provincial Comp-
trollers, the Judicial Branch, etc. These mechanisms no longer exist.
While there is more transparency (in the budget process), sectors feel
powerless to obtain gains and vent their frustration by radically oppos-
ing government initiatives.”
Overall, institutional reforms not only disrupted cooperation incentives but

they also contributed to further regime instability. After 1998, executives did
not achieve higher success rates in Congress despite having stronger decree
and veto powers; there were more powerful cabinet ministers but lasted fewer
years in office; reelection rates did not escalate despite the abolition of term
limits, and the rate of party defections remained the same despite explicit
provisions to punish this behavior. More importantly, as discussed in the
next section, the lack of available coalition incentives created the conditions
that led to the legislative ousting of two more presidents in 2000 and 2005.
Why did constitutional reforms produce a backlash effect after 1998?
Were institutional reforms badly implemented? Were there structural fac-
tors that ignited political conflict, such as social exclusion or economic
crisis? In the light of increased political instability after 1998, it is tempt-
ing to conclude that ghost coalitions sustained a suboptimal yet functional
arrangement to promote political cooperation despite institutional con-
straints. In the absence of formal and informal coalition incentives, the pol-
icymaking process in Ecuador was severely disrupted. If party leaders had
become brokers of legislative agreements, in the past, they became agents
of political instability in the absence of cooperation incentives (Valenzuela
1977). The consecutive presidential crises in 2000 and 2005 show how
party leaders openly blackmailed or conspired against the president.
The Ecuadorian case offers a learning opportunity to inform ongo-
ing debates (and diminish expectations) about the expected outcomes of
reform processes in other parts of the world. The case at hand shows how
the failure to understand the formal and informal dynamics behind coali-
tion-making in a fragmented setting rendered ineffective the adoption of
new rules intended to improve the president’s policymaking abilities. In
hindsight, it is not difficult to see that addressing the governance problem
in Ecuador had less to do with restricting the access to coalition incentives
but rather making them more transparent and publicly available to elected
representatives, in order to facilitate political exchanges.
ECONOMIC REFORMS, GHOST COALITIONS

AND POLITICAL INSTABILITY
A common image associated with the adoption of economic reforms in

Latin America is that the severe economic adjustments proposed by policy
initiatives were received with widespread discontent among the citizenry.
Policy divergences were often followed by increased political confrontations
and sometimes even dramatic political outcomes such as the early termina-
tion of elected politicians. In different combinations, these elements played
an important role in the events leading to the congressional impeachment
and resignation of Fernando Collor de Mello in Brazil (1992), the impeach-
ment for corruption charges of Carlos Andrés Perez in Venezuela (1993),
the temporary closing of Congress by Alberto Fujimori in Peru (1992), Fer-
nando de la Rua in Argentina (2001), and Gonzalo Sanchez de Lozada and
Carlos Mesa in Bolivia (2003 and 2005).
In Ecuador, three presidents and one vice president were prematurely
removed from office between 1995 and 2005. But the Ecuadorian experi-
ence suggests that the adoption of economic reforms was not consistently
associated with political instability. Vice President Dahik was impeached
on corruption charges in 1995 and resigned before being acquitted by
Congress. President Bucaram was ousted from office in February 1997
by a legislative majority barely six months after being sworn in for being
mentally incapable of governing the country (Pérez-Liñán 2007). Jamil
Mahuad was removed from office by a military-indigenous alliance in
2000 on the grounds of economic mismanagement, and the ousting
was ratified by a congressional majority. President Lucio Gutiérrez was
removed in April 2005 by a congressional resolution that declared his
absence from office. The resolution was a way to formalize a popular
demand to end his mandate after Gutiérrez repeated abuses of constitu-
tional power. With the exception of the Mahuad crisis, the other cases of
presidential instability were not directly associated with explicit efforts to
adopt economic reforms, or to situations of actual economic crisis. Vice
President Dahik left the government in a context of relative economic sta-
bility with low infl ation rates and relative economic growth. The Abdalá
Bucaram administration benefited in part from the economic growth ini-
tiated in the previous (Durán Ballén) administration, and his inclusive
attempt to adopt a convertibility plan in late 1996 was not responsible for
the widespread mobilization that produced his ousting from office. The
fall of President Gutiérrez, eight years later, took place in the context of
a relative economic bonanza due to high oil prices and relative macroeco-
nomic stability.
All cases of presidential instability show that the formation and demise
of legislative support around the president was a common factor that con-
tributed to the early removal of elected presidents (Marsteintredet 2008;
Pérez-Liñán 2007). In Ecuador, I argue that the reduction and elimination
of cooperation incentives that facilitated ghost coalitions after 1995 further
eroded the president’s feeble base of political support. Ghost coalitions had
been a well-known, sometimes even written mechanism to consolidate and
enforce legislative support around the president’s agenda, while sanction-
ing defections from cooperation. The adoption of reforms between 1995
and 1998 increased transaction costs in two ways. First, the adoption of a
personalized voting rule and the abolition of legislative term limits made
legislators more visible and accountable to the preferences and demands
of their voters. Secondly, legislators—and presidents—lost their ability to
bring services or government transfers to their districts, thus eliminating
any visible means to do constituency service in favor of their newly empow-
ered districts. In other words, institutional reforms made legislators more
responsible for delivering goods to their voters, but eliminated the ways
and means to be more responsive to these demands.
Paradoxically, the adoption of governance reforms that sought to
improve the president’s policymaking ability and curb legislative incentives
for corruption disrupted the informal rules of the coalition-making game
in Ecuador and induced greater political instability. The analysis of eroding
coalitions and presidential failure is an issue that exceeds the scope of this
book (Mejía Acosta and Polga Hecimovich 2007). The unintended conse-
quences of governance reforms, however, mark an important epilogue to
this book that confi rms the relevance and validity of ghost coalitions.
BOOK OVERVIEW
The adoption of market-oriented reforms in Ecuador offers the ideal setting

to understand the workings of the policymaking process in a multiparty
democracy. The book introduces the notion of ghost coalitions to explain
the informal mechanisms through which policymakers—presidents and
legislators—adjusted the formal rules of the game to advance their own
political ambitions and produce significant economic reforms. The book
offers a detailed discussion of the goals and incentives of policy players,
and analyzes the impact of their strategic interactions on policymaking out-
comes. More importantly, the book offers a study of institutional change
over time. Through a series of constitutional reforms adopted between 1995
and 1998, lawmakers adopted significant institutional changes intended to
reduce extreme political fragmentation and improve the president’s ability
to produce policy changes. The Ecuadorian case offers a “natural experi-
ment” scenario to look at formal and informal patterns of legislative bar-
gaining before and after 1998.
The next chapter proposes a theoretical framework to analyze coopera-
tion patterns in a fragmented legislature. Drawing from institutional and
rational choice approaches, it looks at legislative bargaining as a nested
interaction between three ideal players: a president, the leader of the median
party and a pivotal legislator whose consent is needed to form a majority.
Potentially, policy changes (or gridlock) result from the agreements of at
least two players, given the expected action of a third one. For instance, a
president can propose a bargain to the party leader, but the leader needs
to make an agreeable proposition to his pivotal legislator, or the legisla-
tor may defect and seek an independent and improved agreement with the
president. Assuming that individual legislators are motivated with advanc-
ing their own political interests, the model explains that—in equilibrium—
the likelihood of pro-government coalitions depends on the leader’s ability
to anticipate and meet the demands of his pivotal legislators and effectively
bargain those demands with the president. The formality and visibility of
those coalitions would decrease in direct proportion to the government’s
popularity ratings.
Chapter 3 uses logistic (logit) analysis to measure the institutional
determinants of presidential success in passing market-oriented reforms.
Contrary to theoretical expectations, it fi nds that presidents did not make
extensive use of decree powers when passing legislation, but privileged the
formation of legislative coalitions. Shorter ideological distances between
the president and the legislature were crucial for passing economic legisla-
tion; surprisingly, a larger size of the president’s party or high job approval
rates were not relevant to explain policy change.
Chapters 4, 5 and 6 further develop the legislative game along the deci-
sion nodes identified in Chapter 2. Chapter 4 uses roll call data to look
at the president’s dilemma of gathering wholesale support from party
leaders, or buying retail support from individual legislators. High unity
scores (in the range of 90% after controlling for non-controversial leg-
islation) confi rm the claim that party voting with the president was a
frequent occurrence while individual vote-buying was a marginal choice.
This fi nding is also counterintuitive with existing accounts that argue
that party leaders do not have enough electoral or legislative leverage to
enforce discipline in the rank and fi le. The chapter develops the argument
that even in a fragmented legislative environment, party leaders can play
crucial brokering roles to minimize the president’s transaction costs and
maximize the legislators’ ability to access coalition payoffs.
Chapter 5 focuses on the legislators’ decision to defect or dissent from
party ranks and independently vote with the president. Logistical regression
analyses are used to explain patterns of party discipline as well as party
switching patterns. In both cases, a similar set of descriptors fit the profile
of a maverick legislator (small provinces, intense constituencies, short politi-
cal horizons, and centrist or no ideology). The crucial difference between
dissent (voice) and switching (exit) however, was the visibility or liability of
becoming a free agent in a fragmented legislature that featured no shortage
of pivotal players. Given the choice, legislators preferred to craft informal
voting mechanisms to support the president without actually voting for his
proposals (also known as silent majorities).
Chapter 6 makes a qualitative account of the benefits and rewards for
cooperation, and unveils the clandestine nature of agreements. Some mecha-
nisms, like the making of ghost coalitions, helped players reduce the visibility
of being associated with the government while ensuring the flow of coopera-
tion payoffs. In this logic, publicity stunts and other position-taking strate-
gies were often crafted to maintain a reputation of “political independence”
in the media and public opinion. Empirical evidence comes from media
records, field interviews, congressional archives, and job approval ratings.
At the end of the chapter, two mini case studies illustrate the workings of
formal and informal institutions: the approval of modernization and dollar-
ization reforms during the Durán Ballén (1992–1996) and Mahuad-Noboa
(1998–2002) administrations, respectively. Chapter 7 summarizes the main
argument of the book, discusses how ghost coalitions have changed in the
presence of formal institutional change, and explores the link between ghost
coalitions and long-term democratic accountability.
One of the main contributions of this book is to uncover and systemati-
cally analyze the gray areas of coalition-making in fragmented presidential
systems. Inspired by the workings of parliamentary systems, most of the
relevant literature tends to focus on the roles that cabinet formation strate-
gies play in cementing multiparty coalitions. I argue, however, that the
study of visible and programmatic agreements made with political parties
only explains a fraction of available coalition strategies. The ghost coali-
tion’s framework introduced by this book helps expand our understanding
of coalition-making arrangements when these take place around individu-
als, not parties, and when they have a clandestine, not public, nature. To
undertake this problem, the book models coalition-making strategies along
two dimensions: the availability of coalition incentives and the associated
liability of making government coalitions.
Looking at the availability and value of coalition incentives, the ghost
coalition’s framework reinforces important scholarly fi ndings that high-
light the relevance of legislative brokers to secure coalitional trust (Alston
et al. 2008; Morgenstern 2004). Party leaders in Ecuador became critical
agents to negotiate unified and reliable legislative support for government
policies in exchange of collective and selective political benefits for the par-
ty’s rank and file. The value of this collective bargaining principle helped
reduce or discourage individual party defections, and replicated collective
bargaining strategies among groups of independent legislators. The second
dimension of coalition-making reveals the use of clandestine—as opposed
to public—cooperation agreements as a political strategy of opposition
parties to reduce their liability of voting with the government. Although
the limiting effects of public bargaining on coalition formation have been
illustrated elsewhere (Carey 2007; Mershon 1996), this book offers a sys-
tematic look at different cooperation modalities through which opposition
parties staged loud confrontations with the executive while silently benefit-
ing from government cooperation.
The book also offers some advice to scholars and policymakers about
the perils of advocating or promoting formal institutional changes that dis-
regard or ignore the workings of existing informal practices. Ghost coali-
tions are portrayed as an informal mechanism that provided presidents
and legislators with sufficient cooperation incentives to overcome institu-
tional rigidities and helped secure policy changes. Most importantly, the
book illustrates how these informal coalition strategies were adapted and
continued to be relevant despite the adoption of significant institutional
changes intended to facilitate policymaking. Greater legislative preroga-
tives, for example, did not improve presidents’ policymaking abilities, or
the adoption of explicit sanctions to punish vote-buying did not prevent the
formation of clandestine agreements with parties and individual legislators.
And despite the adoption of electoral reforms intended to minimize the
role of party bosses in the policy process, party leaders remained the most
influential agents responsible for making or breaking policy deadlocks. In
the absence of valuable cooperation incentives, disgruntled party leaders
played a decisive role in the ousting of three presidents since 1997.
2 A Proposed Model for Legislative
Cooperation
How do presidents promote policies when they lack congressional majori-

ties? Why would legislators and their parties vote with the president if they
are not part of the government? Existing approaches to coalition formation
in presidential systems discuss three possible scenarios: a) presidents can
cement legislative support through power-sharing agreements, b) presidents
compromise nationally-oriented policy goals to accommodate particularis-
tic demands of legislators, and c) presidents use constitutional prerogatives
to rule by decree and veto powers, to bypass the congressional opposition
(Mainwaring and Shugart 1997; Krehbiel 1998; Ames 2001; Morgenstern
and Nacif 2002; Binder 2003). This chapter proposes an analytical frame-
work to understand the choices presidents—and legislators—make to pro-
mote policy changes in the context of a highly fragmented legislature.
The fi rst section of the chapter describes the preferences, interests, and
capabilities of the relevant veto players. Veto players are defined as political
actors whose agreement is necessary but not sufficient to produce policy
change (Tsebelis 1995). These should be distinguished from decisive play-
ers, whose approval is sufficient but not necessary to change existing poli-
cies, and from dictators, whose approval is both necessary and sufficient to
impose new policies (Pérez-Liñán and Rodríguez-Raga 2003). The frame-
work looks at the range of acceptable policy outcomes that can improve the
current welfare of players in a given policy space; the intersection of accept-
able options thus predicts the available space for adopting policy reforms.
Policy change depends in turn on the number and relative size of players, as
well as their policy preferences vis-à-vis existing policies.
The second section of the chapter explains patterns of policy change
based on the strategic interactions between the executive and the legisla-
ture. Different from existing approaches that focus on the strategies and
choices of two branches, this model builds around three strategic players in
the policymaking game: a president, a party leader and a pivotal legislator.
The president represents the executive branch and is the agenda setter, or
the one who proposes policy change. But inside the legislature, there are
two players in confl ict: a party leader who is assumed to represent the pref-
erences of the median legislator regardless of whether this is government or
opposition, and an individual legislator, whose vote can potentially make
or break the legislative majority to support or block the proposed policy
change.
The third section introduces the notion of ghost coalitions as an infor-
mal mechanism for coalition formation in fragmented legislatures. This
coalition model helps explain strategic interactions between presidents,
party leaders and pivotal players that allow them to maximize the benefits
of government cooperation while minimizing the cost or liability of voting
with the government.
EXPLAINING POLICY CHANGE AND POLICY GRIDLOCK
Consider three ideal decision-makers in a legislature: a president—and his

legislative party—(P), the leader of the largest congressional party (L), and
a pivotal legislator (V) whose consent is needed to make or break a congres-
sional majority. Policy change is produced when the policy preferences of at
least two of these veto players—in a pre-determined policy space—contain
a range of acceptable outcomes that could improve on the existing state
of things (status quo). Veto players are defi ned as individual or collective
actors whose agreement is necessary to produce policy changes (Tsebelis
2002: 19).
There are some conditions or dimensions that affect the likelihood of
policy changes. An immediate dimension refers to the original position of
the status quo (SQ) vis-à-vis the preferences of other actors. Existing mod-
els converge to predict that policy change is more likely when players have
distant preferences from the existing SQ, but if players preferences are dis-
tant and on opposite ends of the existing policy, the SQ is likely to prevail
(Krehbiel 1998; Tsebelis 2002).
A second dimension of policy change is the size of the majority thresh-
old required by the voting rule (with unanimity rule being the highest
threshold). If the voting threshold is low (requiring a simple majority or
even plurality to adopt a policy), the coalition formateur (P) has more
flexibility to choose the coalition members that are closer to his own pref-
erences; if the voting threshold is high (such as in a qualified majority
scenario), any defecting coalition member (V) approaching the required
2/3 majority has the potential to threaten the survival of the coalition and
cancel the likelihood of policy change.1 Thus, P could take advantage of
voting thresholds by forcing simple majority votes on controversial issues.
Alternatively, P could use veto powers to block legislation and effectively
ask Congress to produce an absolute (2/3) majority if legislators want to
override the presidential veto.
A third determinant of policy change depends on the number of veto
players: the more players, the smaller the set of possible outcomes accept-
able to all parties that can improve over the existing status quo (Tsebelis
A Proposed Model for Legislative Cooperation 25
2002: 19–26). The addition of a new veto player will not increase the likeli-
hood of policy stability if its preferences already lie within the set of pre-
ferred points of other players (Tsebelis 2002: 25). 2 This is true, for instance,
if L already contains and represents the preferences and interests of V.
The size of players is another determinant of policy change. For exam-
ple, if the largest party (L) has a majority of seats in the legislature,
“it becomes a dictator within the legislature and a partisan veto player
in relation to the president”—if it is not already the president’s party
(P)—thus being able to make decisions without taking into account other
players’ ideal points (V) (Pérez-Liñán and Rodríguez-Raga 2003: 11). If,
on the other hand, the largest party has enough weight to become a nec-
essary partner in any coalition, it becomes a partisan veto player within
the legislature (2003: 11).
The effect of party unity on policy stability depends on the size of the
party and the ideological distance of this group from the existing policy
(SQ) (Pérez-Liñán and Rodríguez-Raga 2003: 13). A majoritarian and
disciplined party can be instrumental for policy change if its ideal point
is located away from the SQ and may potentially benefit from change, but
it could severely block any reform attempt if their ideal point is already
located at the SQ (2003). This is an important distinction to understand
whether low (or high) party discipline contributes to the formation of
policy coalitions: depending on its initial policy preferences, disciplined
parties could be critical support for the president’s proposed reforms, or
they could work to oppose reform and protect the SQ. 3 Finally, but not
least important, increasing ideological differences among veto players
or greater polarization around the SQ reduces the possibility for policy
change (thus reinforcing the SQ) (Tsebelis 2002). In the policymaking
game, a median location of P’s policy preferences in relation to other
players of policy change is likely to minimize gridlock situations.
An alternative approach to Tsebelis’s veto players theory is Krehbiel’s
theory of pivotal politics in presidential regimes. Here, the object of study
is not so much whether players can agree on policy change but rather out-
comes in which “at least a legislative majority wishes to move the SQ policy
in the same direction, yet it cannot do so” (Krehbiel 1998: 26).4 The con-
cept of gridlock offers a baseline concept that does not make normative
assumptions about a president’s preferred policy choice (1998: 26), or a
priori negative connotations about its occurrence. Gridlock outcomes are
not necessarily a bad thing: like Tsebelis’s notion of policy stability they can
be defi ned as stable equilibrium around the SQ.5 For the purpose of model-
ing coalition strategies in a presidential setting, the veto players approach
is more versatile for two reasons. First, it allows policy decisions to vary
along a two-dimensional space, whereas pivotal politics moves along one
dimension. Secondly, it allows the interaction between individual as well as
collective players (i.e. party leaders), rather than modeling legislatures that
are the sum of individual legislators.
INDIVIDUAL AND INSTITUTIONAL

INCENTIVES FOR POLICY CHANGE
Up to this point, the probability of policy change appears to be determined

by the alignment of players’ preferences in a given policy space, and how
their preferences relate to the location of the existing policy (SQ). But what
factors shape the preferences of veto players? And how do these prefer-
ences adjust when actors interact with one another? The following sec-
tion explores the conditions that motivate legislators—and presidents—to
cooperate with one another to produce policy change.
What do Legislators Want?

According to the literature, politicians want to maximize the utility derived
from a combination of four major ambitions: policymaking, office-seeking,
vote-seeking and rent-seeking. The ranking of these preferences and goals
would depend on legislators’ district of origin, party affi liation, electoral
rules, and legislative seniority (Fenno 1973; Mayhew 1974; Strom 1990;
Cox and McCubbins 1993; Ames 2001). Some scholars have argued that—
depending on the electoral structure of a country—party organizations may
be “instrumental” to help their members advance individual goals such as
crafting policy proposals, running for elections, gaining access to political
office and/or extracting government rents (Carey and Shugart 1995). For
example, politicians running for office in closed-list proportional repre-
sentation systems may be constrained to act within the party framework,
whereas individuals operating under personalized open-list electoral systems
or with weak restrictions from party membership may choose to indepen-
dently pursue their rent-seeking and vote-seeking goals outside of political
parties (Morgenstern 1996; Mainwaring and Shugart 1997). Other insti-
tutional constraints such as term limits or internal dynamics of candidate
selection may also help advance or hinder individuals’ expectations (Taylor
1992; Carey 1996). The theoretical assumptions about politicians’ priorities
and their implications for policymaking are fully developed in this chapter.
Suffice here to say that politicians’ goals are presumed to be interconnected
to a vote-seeking ambition, and even the most pork-oriented legislators can
maximize their particularistic interests by retaining office in Congress or
elsewhere (Mayhew 1974; Samuels 2003; Morgenstern 2004).
Policymaking Incentives
Spatial theories assume that policy issues—and policymakers’ preferences
about them—can be represented along a one-dimensional policy space (Hin-
ich and Munger 1997; Krehbiel 1998).6 Depending on the policy context,
legislators’ preferences for market-oriented reforms, for example, could be
depicted along an ideological continuum that goes from left (opposition)
to right (favor). In making his or her decision to support (oppose) a pro-
posed policy, spatial theories claim that legislators compare the “ideologi-
cal” distance between the president’s proposed bill and their ideal policy
preferences. Other important criteria to consider are the position of the
current policy (SQ), and the official policy preference of his or her political
party (Morrow 1994). All other things being equal, a legislator will support
the government policy—and along the party lines—when a) the president’s
preference, the party’s and the legislators’ all lie to the left or right of the
SQ, b) the legislator’s policy preferences are identical to the party’s, and
c) the policy differences between the legislator’s and the president’s ideal
points are smaller than the differences between the legislator and the cur-
rent policy.7
Institutional or Office-Seeking Incentives

Another ambition of policymakers is to seek political office from which
they can directly influence policy decisions, allocate rents and distribute
patronage. Depending on the political context of each country, the range
of available political offices may range from cabinets and sub-cabinet
appointments, to diplomatic or sub-national appointments. When decid-
ing in favor or against cooperation with the executive, legislators would
compare the number and nature of government portfolios offered by the
president to their party with the expected gain from winning office by
them.8 Naturally, this ratio evolves as new elections approach: at the
beginning of a presidential term, opposition parties and legislators have
greater incentives to accept portfolios from and share power with the
president, but as new elections approach, the opposition would prefer to
go alone and dismantle any government coalition, especially if presidents
are bound by term limits.
Distributional or Rent-Seeking Incentives

The allocation of distributional or particularistic payments can be a
determinant factor to persuade pivotal legislators to vote in favor of the
president’s proposal. Depending on the nature of a policy vote, presidents
may persuade legislators to support policy proposals they would normally
oppose, by compensating their concession with some non-policy incentives
such as pork or cash transfers for themselves and their districts. The pos-
sibility of a tradeoff between policy concessions with non-policy incentives
is not normally contemplated by one-dimensional spatial models. The opti-
mal level of required compensation will depend on the number of votes
needed to secure a voting majority. The narrower the vote, the higher is
the probability that each additional (marginal) vote will become critical to
make or break the required majority, and therefore the more expensive the
vote will become (Groseclose and Snyder 1996).
Vote-Seeking Incentives
There are many proxies to measure vote-seeking incentives, depending on

the ability or willingness to reelect, the candidate’s position on the list, the
candidate nomination procedures, the size of the district, the competitiveness
of the race and so on (Morgenstern 1996). Even in the absence of concrete
legislative reelection incentives (in the case of term limits), maintaining a
good public image vis-à-vis a potential electorate (i.e. by advertising, credit-
claiming or position-taking), is always a valuable electoral asset to increase
the possibility of future electoral success in the legislative or another political
arena (Mayhew 1974; Lujambio 1995; Carey 1996). In all cases, a legislator’s
electoral reputation is a valuable asset in a vote-seeking context.
How can legislators maximize their ability to maintain or boost their
electoral reputation in a political context where they do not have a spe-
cific political responsibility, or their actions are not directly visible by the
voters, such as in a multimember district? David Mayhew argues that in
the absence of policymaking or credit-claiming opportunities, legislators
may choose to engage in position-taking or public advertising activities—
publicity stunts—to maintain a good electoral reputation (Mayhew 1974;
Magar 2001). Thus, under low visibility conditions, a public advertising or
“wing-flapping” strategy may compensate legislators’ need to boost their
own electoral prospects.
Another variable affecting legislators’ electoral reputations—and
therefore their willingness to cooperate—is the president’s job approval
ratings. If presidents do well in the polls, popularity carries a favorable
effect for the legislators’ own electoral prospects and they will be more
likely to collaborate with the president’s proposed policies and boost their
own electoral reputation. If a president does poorly in the polls, however,
it would be in the interest of legislators to deny any association with the
president or maintain a prudent distance from the president’s policies in
the case of government legislators. In the context of unpopular presidents,
“wing flapping” strategies from opposition legislators (to further criticize
or trigger a scandal on an already unpopular president) may yield politi-
cal benefits for the individual legislator and erode political opportunities
for coalition-making.
What do Presidents Want?

Different from legislators, it is difficult to assume that presidents are
solely motivated by vote-seeking incentives, judging by the diverse career
paths followed by politicians after they complete their term in office. It is
more realistic to assume that presidents may be interested in maximizing
their policymaking goals; in the case of the adoption of market-oriented
reforms, policy success was critical to ensure domestic popularity as well
as international recognition. In order to maximize success in promoting
economic policies, presidents would ideally want to make the fewest pos-
sible policy concessions or minimize the amount of side payments given
to opposition parties. This model assumes that in submitting legislation
to Congress, presidents would need to consider two questions: how much
legislative support they need—to pass legislation—and what is the policy
cost of gathering such votes in Congress.
Gathering Legislative Majorities

In the absence of legislative dictators (parties that have the majority of seats in
the legislature), minority presidents face the challenge of crafting legislative
coalitions for reform. The main coalition criterion is the ideological affi n-
ity between the policies defended by opposition parties and the president’s
agenda of reforms. The greater the policy convergence, the smaller would be
the policy concessions required to secure legislative votes. To gather addi-
tional legislative support, presidents enjoy a wide range of bargaining chips
or coalition incentives ranging from policy concessions to allocating cabinet
portfolios, pork and patronage (Cox and Morgenstern 2002).
A fundamental premise of this model is that the “price” that presidents
are willing to pay for gathering legislative support from the opposition
will be, holding other things equal, proportional to the “reliability” of
potential legislative support. The notion of a reliable majority combines
the numeric criteria of votes needed to pass legislation and the extent to
which the party has the cohesion to support what the president wants
(Coppedge 2003).9 It matters less if the president enjoys the nominal sup-
port of a large party in Congress if the party is not internally cohesive;
conversely, a tightly disciplined party would be less critical for coali-
tion formation if it contributes with fewer votes to pass legislation alone
(Coppedge 2003). A measure of reliable partisan support combines the
legislative agent’s size and its unity scores along a single dimension. Thus,
a highly reliable agent would be a large disciplined party, whereas one
individual legislator would be a least reliable agent because, under certain
conditions, it has the potential for making or breaking a majority.10 The
reliability of a legislative coalition would therefore be the sum of the num-
ber of members in coalition parties, factions and individuals, multiplied
by their discipline scores.
Figure 2.1 depicts the different costs of making legislative coalitions. The
horizontal axis represents all the possible payoffs available to the president
arranged from the most particularistic to the most programmatic ones.
Payments are clustered around four basic types: a) power-sharing positions
(cabinet positions, control and electoral authorities, and even Supreme
Court judges), b) policy concessions, c) patronage, and d) pork and particu-
laristic rents. The vertical axis plots the reliability of legislative support.
The range goes from the least reliable or unpredictable agent (an individual
legislator) to the most reliable (a large and disciplined party).
The first layer of coalition incentives is made up of power-sharing agree-
ments offered to reliable legislative parties. Inspired on parliamentary mod-
els of coalition formation (Laver and Schofield 1990; Strom 1990; Muller
and Strom 2000), some scholars of presidential systems have focused on
the “programmatic” dimension of coalition-making: the extent to which
presidents can propose power-sharing agreements to the opposition (e.g. by
allocating cabinet portfolios) as a mechanism to strengthen the president’s
legislative coalition (Coppedge 1994; Amorim Neto 2002; Siavelis 2002).
The implication is that presidents can secure the support of large ideological
parties by making significant policy concessions of national implications.
Supporting this idea, Michael Laver and Norman Schofield argue that “cab-
inet positions are the most important policy concessions granted” to legisla-
tive parties (1990: 56). The dotted line around policy concessions in Figure
2.1 represents the often-blurred separation between making policy conces-
sions and making more formal power-sharing agreements with coalition
partners. A classic example in Latin America is the Chilean Concertación, a
coalition of several center and center-left parties whose leaders consistently
sustained power-sharing and policymaking agreements as mechanisms to
surmount institutional constrains and cement coalitional trust (Siavelis
2002). Other relevant examples are the power-sharing and policymaking
agreements established in Colombia (Frente Nacional) and Venezuela (Punto
Fiso) in the fifties (Coppedge 1994; Archer and Shugart 1997).
At the other end of the scale, scholars have argued that in the absence of
institutionalized or programmatic political parties, presidents grant particu-
laristic rewards such as pork, patronage or rents to purchase legislative collab-
oration from regional parties, factions or individual mavericks (Mainwaring
1999; Ames 2001). Edward Gibson and Ernesto Calvo explain how Argentin-
ean President Menem assembled “cheap coalitions” with the support of repre-
sentatives from—over-represented—rural provinces in exchange for relatively
Figure 2.1 Size matters: legislative support and coalition payoffs.

minor government transfers to those rural areas (2000).11 Another example is
Brazil, where “presidents cultivate the support of governors and ( . . . ) mayors
of major cities because they are powerful political figures who shape public
opinion, have loyal political acolytes of their own, and can drum up legislative
support” (Mainwaring 1999: 190; Amorim Neto and Santos 2001). Particu-
laristic payoffs granted to individual legislators took the form of city or local
government jobs for family members, granting business concessions or other
types of government permits and distributing cash from discretionary funds
available to the president (Mainwaring 1999; Raile et al. 2006). Chapter 5
provides a detailed scheme and examples of available payoffs, the nature of
the beneficiaries, and the territorial scope of payments.
Reducing the Cost of Legislative Support

Recall that the required majority to produce policy change is set by a legal
voting threshold that ranges from a simple plurality to voting unanimity.
The threshold is calculated as a share of the total number of legislators. The
lower the voting threshold (absolute or simple majority), the more flexibility
has the president in choosing different coalition members (Tsebelis 2002);
the higher the threshold, and any defection from the assembled majority may
be enough to kill the coalition (thus increasing the blackmailing power of
pivotal players) (Cameron 2000; Magar 2001). Presidents may reduce the
effective majority needed for policy change in two ways. One possibility is to
lower the voting threshold by using veto powers and sustaining their decision
with enough votes to break the assembly’s required qualified majority (with
the votes of 1/3 +1 legislators in the case of a 2/3 override veto) (Tsebelis and
Alemán 2003; Tsebelis 2002). The other way is to lower the necessary quo-
rum to approve legislation, by encouraging vote abstentions and increasing
the relative value of effective votes (Carey 2007). Note that the same logic
applies in the reverse scenario, since presidents can also (and usually do) dis-
band the necessary quorum in order to prevent unwanted policy changes.
BUILDING COALITIONS IN FRAGMENTED DEMOCRACIES
Presidents who lack the support of a single-party majority in Congress have

an ample range of political rewards (“treats”) and constitutional preroga-
tives (“threats”) to promote and sustain reform coalitions with opposition
parties. Much of the scholarly attention has focused on the presidential use
of these “treats” and “threats” and their impact on policy changes (Main-
waring and Shugart 1997; Morgenstern and Nacif 2002). With few excep-
tions, however, scholarly approaches have failed to capture the subsequent
strategic interactions that take place between presidents and legislators when
bargaining for policy reforms in a fragmented legislature. From this perspec-
tive, it is relevant to ask: why and when do presidents offer programmatic
instead of clientelistic payoffs to potential partners? When do presidents
privilege coalitions with party blocks as opposed to individual legislators?
Why and when do parties (or legislators) accept or refuse coalition incen-
tives? Can presidents, parties or legislators monitor and enforce coopera-
tion agreements and how do they do it?
To account for these strategic interactions over time, I propose an alter-
native coalition-making model around two critical dimensions. The fi rst
dimension focuses on the coalition-making incentives, that is, the ability
that presidents and legislative agents have to exchange coalition incentives.
The second dimension focuses on the liability of making coalitions, that is,
the factors that encourage or deter legislative agents to cooperate with the
president. Given a fi xed set of coalition incentives, this dimension explores
which factors would make legislators more willing to accept payoffs and
cooperate with the government and one another.
Crafting Optimal Payoffs

Presidents can successfully pass legislation through Congress when the pay-
offs and concessions granted to legislative partners (parties or individuals)
do not impose a heavy toll on their policy objectives. Ideally speaking, pres-
idents would be able to minimize the costs of legislative support if they can
anticipate payoffs according to the ambitions and preferences of legislative
players. Recall the proposed game between three ideal players, a president
P, a party leader L, and an individual and potentially pivotal legislator V.
Between these actors, there are three sequential sub-games worth explor-
ing: fi rst, the president offers a bargain to the party leader (P-L); the party
leader, in turn, offers a bargain to the individual party member (L-V); and
the individual legislator can, in turn, accept the party bargain or seek an
independent agreement with the president (P-V). In making their decisions
to cooperate with one another, players select the choices that best advance
their own interests, given the actions of the third one. Given conventional
game theoretical assumptions, the ideal bargaining outcome is found
through backwards induction, that is, the solution to the game depends on
the choice made at the last decision node (Morrow 1994). In this case, the
solution to the game starts with the individual’s decision to cooperate with
the president or the party leader; that will influence, in turn, the leader’s
decision to cooperate with the president; and the outcome will inform the
president’s decision to negotiate with a party leader or to make independent
offers to individual legislators.
The Decision of a Pivotal Legislator

A legislator’s utility function depends on the combination of ideologi-
cal (policy), institutional (office), and distributional (pork) concerns.
Electoral concerns (votes) are temporarily held constant since legisla-
tors’ future electoral (political) ambitions are assumed to be a permanent
concern affecting all other payments. It was already argued that the leg-
islator’s decision to vote on a given issue will be primarily determined
by the proximity of his or her ideological preferences. The same consid-
eration should apply if the legislator is considering a vote between “her
own conscience” and the party line; assuming that policy differences
between the party and individual are significant, the legislator would
choose to vote sincerely unless voting with the party leader is able to help
advance his political career in some other way. Confronted with a deci-
sion of voting with the party leader or the executive (assuming legisla-
tors are indifferent between the two policy options), other considerations
such as the value of government posts or the possibility of obtaining par-
ticularistic rents may tilt the legislator’s vote. Recall that the magnitude
of the compensation offered to an individual legislator would depend on
the perceived gap needed to complete a legislative majority: when more
votes are needed to complete a majority, the lower is the offered indi-
vidual compensation.
The Party Leader’s Decision

The party leader’s ability to maintain or advance her own political ambi-
tion depends on her capacity to advance the political ambitions of the
rank and fi le. Failure to provide selective and collective goods to the rank
and fi le may contribute to party disarray and eventually her replace-
ment as the party leader. Confronted with a presidential offer to form
a government coalition, the leader compares the expected political gain
from having access to cabinet portfolios, policy concessions, pork and
patronage with the expected electoral benefit of appearing as a party
that remained independent from the government, right before the next
election.
As with the previous, the fi rst voting criterion is ideological: the party
leader would vote with the president when the party’s policy position is
closer and on the same side as the president’s. When policy differences
are not significant or leaders are indifferent between the two, their vote
is decided by the availability of other incentives, inasmuch as the value
of portfolios, policy concessions and the availability of side payments are
enough to compensate the collective demands of the rank and fi le.
The underlying logic behind the party leader’s decision is one of con-
ditional leadership. Recall that presidents would prefer to negotiate with
and concede greater coalition payoffs to larger and disciplined parties.
But party leaders in turn, would only bargain agreements that are accept-
able to the rank and fi le; otherwise, disaffected legislators may disband
party unity.
The President’s Decision
Recall that the president’s policy objectives are best served when they can
minimize the costs of assembling legislative majorities. The president’s
decision-making process is comparable to that of an investment manager:
they both need to calculate which combination of investment strategies (bar-
gaining with party leaders or individual legislators) is likely to yield the high-
est returns (legislative votes). Investors (or presidents) could pursue a more
conservative strategy, investing in pension funds with predictable and fixed
return rates (i.e. sharing power with a reliable political party), or they could
invest in a high-uncertainty emerging market fund that could yield higher
returns but with much more uncertainty (i.e. buying cheaper votes from indi-
vidual legislators). Presidents, like investors, would tend to diversify risks and
select their investments depending on the expected return and past perfor-
mance of funds (i.e. party size, party unity, and past performance).
The fi rst decision criterion is ideological. When submitting a policy pro-
posal, presidents compare their proposed policy with the ideological posi-
tion of the median legislator. As long as they can effectively anticipate the
preferences of the legislative majority (e.g. raise legislative salaries), legisla-
tion is passed by its own merits and no additional bargaining is necessary.
When policy proposals are not acceptable to the median legislator, presi-
dents would seek to compensate possible allies by offering policy conces-
sions, allocating cabinet or government portfolios, or distributing pork and
patronage. Policy concessions can be made in the same or alternative areas
to the proposed legislation. Presidents can offer cabinet and sub-cabinet
portfolios and regional, local or city government offices, as well as a wide
range of particularistic payments. In all cases, the value of payoffs depends
on existing legislative fragmentation (more coalition partners demand more
payoffs) and the perceived closeness of a vote.
All other things being equal, presidents would allocate coalition incen-
tives according to the size and discipline levels of legislative agents; thus,
the leader of a large and disciplined opposition party would have greater
bargaining power than a large but undisciplined party. The compensation
offered to an individual legislator, assuming that he or she is not contained
within an allied party cluster, would be proportional to the decisiveness of
that additional vote. However, if enough independent legislators regroup
to form a legislative faction, they could improve their collective bargain-
ing power vis-à-vis the president. The resulting bargaining game would
resemble the decision-making process between P and L.
Party Leaders as Coalition Brokers

In a bargaining game with perfect information, presidents would be able
to anticipate legislators’ goals and demands and respond accordingly by
selecting an optimal allocation of coalition payoffs according to their
political ambitions and the expected level of support.12 In the context of
multiparty competition, however, legislators’ preferences are more difficult
to predict and their bargaining strategies are harder to anticipate. Party
leaders have the potential to mediate between the president and individual
legislators: they can better anticipate the preferences of the rank and fi le,
thus providing a useful information shortcut to the president, but they can
also bargain collective agreements with the president on behalf of indi-
vidual party members.
Party leaders play a double role for articulating legislative support for
the president and distributing coalition incentives among party members.
As discussed earlier, presidents would offer greater coalition incentives to
larger, more cohesive parties (see Figure 2.1). Leaders in turn could distrib-
ute payoffs to the rank and fi le. For instance, local caudillos that demand
government patronage would also have some access to distributing favors
and particularistic benefits to loyal legislators from their province. Party
leaders negotiating policy concessions at the national level would have a
distributive impact on the strongholds of their provincial caudillos. And
leaders who negotiate power-sharing agreements not only gain consider-
able independence to influence policymaking from within the executive,
but they could also distribute pork, patronage and rents to their followers
as an added value from holding political office. In this sense, party lead-
ers are regulating valves that gauge the president’s need for votes with the
party’s political demands. Inasmuch leaders are able to effectively whip
disciplined voting, they can strengthen the party’s bargaining power vis-
à-vis the president.
The previous discussion suggests that even in a fragmented legislative
setting, a president’s dominant coalition-making strategy would be to
negotiate with party leaders. Parties reduce the uncertainty and the costs of
making legislative transactions while they ensure a degree of predictability
or continuity during the coalition-making process. The alternative option,
to form coalitions with independent legislators, would be a suboptimal
choice, provided that, a) partisan coalitions have failed, and b) presidents
can minimize the uncertainty and costs of purchasing individual votes.
Presidents can achieve the latter by either lowering the effective threshold
to approve policy or by assembling a super majority that reduces the black-
mailing power of marginal legislators. Oftentimes, voting with individual
legislators is a strategy to complement, not replace, the need for assembling
partisan coalitions.
Reducing Coalition Liability

Thus far, the discussion about policymaking strategies assumes that reform
coalitions take place when presidents are able to identify the preferences
of partisan allies and offer them the policy, political and material incen-
tives necessary to assemble a legislative majority. But even an abundance
of coalition incentives does not solve the inherent dilemma of presiden-
tial democracies: Why would opposition parties and legislators be willing
to vote with the government without being part of it? In the absence of
formal power-sharing agreements, it would be suicidal if an opposition
party were willing to support government policies (Linz and Valenzuela
1994; Lujambio 1995). If cooperation produces successful policies, presi-
dents would tend to monopolize all the gains; however, if policies fail, the
blame would be shared with or attributed to the congressional opposition
(Lujambio 1995: 61–2).
While opposition politicians would prefer to avoid the liability of vot-
ing for the government policies, they also need to secure the means to their
political survival. In a two-party democracy, legislators are directly iden-
tifiable and responsible to voters for their policymaking decisions. But in
multiparty legislatures, legislators become less accountable to voters and
their responsibility for policymaking is more diffuse. As a result, legislators
may have greater freedom to disregard policy goals and openly engage in
rent-seeking activities (Morgenstern 2004). This does not mean, however,
that legislators in fragmented legislatures stop caring about their constitu-
ents; even modern bandits “who want to maximize their plunder (for self-
ish or altruistic ends) must work to maintain their electoral popularity”
(Morgenstern 2004: 3).
Public opinion is a critical and understudied aspect that affects legis-
lators’ willingness to cooperate with the government. Downward swings
in presidential popularity (according to job approval rates), for example,
would reduce the legislators’ willingness to form government coalitions
(Pérez-Liñán 2007). Negative public opinion would also affect the value
of coalition incentives (cabinet positions, policy concessions), especially if
legislators do not want to share the responsibility for the policies that presi-
dents make.
In a political context where presidential reelection is banned, the reputa-
tional cost of making government coalitions imposes a unique cooperation
dilemma for legislative agents. Legislators and their political parties could
gain access to government coalition incentives but confront the electoral
consequences of being identified as part of the “government coalition.” Or
they could maintain a position of political independence but give up the
coalition payoffs that are needed to cultivate their political survival. How
were politicians able to benefit from government cooperation without being
liable for their own policy choices?
GHOST COALITIONS
In the absence of valuable coalition incentives, governments and legislators

devised informal mechanisms or ghost coalitions that allowed them to rec-
oncile the cooperation dilemma and benefit from the best of both worlds.
Ghost coalitions were systematic agreements that facilitated the exchange
of votes and payoffs among policymakers while avoiding the political lia-
bilities associated with formal power-sharing schemes. Legislative agree-
ments were often short-lived and built around specific policy issues. The
public image of political independence was maintained through a series
of publicity stunts, including credit-claiming, position-taking and other
“wing-flapping” activities that allowed legislators to be passive doers but
very loud speakers (Mayhew 1974). Legislators were also able to conceal
their government support if votes were not publicly recorded (due to the
absence of electronic voting or roll call mechanisms), or recorded votes—in
the form of blank votes or abstentions—contributed to supporting govern-
ment majorities.
The existence of informal or clandestine agreements has been repeatedly
acknowledged by scholars in other—particularly but not exclusively—
fragmented polities, both in the presidential and parliamentary tradi-
tions. After interviewing legislators in ten Latin American countries,
John Carey suggested that presidential influence over executive-legislative
exchanges would be significantly diminished if it were constantly exposed
to public scrutiny (2002). Commenting from the European experience,
Kaare Strom (1990) talked about how several coalitions were facilitated
by clandestine negotiations in Ireland and Italy. Carol Mershon further
argued that Italian coalitions were partly made possible by lowering their
cooperation costs (Mershon 1996). Guiseppe DiPalma relates how certain
Italian parties’ “omission to vote” was a frequent and effective way of
supporting (government) legislation (1977: 59). Finally, in talking about
minority governments, Laver and Schofield argue that opposition parties
calculated the benefits of influencing policy outside the government, to
ensure “lower costs of governing” (1990: 74–5). While these events are
often reported as marginal or suboptimal occurrences—with the excep-
tion of Carol Mershon—evidence suggests that the presence of informal
or clandestine coalitions was a systematic phenomenon that responded
to concrete institutional (dis)incentives for executive legislative coopera-
tion. The advantage of adopting a systematic approach to the workings
of informal coalitions is to better understand the conditions under which
coalition incentives are negotiated, policy agreements are reached and
legislative coalitions are maintained over time.
The Gray Dimensions of Coalition-Making

The introduction of ghost coalitions helps expand our existing under-
standing of coalition-making strategies and institutional dynamics of
policy reform. A fi rst dimension relates to the distribution of particu-
laristic and programmatic cooperation incentives to legislative partners
according to their size and levels of voting discipline. A second dimension
discusses the mechanisms available to reduce the visibility of government
coalitions, enabling legislative partners to advance their political goals
while avoiding the electoral costs of voting with the president. Table 2.1
offers a four-fold typology of coalition-making strategies.
In the realm of the payoffs (horizontal axis), the typology shows that
presidents could offer “programmatic” deals to potential coalition partners
by making significant policy concessions, allocating cabinet members, or
a combination of both, or they could use discretionary authority to offer
“particularistic” payoffs to coalition members such as making individual
favors, allocating sub-cabinet jobs, or granting permits, licenses and per-
sonal favors. Along the second dimension, presidents could formalize leg-
islative cooperation by appointing opposition ministers or by sponsoring
individual defections from opposition parties; conversely, the visibility of
government cooperation could be downplayed by crafting political agree-
ments that are approved by “silent” voting majorities, by allowing publicity
stunts from allied (opposition) partners, or by sponsoring silent defections
of opposition legislators on individual votes.
Most institutional explanations of coalition-making, often inspired by
the parliamentary experience, observe government coalitions are made of
ideologically close political parties who bargain significant policy conces-
sions and cabinet appointments with the president (Table 2.1, outcome b).
Deviations from that outcome are normally treated as marginal or subop-
timal, either because coalitions are not formed with political parties, or
because coalition exchanges are not fully observable. Table 2.1 suggests
that in a fragmented legislative setting, these scenarios become coalition
strategies in their own right. Thus, coalitions may be formed with the con-
tribution of party defectors, who may be enticed to vote with the president
in exchange of particularistic benefits and rents; the working premise is
that these payoffs would enable party switchers to advance their political
careers independently of their original party affiliation (outcome a).
In the realm of informal bargaining, presidents—and parties—would
still be interested in making policy concessions, and offer government post-
ings in exchange of reliable partisan support even if that required additional
maneuvers to maintain a public distance from coalition partners (outcome
d). In the absence of partisan agreements, presidents could promote party
Table 2.1 Formal and Informal Coalition Strategies Available to Presidents.
Nature of payoffs/ “Particularistic” “Programmatic”

Visibility of agreement (Patronage, Pork, (Cabinet allocation,
and Rent-seeking) Policy concessions)
Visible/formal a. Promoting party b. Forming partisan
defections coalitions
Clandestine/informal c. Promoting party d. Sponsoring ghost
dissent coalitions
dissent within opposition parties by offering selective incentives (rents and
patronage) to individual legislators (outcome c). Unlike party defectors,
however (outcome a), party dissidents do not openly challenge the authority
of the party leader but continue to vote with the party line on other issues.
Given the lack of electronic voting, it is also easier for voters to know when
their legislator abandoned the party rather than when he or she voted for a
particular policy initiative.
The addition of informal coalition-making strategies (a, c and d) offers
a systematic framework to explain the “brown areas” where policymak-
ing takes place in less institutionalized environments. Rather than treating
these alternative strategies as “deviations” from the conventional wisdom,
the rest of this book explains why observed practices are consistently dif-
ferent from the established formal rules.
Testing Model Implications

The following chapters empirically test the relevance of the theoretical
model using Ecuador as a case study. Given the complexity of factors inter-
vening in coalition-making strategies, there is no single structural model
that integrates all the factors at play. Testable predictions of veto player
frameworks are scarce in the literature given the controversial nature of
measuring policy positions, evaluating policy (revealed vs. observed) pref-
erences, calculating the number of veto players, the shape of their utility
preferences and so on.13 Nevertheless, some predictions about coalition-
making and policy change are evaluated “at the margins” by using compar-
ative statistics, running pair-wise comparisons, and calculating expected
likelihood of events given the presence of multiple factors.
A preliminary step is to determine whether the presence of constitutional
provisions like decree and veto powers increase the president’s agenda-
setting power when pushing for policy change. A direct implication for
policymaking is that minority presidents who can rely on constitutional
powers would use these powers to compensate for the absence of reliable
congressional support and avoid making coalitions with opposition parties
(Mainwaring and Shugart 1997).
Along the fi rst dimension, it is relevant to test whether reform coali-
tions are more likely to take place when there is a smaller ideological gap
between the president’s ideological position and that of the median leg-
islator. In other words, “the cheapest strategy will often be to cobble as
many legislative votes as possible purely on the merits, conserving other
assets (such as pork and patronage) for securing any necessary marginal
votes” (Cox and Morgenstern 2002: 446). The likelihood of policy change
will also increase if presidents prefer to assemble partisan coalitions
with party leaders instead of individual legislators. As discussed earlier,
presidents would prefer to bargain policy agreements with party leaders
because they would help reduce the transaction costs of coalition-making
(Kiewiet and McCubbins 1991). Voting with parties would maximize the
value of exchanging legislative payoffs while reducing the uncertainty of
pivotal players. An empirical implication is that partisan coalitions would
be more likely to be formed with larger, more disciplined legislative par-
ties when controlling for ideological affi nities.
A closely related implication is that party discipline per se is not suf-
ficient to bring about policy change in fragmented legislatures. Strong
leaders or caudillos could be important to deliver reliable legislative votes
to the government in exchange for coalition payoffs, but they could also
have a negative influence on policy change if they present a unified chal-
lenge to government initiatives from the opposition. Confronted with a
solid party opposition, presidents may fi nd it instrumental to encourage
opposition legislators to defect from their parties and accept selective
payments (vote-buying) to support government reforms. As discussed
earlier, individual vote-buying will take place with legislators whose
own policy preferences are closer or indifferent to the president’s own
ideal points, and vote-buying is used in the context of other legislative
strategies such as lowering majority thresholds, or enacting presidential
veto powers.
Along the second dimension of policymaking strategies, politicians’
job approval ratings are an important factor in the form and the likeli-
hood of policy change. During presidents’ “honeymoon” periods, when
high job approval rates capture people’s expectations about the new gov-
ernment, presidents are able to recruit potential coalition members at a
relatively low cost. The added reputation obtained from the president’s
own popularity, combined with the abundance of available coalition
benefits from the new government, would make legislators more likely to
form reform coalitions with the government. Conversely, lower presiden-
tial popularity, reflected by falling job approval ratings, would reduce the
legislators’ willingness to form government coalitions in public. Lower
presidential popularity would also make the formation of ghost coali-
tions more likely as they enable legislative agents to maintain a public
distance from the government while reaping the benefits of government
collaboration.
Finally, the proximity of new elections in the presidential system affects
the prospects of coalition-making in two ways. As time elapses, govern-
ment resources become scarce, government jobs are already allocated and
policy concessions are constrained by exogenous factors, thus eroding
the value of coalition payoffs (Magar 2001). Secondly, the presence of
new elections gives ambitious politicians fewer incentives to be associ-
ated with incumbent lame duck presidents (Coppedge 1994). A concrete
implication for coalition-making is that new elections are likely to erode
parties’ willingness to support reforms in public; if policy change takes
place at all, this will take place with the public and clandestine contribu-
tion of maverick legislators.
SUMMARY AND CONCLUSIONS
The ghost coalition framework offers two contributions to the existing under-
standing of coalition-making in fragmented settings. First, it provides the
basis for understanding the strategic and repeated interactions that take place
between presidents, party leaders and individual legislators. Far from under-
standing the policymaking process as a chain of discrete choices between two
branches or multiple political parties, the framework illustrates that legislative
cooperation could be modeled as a sequence of bargaining games between
three ideal players. First, there is a negotiation between the president and a
party leader; its success depends on the bargaining outcome between the leader
and the individual legislator; and this in turn depends on the direct bargain
between the president and the individual legislator. In equilibrium, the strate-
gic game suggests that even in a fragmented setting, a self-interested legislator
would prefer to accept the brokering services of a party leader to mediate the
political exchange with the president. Presidents, in turn, would also privilege
the intervention of a party leader in legislative bargaining because it has the
potential to reduce the bargaining time and risk involved with negotiating
with individual legislators. The strategic emergence of a legislative broker,
which is empirically demonstrated in subsequent chapters, is an important
contribution to understand unexpected patterns of party unity, the adoption
of programmatic agreements and the unexpected resilience of political parties
in highly fragmented legislatures.
A second contribution of the ghost coalition framework is to uncover
the gray areas of coalition-making in fragmented settings. While the per-
sistence of systematic and clandestine agreements between government and
legislators is not undocumented in contemporary democracies, this chap-
ter argues that the public dimension (visibility) of coalition-making would
directly affect the legislators’ willingness to cooperate with the government
and one another. The chapter illustrates the ways in which ghost or clan-
destine coalitions can allow legislative agents to benefit from government
cooperation payoffs while avoiding the reputational cost of voting with
government proposals. As it will be illustrated in subsequent chapters, the
notion of ghost coalitions helps to explain the presence of vote-buying inci-
dents, party switching, “tolerated dissents,” and “silent majorities” as a
series of calculated and strategic choices rather than a sequence of undesir-
able or dysfunctional events.
3 Presidential Success in a
Fragmented Legislature
“In Ecuador being a president is like playing a game of greasy pole

(palo ensebado): when the game starts, everyone helps the climber,
they lend their shoulders, and support him until he is close to grab-
bing the prizes. When he is close to success, everybody wants to bring
him down.”1
This chapter offers a fi rst empirical assessment of presidential success in

Ecuador. Consistent with institutional predictions and comparative evi-
dence, Ecuadorian presidents have one of the lowest bill approval rates
in the region: approximately 42% of the submitted bills got approved by
Congress between 1979 and 2002. This policy rigidity results from the
difficulty of making policy coalitions with a highly fragmented and diverse
legislature. The congress in Ecuador features some of the most severe party
fragmentation scores in Latin America (Payne et al. 2002), due to consider-
able ethnic, regional and ideological differences and a highly permissive
electoral system (Pachano 2006; Jones and Mainwaring 2003).
Yet, a closer analysis of the executive-led bills of economic reform initi-
ated during this period shows some provocative fi ndings. Presidents who
had no congressional support increased their chances of legislative success
when they used veto and decree powers, but surprisingly, presidents used
these legislative prerogatives in only a third (35%) of the total number of
bills submitted. The rest were negotiated through the regular legislative
process.
Consistent with the model proposed in the previous chapter, there is
empirical evidence to suggest that presidents bargained economic reform
coalitions with party leaders in the opposition. The empirical analysis
confi rms that the size of the government coalition mattered more than the
size of the president’s party itself. In fact, for Ecuadorian presidents who
lacked a single party majority in Congress, having a larger party plurality
was counterproductive for presidential success, possibly because it reduced
the incentives to seek policy partnerships with opposition parties. Consis-
tent with model predictions, the ideological proximity between presidents
and coalition partners was an important factor to explain increased presi-
dential success. The model also suggests that presidents engaged in direct
negotiations with individual legislators to promote policy changes. The
Presidential Success in a Fragmented Legislature 43
data shows that a higher incidence of individual party defections (party
switchers) was associated with increased legislative success.
The following section discusses existing approaches to analyze presiden-
tial strength and its implications to understand policy change. The next
section discusses methodological problems for analyzing presidential suc-
cess and subsequently uses a logistic model to analyze the political determi-
nants of policy change in Ecuador. The fi nal section discusses the effect of
constitutional reforms on legislative approval in Ecuador.
PRESIDENTIAL SUCCESS AND POLICY CHANGE
The notion of presidential strength, best defined as the president’s ability

to put his or her own stamp on policy, is a critical concept to understand
different types of presidential powers and variations within presidential
democracies across Latin America (Mainwaring and Shugart 1997: 40).
Important variations in the allocation of constitutional and partisan pow-
ers, Scott Mainwaring and Mathew Shugart argue, had an impact on the
levels of conflict and cooperation between the executive and the legislative
(1997). Constitutional powers, for example, enabled presidents to control
the legislative agenda by defying a new policy proposal (proactive powers)
or maintaining the status quo (reactive powers).2 The configuration of par-
tisan powers determined the extent to which presidents could rely on the
legislative support of large and disciplined parties to pass proposed reforms
(Coppedge 2003). A brief survey of presidential powers across the region
shows that constitutional powers tend to have a stronger presence in coun-
tries where partisan powers are weak and vice versa. Presidents compensate
for their weak partisan support by relying heavily on their constitutional
powers to push their congressional agenda by virtue of vetoes and decrees,
as in the case of Ecuador or Brazil (Tsebelis and Alemán 2003), whereas
presidents with strong partisan backing in Congress can usually do without
strong constitutional powers to advance legislation, as in the case of single-
party domination in Mexico (Weldon 1997). Besides constitutional and
partisan powers there are other factors that have contributed to presidential
success, such as the inclusion of opposition parties in the government cabi-
net (Amorim Neto 2002). Presidents also tend to have higher probabilities
of legislative success at the beginning of their terms, whereas incentives for
executive-legislative cooperation evaporate as new elections approach (Alt-
man 2000).
Assessing Success in Comparative Perspective

One way to assess patterns of confl ict and cooperation between the exec-
utive and the legislature is to compare presidential success rates across
countries. Success rates are no more than a ratio between the number of
executive-initiated bills approved in the legislature, and the total number
of bills introduced by the executive (Cheibub and Limongi 2002; Saiegh
2003). The proposed measure is not exempt of criticism but it does offer an
intuitive way to compare how institutional variables and congressional pro-
cedures affect the likelihood of approving laws across different countries.
One important criticism of using success rates is that the outcomes do
not discriminate according to the different nature and scope of bills, since
initiated—and approved—bills could relate to anything from inconsequen-
tial resolutions and minor amendments to existing laws, to the creation of
new districts, and more controversial issues such as decentralization, priva-
tization, economic or even constitutional reforms. Although this problem
cannot be easily corrected in a cross-national analysis, one way to address
this issue is by focusing the analysis on specific sectors, such as bills related
to fiscal or labor reforms in a given period of time. A second problem of
measuring success rates is that they report legislative initiatives actually
presented to Congress, but fail to account for other proposals that remain
latent in the president’s agenda. If presidents were able to accurately antici-
pate the legislators’ preferences, it is reasonable to expect that they could
successfully “stave off” conflicts by only sending bills acceptable to the
legislative majority (Krehbiel 1998; Cameron 2000; Cox and Morgenstern
2002). By contrast, a most inefficient strategy would be to pretend that the
legislature “does not exist and propose whatever policies (the president)
likes, then react spasmodically when the legislature refuses its assent” (Cox
and Morgenstern 2002). If presidents develop an “anticipated reactions”
approach, the number of bills they submit would depend on the likeli-
hood of bills being considered or approved by Congress. To this extent, the
empirical analysis considers whether presidents submit fewer bills towards
the end of their terms in anticipation of congressional defeat.
Figure 3.1 reports the relationship between the number of bills proposed
by the executive and the number of executive-led laws approved during
different legislative periods in Argentina, Brazil, Chile, Colombia, Costa
Rica, Honduras, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela
(Saiegh 2008). Despite the different time frames for comparison, the empir-
ical account of legislative productivity in a dozen countries reveals how
the interactions between constitutional and partisan powers of presidents
influence legislative outcomes. On the one extreme, single-party Mexico
stands out as a case of a dominant president with a subservient (rubber
stamp) assembly approving an average of 96% of his agenda (Casar 2002).
Despite their weak allocation of constitutional powers, Mexican presidents
were able to dominate the legislative agenda thanks to the solid base of par-
tisan support offered by the Institutional Revolutionary Party (PRI) (Wel-
don 2002). The overwhelming predominance of the executive in Mexico
dwarfed the success rate of political parties who initiated bills (14.9%).
With the transition to a more competitive party system in 1997, the success
of Mexican presidents was diminished as they had to compromise with
Figure 3.1 Average presidential success rates in nine Latin American legislatures
(various years).
opposition parties by adopting more moderate positions in the legislature

(Nacif 2003). Paraguay and Honduras also show a high rate of executive
success (of 83% and 79% respectively), which in both cases is consistent
with the traditional predominance of the executive branch and the military
over the policymaking process in the legislature.
A second cluster of countries represents cases where coalition politics,
broad political agreements and inter-party consultations help explain mod-
erate to high rates of executive success. Despite a highly fragmented party
system, Brazilian presidents have managed to achieve presidential success,
partly through the use of executive decree authority (medidas provisorias),
but also thanks to a consistent presidential effort to build legislative coali-
tions with the support of opposition parties, especially since the Cardoso
administration (1995 and onwards) (Raile et al. 2006).
During the Pacto de Punto Fijo years (1959–1989), the two main Ven-
ezuelan parties (AD and COPEI) moved towards the ideological center,
bridging their programmatic differences and promoting a common political
agenda that would allow their presidential candidates to alternate in power
(Coppedge 1994). Even though Venezuelan presidents had weak constitu-
tional powers by Latin American standards, their relative high degree of
legislative success (67.84%) was further secured through a rigid party dis-
cipline in Congress (Mainwaring and Shugart 1997; Shugart and Carey
1992).3 In Uruguay, the control of the Colorado party over the traditional
two-party system helps explain a moderate level of presidential success dur-
ing the period at hand. In addition to their significant partisan powers,
Colorado governments also enjoyed strong veto powers and exclusive intro-
duction prerogatives (Mainwaring and Shugart 1997). The story of Chile’s
Aylwin administration (1990–1993) also suggests the relative success of the
executive (62.78%) is related to the president’s ability to exert conditional
leadership on the congressional parties that compose his base of support
(Siavelis 2002). Different from Venezuela, Chilean presidents enjoyed tre-
mendous constitutional powers to legislate, but presidents preferred to rec-
oncile policy differences with the legislature to maintain the unity and the
support of the center-left parties that were part of Concertación. In both
cases, ensuring congressional support through conditional leadership was
more relevant to obtain executive success than the use (or absence) of con-
stitutional powers. According to Ana María Mustapic, executive success
in Argentina is partly explained by the use of constitutional powers and
the distribution of selective and collective benefits to potential government
supporters (Mustapic 2002). A similar case can be made for the Peruvian
case during the period at hand, where President Alejandro Toledo had to
bargain legislative support with an array of different legislative parties. In
the case of Colombia, Mónica Pachón argues that there is an implicit com-
promise between legislators approving issues pertaining to the president’s
national agenda as long as they can also claim credit for passing laws rel-
evant to their localities (Pachón 2003).
At the opposite end of the spectrum, legislators have few incentives to
collaborate with the president’s agenda, with resulting low levels of legisla-
tive success. Ecuador conforms to the description of imperial (or sometimes
impotent) presidents who struggle to obtain support from recalcitrant assem-
blies. The executive is endowed with strong constitutional powers including
decree and veto powers, but lacks the support of a solid partisan majority
in Congress to carry out his or her will. Ecuador has an average presidential
success rate of 41.76%, a figure significantly larger than Congress’s 14.51%
success rate between 1979 and 1996. As it will be discussed later, the exces-
sive use of constitutional powers to bypass Congress often backfired and
provoked confrontational responses from the legislature (Sánchez-Parga
1998). Costa Rica also appears in this cluster of uncooperative legislatures.
Michelle Taylor argues that without the possibility for immediate legislative
reelection, legislators have fewer incentives to collaborate with a lame-duck
incumbent president and hold their support until they can identify a candi-
date who could help advance their political careers (Taylor 1992).
The comparative overview confirms some of the expected effects of consti-
tutional and partisan powers for boosting legislative success. The following
section focuses on the interaction between constitutional powers, partisan
contingents and other political determinants to develop a deeper under-
standing of low legislative success in Ecuador. The empirical analysis also
reports on the legislative impact of 1998 constitutional reforms that sought
to strengthen the president’s ability to put a stamp on policy reforms.
Measuring Success in the Ecuadorian Legislature

The policymaking game in Ecuador can be explained by the executive’s per-
manent use and abuse of constitutional powers to compensate for the lack
of partisan support in nearly 30 years of democratic rule (Conaghan 1994;
Burbano de Lara and Rowland 1998; Sánchez-Parga 1998). The constitu-
tional powers of Ecuadorian presidents rank among the highest in Latin
America, with strong prerogatives for using decree authority, issuing total,
partial and pocket vetoes and having the authority to call for a plebiscite
(Shugart and Carey 1992; Carey et al. 1997; Tsebelis and Alemán 2003).
By contrast, the weakness of the party system and the absence of reliable
legislative support have been the nightmare of every Ecuadorian president
(Conaghan 1995; Mainwaring and Scully 1995). In a comparative study
of ten American nations between the 1950s and the 1990s, Grace Ivana
Deheza (1997) showed that Ecuadorian presidents had the lowest average
support in the legislature between 1958 and 1994 (32.10%).
The combination of a powerful executive (in terms of its constitutional
prerogatives for unilateral action) with a highly fragmented and apparently
uncooperative assembly has fueled a pervasive executive-legislative conflict
(pugna de poderes). Some had described Ecuador as a case of “structural
and irreversible conflict that confines and marginalizes political actors to
engage in non-cooperative games” (Sánchez-Parga 1998: 55). Not surpris-
ingly, policy outcomes have reflected a strong bias towards constant gridlock
and dominance of the status quo (Mejía Acosta et al. 2008; Tsebelis 2002).
Executive-legislative conflict in Ecuador has not only delayed the adoption
of social and economic reforms but it was also a triggering factor of repeated
institutional crises that ended with the premature and controversial ousting
of presidents in 1997, 2000 and 2005 (Mejía Acosta and Polga-Hecimovich
2007).4 What is puzzling for the Ecuadorian case is that the incidents of
severe executive legislative conflict all took place after constitutional reforms
aimed at strengthening the president’s policymaking ability were adopted.
The following pages explain how presidents advanced their economic
reforms through fragmented legislatures, whether they made extensive use
of veto and decree powers, and the workings of other factors that may have
contributed to executive success such as the impact of job approval rates,
the electoral cycle, and the breaking of party loyalties.
THE ECUADORIAN LEGISLATIVE PROCESS
According to the political constitution approved in 1998, the right to ini-

tiate legislation belongs to the president of the country, Supreme Court
magistrates, individual legislators (backed by their parties or a group of
more than ten legislators), cabinet members, regular citizens and other orga-
nized groups from society (Arts. 144–6). Presidents, however, have exclu-
sive rights to initiate bills related to fiscal reform, government spending or
political-administrative reforms. Figure 3.2 illustrates the sequence of the
legislative process in Ecuador. Once the bill is submitted to the legislature
(XP), the president of Congress directs the bill to the corresponding legisla-
tive committee. The amended legislation is then voted on the congressional
floor during a fi rst debate (Art. 147). Further amendments and committee
revisions come to the floor again for a second debate, after which Congress
has to approve it, deny it or modify it by the simple majority of its members
(Art. 150–2).5 The approved project (XL) has to be ratified or rejected by
the president. If approved, the bill (XL) becomes law and it is published in
the Official Registry (Registro Oficial). If the president completely vetoes
the bill, Congress would only be able to reconsider it after one year and
approve it with an absolute 2/3 majority in a single debate (SQ). If the bill is
partially vetoed (X’P), the president could resubmit an alternative text and
Congress would have to accept the amendments (allanamiento) or could
try to override the veto (and insist on its own version) with a 2/3 majority;
the outcome will be published in the Registro Oficial (XL). If Congress
does nothing in a period of 30 days after the bill is returned, the president’s
bill will become law.6
Finally, presidents can submit Economic Emergency Decrees (Proyectos
de Urgencia Económica) to Congress. DUEs resemble ordinary legislation
in that congressional approval is necessary for them to become law; the
only difference is that Congress has 30 days to approve, amend or reject,
otherwise they automatically become law. Another difference is that presi-
dents may not submit a DUE while there is a previous DUE under congres-
sional consideration.
Building a Model of Presidential Success

An alternative approach to measuring success rates is to explain the fate of
economic reform bills (approved, not approved) that were submitted to the
legislature by the executive between 1979 and 2002. One advantage of this
model is that it analyzes success in a specific domain of policy change: those
legislative initiatives that aimed at promoting economic liberalization and
improving efficiency in the market allocation of productive resources (Lora
1997). The range of economic reforms considered in the analysis reflects
the five main areas of reform that were pursued in other Latin American
countries: trade liberalization, fi nancial reform, tax reform, privatization
and labor code legislation (Lora 1997; Morley et al. 1999). A second advan-
tage of the present model is to analyze a significantly larger number of
cases with much greater detail, thus moving the attention beyond scandal
politics and focusing on conflict and cooperation patterns on a daily basis.
Figure 3.2 The legislative sequence in Ecuador.

The database contains all economic reform bills introduced by the execu-
tive between 1979 and 2002 (N=277), including information on the subject
matter, the dates when it was introduced, discussed, and approved, and the
fi nal outcome.7 The unit of analysis is the fate of a legislative initiative in a
given legislative term. A logistic model is used to predict the likelihood of
approval of an economic reform bill that was initiated by the executive.
Constitutional Powers
Ecuadorian presidents have significant agenda-setting powers to intro-
duce legislation (Carey et al. 1997). The constitutional prerogatives allow
presidents exclusive initiative on some economic matters, the ability to use
decree powers, the ability to veto and resubmit revised legislation, and even
the discretionary capacity to call a referendum on controversial matters.
Presidential decree powers became available to President León Febres Cor-
dero in 1984 after a constitutional reform approved the previous year, with
the explicit purpose of strengthening his legislative powers in economic
matters (Hurtado 1990). Between 1984 and 1998, presidents could submit
legislation by decree and these would become laws unless Congress revised
or amended them within 15 calendar days. The Constitution, however,
did not allow presidents to make further (partial) amendments on revised
decrees, thus leaving Congress the possibility to amend presidential decrees
with alternative text that presidents had to accept or reject.8 This scenario
was reversed after 1998, when presidents were allowed to veto and resubmit
bills with an alternative wording, thus strengthening their agenda-setting
powers (Tsebelis and Alemán 2003).9 The combination of strong decree
with partial veto powers gave Ecuadorian presidents a significant advan-
tage over Congress by Latin American standards (Carey and Shugart 1998;
Shugart and Carey 1992; Magar 2001; Tsebelis and Alemán 2003; Main-
waring and Shugart 1997). One possible consequence of stronger decree
and veto powers is that presidents could effectively persuade Congress to
approve their bills with a simple majority of the votes in the early stages of
the game, knowing that legislators would later need to gather a 2/3 over-
ride coalition if the president chose to veto the congressional amendment.
The statistical analysis includes dummy variables to account for bills initi-
ated by decree and the use of partial vetoes (35% and 10% of the sample
respectively).
Partisan Powers
The degree of partisan support that the president enjoys in the legislature
is argued to be a critical factor contributing to policy success (Jones 1995;
Deheza 1997; Amorim Neto 1998b). The larger the share of seats held
by the president’s party in the legislature, the greater is the likelihood of
economic reform bills being approved by Congress. A similar impact is
expected when presidents have the support of a larger government coali-
tion, defi ned by the share of parties who voted for the president’s candidate
for president of Congress at the beginning of each legislative year.10 A proxy
to evaluate the degree of political support is the extent to which minority
presidents have increased participation of coalition parties in the cabinet
(Amorim Neto 1998b).11 The party congruence between the cabinet and
the legislature is measured as the difference between share of cabinet seats
held by a party and their share of seats in the legislature. The expecta-
tion is that higher cabinet-party congruence (when the index approaches 1)
increases the chances of success of the president’s bills in Congress.
The percentage of legislators who defected from (switched out of) their
parties in a given year is used as a variable to capture the president’s ability
to break opposition majorities and form government coalitions with indi-
viduals (Mainwaring 1999; Desposato 2006). The share of party defectors
is expected to boost legislative success.
The Electoral Calendar

The effective length of political terms has a significant impact on the like-
lihood of approval of presidential bills. As a political term elapses and a
new election approaches, parties and legislators have decreasing incentives
to cooperate with the executive, especially if presidents do not have possibil-
ity of reelection and become lame ducks (Coppedge 1994). A first measure
of the effect of time on policy change looks at the number of days elapsed
since the beginning of the presidential term and bill initiation date, divided
by the total number of days in a presidential mandate. A similar measure is
devised to calculate the proportion of days elapsed until bill initiation com-
pared to the length of the legislative year. Given that for most of the period in
Ecuador presidents and legislatures have different tenures, this test evaluates
whose calendar is most important to affect the likelihood of bill approval.
The model also considers the number of days elapsed between the initia-
tion of a presidential bill and its final outcome (approved or not), to see if a
speedier debate has a positive impact on its chances of approval. Finally, the
model develops a measure for anticipated presidential success of each bill,
which is the interaction between the proportion of days elapsed at the time of
initiation, and the total number of economic bills introduced to Congress in
that year. Thus, the likelihood of approval is expected to increase when more
bills are submitted at the beginning of the presidential term.
The Ideological Spectrum

Executive-legislative cooperation and policy change are more likely to
take place when presidents and legislators share ideological affi nities
(Tsebelis 2002; Krehbiel 1998). To measure ideological distances between
congressional parties in Latin America, Michael Coppedge estimated the
mean left-right position of ideological blocs in Congress (mlrp) (Coppedge
1997). The mlrp looks at how far to the right or to the left was the aver-
age congressional party in each legislative period, and it goes from -100
(all parties on the extreme left) to +100 (all parties on the right).12 Assum-
ing that rightist parties in Ecuador are associated with market-oriented
reforms, a positive and high mlrp is expected to facilitate economic lib-
eralization reforms. Another relevant measure is the distance between
the legislator’s mlrp and the president’s own ideological position, as
determined by the president’s own party classification or by a qualitative
assessment of previous policies endorsed in the case of populist, centrist
or undefi ned candidates. A shorter ideological distance between govern-
ment branches is more likely to produce policy changes.
Presidential Popularity
A fi nal test looks at the impact of president’s job approval rates on the like-
lihood of getting legislation approved. Richard Neustadt’s seminal work on
the American presidency argued that presidents who enjoyed a reputation
of doing a good job were also able to persuade Congress to cooperate and
share the benefits of having a good public reputation (Neustadt 1980). A
good public reputation, however, could also boost the president’s ability to
go public and use the media to blame policy gridlock on Congress (Cam-
eron 2000: 108). Grindle and Thoumi provide evidence that Ecuadorian
presidents played this “blame game” to persuade, explain and appeal for
public support of their agenda, but also to discredit or blame Congress
for holding up economic modernization (1993: 160). Thus, the statistical
model uses public opinion surveys from Informe Confi dencial, an indepen-
dent polling firm, to see whether higher presidential popularity during the
discussion of the bill increased its chances of approval.13
REGRESSION ANALYSIS
Table 3.1 reports the statistical analysis on the likelihood of approval (1) or
rejection (0) of executive-led bills on economic reform. The models use a
logit regression and the overall prediction of success and failure in all cases is
greater than 65%. Two sets of models are reported; A through C report suc-
cess levels using presidential decree authority, and D through F replicate the
analysis without presidential decree authority. Statistical results suggest that
bills are more likely to be approved when the president uses decree and veto
powers, with larger government coalitions or a greater share of party switch-
ers, and when bills are submitted earlier in the presidential term and are
speedily considered in Congress. A larger share of the president’s party and
a greater ideological distance between the executive and Congress reduce the
likelihood of approval. These results are discussed and illustrated below.
Table 3.1 Likelihood of Approval for Presidential Initiatives of Economic Reform
in Ecuador (1979-2002).
Independent Model A Model B Model C Model D Model E Model F

Variables
Constant -1.21 -0.25 0.47 -1.37 0.36 0.13
(0.56) (0.92) (1.12) (0.83) (1.27) (1.84)
Decree usage 1.61*** 1.63*** 1.80***
(0.31) (0.33) (0.34)
Veto usage 2.29** 2.51** 2.79***
(0.74) (0.74) (0.79)
President’s party -0.04** -0.03* -0.05** -0.01
(0.01) (0.01) (0.02) (0.02)
President’s coalition 0.03** 0.03* 0.05**
(0.01) (0.01) (0.02)
Party switchers 0.04* .05* .05*
(0.02) (0.02) (0.02)
Partisan cabinet -0.90 -1.44
(1.20) (1.91)
Lame duck effect 0.39 0.33 0.09 1.43* -1.55 -1.55
(yearly) (0.46) (0.35) (1.20) (0.66) (1.75) (1.74)
Total bills submitted -0.03 -0.32 -0.10 -0.04
(0.05) (0.05) (0.08) (-0.08)
Anticipated success 0.12 0.20* 0.21 0.21
(0.10) (0.10) (0.13) (0.13)
Elapsed time -0.01** -0.01*
(0.01) (0.01)
Post 1998 constitution -0.96* -1.39* -2.20*
(0.49) (0.78) (1.01)
Popularity rates -0.01 -0.02
(0.01) (0.01)
Mean Left Right Pos. -0.01 -.03* -0.02* -0.02
(0.01) (0.01) (0.01) (0.02)
Ideological distance -0.02 -0.03* -0.03* -0.03*
(0.01) (0.01) (0.01) (0.02)
Success correctly 69.63% 65.03% 72.03% 47.83% 47.95% 47.95%

predicted
Failure correctly 64.80% 68.66% 65.67% 81.00% 86.11% 89.81%
predicted
Overall Prediction 67.31% 66.79% 68.95% 67.46% 70.72% 72.93%
continued
Table 3.1 continued
N 260 277 277 169 181 181
Xi2 / Pseudo R2 39.60/ 53.94/ 54.76/ 32.60/ 36.16/ 40.84/
0.11 0.14 0.14 0.14 0.15 0.17
Note: Standard errors reported in parenthesis.

* Significant at a 0.05 level.
** Significant at a 0.01 level.
*** Significant at a 0.001 level.
Constitutional Powers
The empirical results report that the presidential use of decrees of eco-
nomic urgency was an effective strategy to approve economic reforms: 70
of 97 decrees of economic urgency submitted to Congress were approved
and became law (72%). The fi rst three models report that the use of
presidential decrees had a strong and significant impact on presidential
success. The use of decree authority had varying degrees of success when
combined with other variables. The use of decree powers was in fact
crucial to seal the fate of economic reforms in Congress, boosting the
probability of approval from .39 (without decrees) to .75 (using decree
authority), when all other political variables are held constant at their
mean values.
Consistent with previous work, the use of executive decree authority is
likely to be more effective in a context where there are preexisting condi-
tions of political support (Carey and Shugart 1998). Consider, for exam-
ple, an optimal or “consensus” scenario where the president has formed a
large coalition with like-minded parties (minimal ideological differences).
In this context, the use of presidential decrees will boost the likelihood of
success to 0.93, compared to 0.72 if decrees were not used. Conversely,
in a highly “fragmented” scenario where presidents lead a small partisan
coalition and have significant policy differences with the median legisla-
tor, even the use of decree powers would not produce legislative success,
as depicted in Figure 3.3. This would be the case of “imperial” presidents
who hoped to bypass coalition politics through the use of decrees alone,
only to fi nd increased opposition in Congress.
The use of presidential vetoes (reported in models D–F) was also a
powerful tool to break congressional opposition and get legislation
approved. Presidents could use their veto powers to block unwanted legis-
lation and insist on their most preferred legislation (Tsebelis and Alemán
2003; Cameron 2000; Magar 2001). Since vetoed legislation could be
overridden only with a 2/3 majority, presidents only needed to persuade
the necessary “pivotal” legislators to break a supermajority. In all cases,
veto powers yield a significant and positive impact on approval of bills.
Figure 3.3 Impact of constitutional (decree) powers on the likelihood of policy

change. Ecuadorian National Congress (1979–2002).
Partisan Powers
The effects of partisan powers on executive success adopt interesting fea-
tures in the context of minority governments. When the president’s party
does not have the majority of legislative seats, a larger presidential party
has a negative effect on the likelihood of presidential success, as suggested
by regression models A, C and D. One interpretation is that presidents with
smaller or no party representation in Congress were more aware of the
need of making coalitions with the opposition than presidents with larger
pluralities. Based on a comparative study of presidential and parliamen-
tary democracies, José Antonio Cheibub and Fernando Limongi report that
“the frequency of coalition and majority governments (under presidential-
ism) actually increases significantly when no party holds more than a third
of the seats in the legislature” (2002: 165).
In Ecuador, presidents with small party representation in Congress,
such as Febres Cordero in 1985 (12.68%) and Durán Ballén in 1992
(15.58%), were able to form majority coalitions that approved a higher
percentage of bills (64.71% and 65.22% respectively) than President
Borja, whose party had 42.25% of seats in Congress in 1988–1989 (and
it approved 53% and 56% of his agenda). When asked about his coalition-
making strategies, former president Borja dismissed the need to engage
with Congress, arguing that “sometimes ( . . . ) legislators do not have the
relevant information to draft policy proposals.”14 In a broader perspec-
tive, however, Borja achieved poor legislative success in Congress com-
pared to presidents with weaker partisan contingents but more willing to
engage in coalition-making.
The fi nding that the size of the president’s party in a minority context
has no effective impact on the likelihood of success has significant implica-
tions for the relevance of coalition-making. Empirical fi ndings suggest that
the larger the size of presidential coalitions, the more likely reforms are to
be approved. The size of the president’s coalition has a positive and signifi-
cant impact at the 0.01 level in regression models A, C and D. Figure 3.4
shows that, holding all variables constant at their mean values, the size of
the president’s coalition has a positive influence on the approval of reforms
when it is greater than 47% of congressional seats. When presidents enjoy
the support of the largest legislative coalition available (65.3% of seats) and
decide to use decree authority, their probability of legislative success boosts
to 0.83. Finally, the Ecuadorian case confi rms Mainwaring and Shugart’s
suggestion that strong presidential powers are likely to be used to compen-
sate for the lack of partisan powers (1997): The use of decree authority is
negatively correlated with the size of the coalition supporting the president
(r=—0.12) and significant at the 0.05 level.
The empirical fi ndings confi rm the notion that presidents are likely to
encourage individual defections from opposition parties to compensate
for the lack of partisan support. Models B, E and F show that the share
of legislators defecting from opposition parties has a positive and signifi -
cant impact on the likelihood of policy approval. The percentage of party
switchers is inversely associated with the size of the president’s party
(r=—0.56). When asked about the motivations for leaving their party,
one independent legislator explained, “It is the only way (we) Provincial
Deputies can obtain (from the executive) the approval of some prior-
ity policies that would serve our peoples.”15 Most party switchers came
from centrist—non-ideological—parties, small—visible—electoral dis-
tricts and usually abandoned their parties to join the government coali-
tion (Mejía Acosta 1999).
Figure 3.4 Impact of the President’s coalition on the fate of economic reforms,
controlling for decree power.
In Ecuador, the partisan composition of the cabinet does not have a
meaningful impact for securing legislative support and approving economic
reforms as reported in models C and F (Amorim Neto 1998). Traditionally,
Ecuadorian presidents have avoided making explicit reference to including
members of opposition parties as their cabinet ministers, especially on the
economic front. Catherine Conaghan explored how presidents choose to iso-
late their cabinets from the political realm and staffed their ministries with
technocrats accountable to the president only during the decades of economic
adjustment following the return to democracy (1994). According to former
President Hurtado, isolating ministers from any political affiliation was a
deliberate strategy to avoid the politicization of economic policies (Conaghan
1994: 275). Nevertheless, the fact that many cabinet members had no appar-
ent political affiliation did not mean that the president ignored the political
and regional demands of opposition parties in Congress. According to Nick
Mills, the allocation of cabinet positions was a clandestine process of con-
gressional bargaining that was consistently denied by involved parties to save
their reputation of “political chastity” (Mills 1984). While the appointment
of new cabinet members generally announced the formation of new congres-
sional coalitions, these government officials were also frequently removed to
accommodate new congressional majorities.16
The Time Factor

Contrary to theoretical expectations, the model fi nds no independent
impact of the time factor on the likelihood of economic reforms approval
(Amorim Neto 2002). Both the timing of the initiation of bills, measured
as the percentage of the mandate elapsed at the time of initiating a bill in
Congress, as well as the percentage of legislative year elapsed, are not con-
sistent predictors of executive success. One possible explanation is the lack
of institutional incentives to develop long-term cooperation among politi-
cal actors, due to the presence of midterm congressional elections every
two years (1984–1998), the prohibition on immediate legislative reelection
(1979–1996), and several government changes in 1981, 1997, 2000 and
2005. There is also inconclusive evidence to illustrate whether presidents
who acted more conservatively and sent fewer bills to Congress at the end
of the legislative year were more likely to get legislation approved than
those who sent bills early in the term.
The duration of the legislative process is found to have an impact on
congressional approval. The number of days elapsed from the initiation of
the bill until its approval has a negative and significant impact on the fate
of bills: the sooner the bill is considered, discussed and voted, the more
likely it is to be approved. While this variable is associated with the use
of decree power as a constitutional fast-track for controversial legislation
(model B), only 35% of the legislation contained in this dataset was initi-
ated by decree.
The Ideological Space for Reforms
These alternative measures to evaluate policy preferences were used in this
model. First, the mean left-right position of the legislature (MLRP) appeared
to be significant but with a negative sign, meaning that economic reforms
were more likely to be approved by left- instead of right-leaning parties. This
is a puzzling result that challenges the conventional notion that left-leaning
parties would oppose market-oriented reforms. One immediate implica-
tion is to revise the meaning that different structural economic reforms
promoted by the Washington Consensus (including labor, markets, fiscal,
fi nancial and privatization) had for interest groups on the right and the left.
In Ecuador during the Mahuad administration, for example (1998–2000),
the leader of the rightist Ecuadorian Social Christian Party (PSC) vehe-
mently opposed the creation of new taxes and trade liberalization reforms,
but favored more flexible labor markets and the opening of fi nancial mar-
kets. The Left, on the other hand, offered Mahuad some legislative support
to approve a new Law of Financial Institutions, and restore income tax
(abolished by the PSC only six months earlier) as a source of government
revenues.17 These reforms, according to the leader of the indigenous Pacha-
kutik party, Nina Pacari, were voted in order to help the economy recover
from the 1999 banking and fi nancial crises, and reflected the policy priori-
ties of the Left, not the reform agenda of Mahuad.18 As expected, centrist
parties, including personalistic, populist and other options, also played
an important role in the approval of economic reforms. The high correla-
tion between centrist parties and party switchers (0.73), suggests that their
motivation for supporting a government coalition was better explained by
selective benefits rather than ideological convictions.
The empirical model confi rms the likelihood of approval of reforms
significantly increases when there are narrower ideological differences
between the president and the median legislator. The left-hand side of
Figure 3.5 shows that ideological proximity can still produce economic
reforms even if decree powers are not used, but the use of decree powers
could compensate for the lack of ideological affi nities between presidents
and congress, as depicted in the right-hand side of the chart. At its mean
value (37.7), the ideological distance predicts more than a 50% probability
of success of reforms.
Public Opinion Ratings and Anticipated Success
The statistical model does not confi rm that job approval rates of the presi-
dent, taken in the two largest cities of Quito and Guayaquil, have a signifi-
cant effect on the approval of economic bills. A possible interpretation is
that presidential (lack of) popularity does not directly affect the approval
of bills but influences the conditions under which legislative coalitions are
more (or less) likely to form in order to support the presidential agenda;
Figure 3.5 Impact of the ideological distance between the president’s ideological
position and the mean legislator on policy change, controlling for decree power.
in other words, presidential popularity has an indirect influence on bill

approval through the president’s coalition-making abilities.
Another dimension for which empirical results offer little support is the
extent to which presidents are able to effectively anticipate their likelihood of
legislative success throughout the term. The notion of anticipated reactions
suggests that successful presidents would be more likely to obtain congressio-
nal victories—or minimize defeats—when they could effectively anticipate
the preferences of the median legislator and exercise conditional leadership
when forming a coalition (Shugart and Carey 1992; Cox and McCubbins
1993). While the predictions are inspired in the bipartisan dynamic of the
U.S. Congress, Ecuadorian presidents would face a very difficult task if they
tried to correctly predict the policy preferences of a highly fragmented legis-
lature (Amorim Neto 1998: 149). But even if presidents did invest time and
effort learning the preferences of the median legislator, the learning curve
would start again every time the legislature was renewed (for the most part,
every two years between 1984 and 1996, and every four afterwards) or the
president had to step down due to presidential term limits.
CONSTITUTIONAL REFORMS AND

PRESIDENTIAL SUCCESS
As discussed in Chapter 1, the 1998 constitutional reforms increased the

president’s legislative powers in order to compensate for the lack of partisan
support in Congress and strengthen the policymaking abilities of the execu-
tive. Inspired by the goal of improving governance, constitution makers were
eager to shift the balance of power in favor of an already strong executive
and at the expense of the legislature. The reforms effectively increased the
president’s decree powers, by reducing the number of available days for Con-
gress to discuss the economic urgency bills, and enhancing the veto powers
to allow presidents to partially veto unwanted legislation and resubmitting
the bill with an alternative text. The presidential veto required an absolute
congressional majority to be overridden, or automatically became law.
The theoretical and political expectation of greater presidential success
after 1998 is rejected by the empirical fi ndings. A variable coded to evaluate
the likelihood of success of bills initiated after the constitutional reforms
shows a negative and significant coefficient in models C, D and F. Not only
was presidential success diminished after 1998 but there were repeated inci-
dents of severe executive-legislative confl ict that eventually contributed to
the controversial ousting of elected presidents in 2000 and 2005. Why did
presidents become weaker legislators despite constitutional reforms that
gave them stronger decree and veto powers? The answer so far, and one
of the most important contributions developed in this book, is that consti-
tutional powers could not substitute for the political advantage of making
formal or informal coalitions with opposition parties in Congress.
This chapter offers a novel empirical approach to policymaking patterns

in Ecuador by looking at the political determinants of presidential suc-
cess. The evidence challenges the conventional portrait that presidents
bombarded Congress with reform proposals, legislative vetoes and urgency
decrees in order to compensate for the lack of partisan support (Conaghan
1995; Burbano de Lara and Rowland 1998; Sánchez-Parga 1998). Initially,
the data shows that the use of decree authority effectively increased the rate
of success to 75% of the proposed decrees between 1979 and 2002, and
the use of veto power reinforced presidential success, especially when this
prerogative was strengthened after 1998. Yet, an unexpected fi nding is that
presidents only used executive decree authority to push one third of all leg-
islation submitted to Congress. How did presidents negotiate the remaining
share of bills with Congress?
The chapter suggests that making legislative coalitions with opposition
actors was a regular strategy to secure the passage of economic reform pro-
posals. Given the choice of passing reforms with parties or individual legis-
lators, the evidence suggests that presidents preferred to build broad party
coalitions around reform proposals. In fact, given the minority status of all
presidential parties in Ecuador, a larger presidential “plurality” undermined
their changes for legislative success, whereas the size of a multiparty coalition
increased a bill’s chances of approval. Like in parliamentary regimes, policy
coalitions were predominantly formed with likeminded parties; a narrower
ideological gap between the president’s position and the mean legislator’s
ideological position also increased the likelihood of policy approval.
Finally, the statistical analysis does not rule out the importance of party
defections to compensate for the lack of partisan support and increase the
president’s likelihood of policy success. As expected, the number of party-
switching events is associated with smaller government parties or coali-
tions. There is also evidence to show that likelihood of legislative success
erodes with the duration of the presidential term.
The following chapter explores another dimension of the legislative
bargaining and focuses on the party leaders’ decision to cooperate—or
not—with the government and whether they are able to enforce party unity
around that decision. The next question is then: when do party leaders
become effective brokers between the president and legislators?
4 Party Brokers and Voting Unity
in the Ecuadorian Congress
This chapter addresses a highly controversial but virtually undocumented

puzzle in the study of the Ecuadorian legislature: are presidents able to
solve collective action dilemmas and command the support of party lead-
ers to form legislative coalitions (Cox and McCubbins 1993; Figueiredo
and Limongi 2000), or do presidents prefer to make piecemeal agree-
ments and promote vote-buying with myriad rent-seeking legislators
(Mainwaring 1999; Ames 2001)? To answer this question, I build on the
theoretical model offered in Chapter 2, which explains policymaking
as a nested bargaining between three ideal players: an agenda-setting
president, a party leader who represents the median legislator, and an
individual legislator whose vote is pivotal to make or break a legislative
majority.
If the conditional leadership argument is sustained, we should expect
that the predominant bargaining takes place between the president and
the party leader, with all individual players willing to support the party
leader. Under a vote-buying scenario, the party leader has no leverage to
enforce any party unity and the individual legislator directly negotiates
support with the president based on its potential pivotal status. To test
the argument, I have collected roll call data from approximately 50 votes
on economic reform proposals, legislative appointments of key government
officials and congressional resolutions. Given the absence of formal roll call
voting mechanisms, the data has been carefully extracted from archives of
legislative debates, and consequently this is a fi rst in-depth analysis of party
unity in Ecuador.
Contrary to existing predictions (Conaghan 1995), roll call analysis
reveals that Ecuadorian political parties exhibited high unity scores, defined
as the tendency of individual legislators to vote together on a given issue.
Party unity scores tend to vary along the ideological spectrum, with high-
est unity scores found on left parties and lowest on centrist, personalist and
populist parties. High unity scores played a decisive role in the party’s likeli-
hood of voting with the president: parties who had a record of discipline in
the previous year had a greater likelihood to vote the president’s proposals;
in turn, parties who voted with the government showed higher unity scores
Party Brokers and Voting Unity in the Ecuadorian Congress 63
than those in the opposition. As expected, a party’s likelihood of voting with
the government decreased with the proximity of new elections.
The unexpected voting unity is explained by the presence of party bro-
kers that emerge as critical agents to articulate collective action and provide
coalition insurance to all parties involved. Their role is especially relevant
in a fragmented legislature. Party leaders fulfi ll a double role in the coali-
tion-making game: they ensure reliable voting unity from party members to
approve the president’s policy agenda; in return, they bargain the appropri-
ate coalition incentives with the president so they can distribute cabinets,
concessions, pork and patronage among the rank and fi le.
Chapter 4 proceeds as follows. The fi rst section provides a brief review
of the relevant literature on party unity and government voting, with a
specific application to the Ecuadorian case. The second section elaborates
a delegation (principal-agent) argument to explain the puzzle of legislative
unity. The third section empirically tests the proposed model by looking at
two different tiers: determinants of party unity, and unity patterns when
voting with the president. The fourth section analyzes the relationship
between party brokers and unity scores, and the fifth section concludes.
AGENTS OF UNITY: VOTING PATTERNS

AND GOVERNMENT SUPPORT
In a parliamentary setting, internal party unity—the legislators’ tendency

to vote together on the same issue—is critical to ensure the legislative
success of the governing coalition. Policy success in turn, contributes to
government survival. Under separation of powers, party unity, legislative
success and government survival are not necessarily interconnected. The
link between policy success and government survival in presidential sys-
tems however, was thoroughly discussed early in this book and elsewhere
(Cheibub and Limongi 2002).
Party unity may have ambiguous effects on the president’s ability to
pass legislation through Congress depending on the size of the government
coalition and the position of the proposed policy. A solid (unitary) party or
coalition may be an invaluable asset to push the president’s agenda through
Congress if they share the same policy priorities with the president, but
the legislature may become a difficult veto player if the president’s party
or coalition does not enjoy majority status, or the (unified) parties fi rmly
oppose the president’s policy agenda. By contrast, a loosely disciplined leg-
islative partner can become an unreliable coalition partner if the president’s
majority depends on it, but it could also be instrumental for policy change
if party members are willing to abandon the opposition and help the presi-
dent break a legislative gridlock. The following pages present a stepwise
analysis of the theoretical conditions and the empirical implications of
party unity and its effects on policymaking.
Party Unity in Comparative Perspective
Why do legislators vote together on the same issue? Is it because they share
common personal preferences around ideology and beliefs (cohesion), or is
it because there is a delegate authority or party leader who enforces unitary
voting (discipline) in exchange of individual or collective incentives? For the
purpose of exploring both alternatives, voting unity refers to the tendency
of legislators to vote together on a given issue, regardless of whether it
resulted from imposed discipline or natural cohesion. Advocates of non-
partisan approaches claim that legislators are independent “single-minded
seekers of reelection” whose congressional behavior is strongly shaped by
their willingness to please the needs and demands of their constituents or
their own (Mayhew 1974: 4; Krehbiel 1998). In this view, legislatures are
like “town hall meetings” where no specific assumptions are made about
the roles of political parties, leaders or committees shaping voting patterns
(Krehbiel 1998: 25; Cox and McCubbins 2004). In other cases, legislators
are portrayed as rent-seeking individuals whose voting is not determined
by party loyalty or electoral motivations but by the availability of pork and
patronage (Ames 1987, 2001).
Electoral systems have a substantive role in shaping party unity. If leg-
islators’ electoral and career prospects depend on the direct preferences
of their constituents, such as in plurality or open list proportional repre-
sentation systems, their voting behavior will reflect what is best to sustain
the “electoral connection” (Cain et al. 1987; Carey and Shugart 1995).
Under closed-list proportional representation systems, however, legisla-
tors who want to pursue reelection and develop a political career have to
fi rst gain the nomination from the party leader and then compete for the
votes (Mainwaring 1999). The general principle is that party leaders will
be relevant agents of party unity as long as they can effectively control
the electoral fates of the rank and fi le (Mainwaring and Shugart 1997;
Morgenstern and Nacif 2002). Party leaders would have greater ability to
enforce unified voting if: a) they control candidate selection, b) they con-
trol the order in which candidates are placed in a (closed) party list, and
c) the votes obtained by candidates are fi rst pooled and proportionally
redistributed to party candidates in order to allocate congressional seats
(Mainwaring and Shugart 1997: 421; Morgenstern 1996). The notion
that party leaders can be agents of party unity builds on the premise that
legislators are primary reelection seekers. But when legislators are unwill-
ing or unable (by constitutional restrictions) to seek immediate reelection,
some have argued that party leaders could play a decisive role for advanc-
ing their members’ “progressive ambition” beyond the legislative arena
(Carey 1996; Samuels 2002).
Party leaders can also structure rules and legislative procedures to pro-
vide incentives for unified voting (Cox and McCubbins 1993). The prem-
ise at work is that individual legislative action is not sufficient to deliver
effective policies to the electorate; different agents are needed to take care
of “institutional maintenance” procedures such as controlling the legisla-
tive agenda or enforcing internal party rules (Mayhew 1974: 149). Thus,
party leaders are critical to defi ne the policy issues that matter to voters;
they create internal party consensus around policy proposals, and enforce
legislative agreements. Insofar as party leaders effectively translate vot-
ers’ preferences into policies—or material rewards—that benefit vot-
ers, they’d be able to attract favorable electoral tides for the party in the
future. In return, party leaders can enforce and reward disciplined voting
by advancing their members’ policymaking, vote-seeking, or office-seek-
ing objectives (Kiewiet and McCubbins 1991; Cox and McCubbins 1993;
Aldrich 1995).
Both approaches to party unity, the individual-centered and the party-
centered, assume that legislators are ultimately concerned with some
“electoral efficiency” goal that benefits them directly or through the party
organization. A more recent approach to party unity relaxes the distinction
between parties or individuals and focuses instead on the roles of legislative
groups or agents such as factions, parties or coalitions (Morgenstern 2004).
These legislative agents are equally accountable to voters and are inher-
ently defi ned by their ability to take concerted or coherent action (2004: 4).
The next section discusses how different patterns of voting unity affect the
executive’s strategies for assembling government support in the legislature.
Government Support in Comparative Perspective

There are two alternative explanations to understand how presidents gather
legislative support. According to advocates of non-partisan approaches,
presidents’ success in making coalitions for reform depends on their abil-
ity to anticipate the (ideological) preferences of legislators, and propose a
reform that is amenable to the median legislator (Krehbiel 1998). In a con-
text where legislators are assumed to privilege rents over policies and party
labels are poorly relevant, party leaders “rarely matter very much in deter-
mining (disciplined) cooperation or defection” (Mainwaring 1999: 141).
Thus, when it came to voting with the president, cooperation was secured
through individual vote-buying mechanisms (Ames 1987), but often lead-
ers were unable to persuade deputies to support presidential proposals,
even after lavish pork-barrel spending (Ames 2001: 188).
Advocates of party-oriented approaches argue that isolated acts of inde-
pendent voting do not affect policy outcomes; whatever their short-term
beliefs, individual legislators are better off endorsing party leaders who
would in turn extract political concessions from the president (Carey 2007;
Cox and McCubbins 1993; Figueiredo and Limongi 2000). In this light,
party leaders are not only agents of unity but also legislative brokers: inter-
mediaries who bargain coalition incentives with the president on behalf of
their party, in exchange of legislative support (Amorim Neto and Santos
2001). As discussed earlier, coalition incentives for party members cover a
wide range of goods including ideological or policy concessions (Figueiredo
and Limongi 2000), political office in a future term (Carey 2007; Samu-
els 2002), legislative committee appointments (Santos 1999), or pork and
patronage for their own benefit (Mainwaring 1999).
Buying Retail or Wholesale? Party Unity and

Government Support in Ecuador
The Ecuadorian Congress offers an interesting experimental arena to test
the validity of the two theoretical approaches discussed thus far. Since the
transition to democracy in 1979, party leaders had strong powers to select
candidates, determine the order in party lists and distribute some congres-
sional prerogatives among the rank and file. Despite their formal powers,
party leaders did not have any leverage to influence their members’ politi-
cal careers because most legislators faced short terms in office (two years),
and term limits. After 1997, electoral reforms encouraged a more voter-ori-
ented attitude among legislators: they were elected through open-list voting
regardless of placement in the party list, their terms lasted for four years
with unlimited reelection, and party leaders played no role in allocating
congressional seats. 1
Testing models of party unity remains a difficult task due to the absence
of roll call voting in Ecuador. Based on selective interviews and anecdotal
evidence, scholars have argued that party labels were of little importance,
and legislators were often willing to break party unity, abandon any party
affiliations, and engage in widespread vote-buying with the executive (Con-
aghan 1995; Burbano de Lara and Rowland 1998; Sánchez-Parga 1998).
What this literature fails to explain is: Why did political parties remain
important players in legislative dynamics for more than 25 years in Ecua-
dor, despite these “electorally inefficient” practices? (Freidenberg and
Alcántara 2001; Pachano 2006).
Party Leaders as Agents of Unity

Party leaders in Ecuador are believed to have weak or no influence on the
political careers of the rank and file. Despite the fact that party leaders
controlled candidate nominations, vote pooling and the placement order in
closed-list proportional representation races, Morgenstern is surprised to
fi nd that “voters apparently placed little weight on the party label, legisla-
tors could dissent on votes, repel leaders’ demands and even switch par-
ties without jeopardizing their electoral prospects” (2002: 422). Part of
the explanation is that leaders had no leverage over legislators’ electoral
prospects between 1979 and 1996 because legislators were banned from
seeking immediate legislative reelection. When legislative reelection was
allowed after 1996, the electoral system also changed to feature an open-list
type of formula to elect legislative representatives, thus taking power away
from party leaders to make electoral nominations. While purely electoral
features would predict weak party leadership, party leaders had significant
powers over the rank and fi le to control internal legislative procedures,
such as powers to promote or block legislative initiatives of party members,
the allocation of committee assignments, and the distribution of legislative
staff and other resources to legislators.
There were several other mechanisms through which party leaders
become essential to advance the interests of the rank and fi le. Party lead-
ers could advance the career prospects of legislative members even if these
could not seek immediate reelection to Congress. It is quite possible, for
example, that leaders helped legislators pursue a political career in local
or city governments, government bureaucracies or even the foreign service
(Lujambio 1995; Carey 1996; Samuels 2003). Leaders could also help iden-
tify and negotiate the necessary resources to advance other valid goals of
legislators such as monies for local development projects.
Party Leaders as Brokers of Government Support

It is commonly believed that presidents—in the absence of party leaders—
gathered legislative support through widespread vote-buying. This prac-
tice is defi ned as the distribution of selective incentives (material rewards,
particularistic concessions, pork, and patronage) to individual legislators
in exchange for supporting their legislative agenda or blocking the oppo-
sition’s. After all, Ecuadorian presidents were endowed with significant
agenda-setting, political and material resources to set and advance the
policy agenda.
The argument of widespread vote-buying on the part of the executive,
however, presents two contradictions. The fi rst one is that vote-buying
yields uncertain outcomes. In theory, every legislator has the potential of
becoming “pivotal” for the success of a minimum winning coalition, which
means that they can blackmail the leadership with the threat of single-hand-
edly changing the expected result (Londregan 2002). How could presidents
anticipate how many legislators are needed to assemble a large enough and
reliable coalition to avoid the risk of being blackmailed at the margins? The
second contradiction is that vote-buying is expensive. Although presidents
enjoy the monopoly of material and political resources, the availability of
payoffs and value will erode over time. In the case of available cabinet posi-
tions, for example, these would not suffice to keep up with the changing
demands of coalition partners every time a new vote takes place.
Party leaders offer an attractive option to expand the president’s pos-
sibilities of legislative success on both accounts. Leaders can minimize the
chances of majority reversals and upset victories because they control the
legislative agenda and determine the voting rules that can determine if the
president’s proposal is ready for a favorable vote on the floor or if they can
stall a controversial vote and prevent a presidential defeat. Party leaders
can also minimize uncertain votes by assembling supermajorities so no leg-
islator is crucial for making or breaking a majority (Groseclose and Snyder
1996; Londregan 2002: 359). On the second point, party leaders can help
reduce the costs of coalition-making by enhancing the value of presidential
payoffs. Unlike presidents, party leaders have direct and updated informa-
tion about the preferences, goals and ambitions of their rank and fi le. In the
words of former president Mahuad, party leaders enabled him to negotiate
“with the owner of the circus, not with the clowns”. 2
To summarize the argument thus far, the legislative success of party
leaders consisted in satisfying two closely dependent conditions: a) to be a
reliable and continuous source of legislative support for the president, and
b) to obtain and distribute the necessary coalition rewards to ensure the
voting unity of the rank and fi le. The next section develops a two-stage
game theoretical model to explain and test legislative bargaining: the fi rst is
a cooperation game that takes place between the president and the broker;
a second—and simultaneous—game occurs between the party leader and
individual party members.
PARTY COOPERATION AND POLICY CHANGE
Recall the three ideal decision-makers in a legislature: a president (and his

legislative party), the leader of the median congressional party, and a piv-
otal player who is a party member but has the potential for reversing a pos-
sible outcome. As discussed in Chapter 2, the likelihood of policy change
will depend on the weights of each player (relative size, discipline), their
utility functions and the initial position of the status quo (SQ).
Players’ Preferences and Utility Functions

For simplicity, let us assume that a president proposes a policy reform that
moves away from the SQ. In principle, the president wants to pass legisla-
tion that is closest to his ideal policy and at the lowest possible political cost.
The goal of the second ideal player, the leader of the median congressional
party, is to maintain and expand his political leverage vis-à-vis the rank and
file, by extracting concessions from the government and distributing them
to loyal party members. 3 For a party leader, building a reputation of being
an effective party whip is crucial to attract the president’s attention in the
legislative bargaining. If the fi rst scenario is not possible because the leader
is unwilling or unable to form part of the governing coalition (for ideologi-
cal reasons or because he was outbid by another party), he would still be
better off commanding a unified opposition party. As a third best outcome,
if the party leader is unable to maintain party unity, he would still prefer to
access perks and payments from the government (while “releasing” a few
undisciplined legislators), rather than not being part of the coalition at all
and not being able to enforce a solid opposition vote.
From the perspective of the individual—and potential—pivotal player
(V), she faces the double dilemma of obeying her party leader and/or vot-
ing with the president. Assuming that the legislator primarily wants to
maximize her own selfish interest, she is more likely to extract larger and
more selective concessions from the president rather than obtaining those
resources from the party leader. The decision to abandon party ranks is
reinforced if the legislator is perceived to be in a pivotal position. The chal-
lenge of staging a party defection, however, is that if the “pivotal” agent
is not essential to secure a government coalition, the legislator is better off
remaining loyal to the party label and deriving collective benefits from the
party leader, even if they are all in the opposition. The worst scenario for
an individual legislator in a fragmented legislature is to oppose both the
president and the party. Table 4.1 summarizes the cooperation incentives of
the three ideal players and proposes an ordinal ranking of their preferences:
the president, the party leader and the individual legislator.
The outlined model suggests that, in equilibrium, all players have incen-
tives to cooperate with the government. Given a proposed policy change
by the president, party leaders can choose to support it or not, and party
members, in turn, will choose to support or not the party’s decision (and
consequently opposing or supporting the president). Four hypothetical sce-
narios (I through IV) become available. If both agents choose to cooper-
ate with the president (and with one another), we observe a government
coalition with a political party (scenario I); if both decide to reject the
president’s proposal, there is a deadlock situation (scenario IV). These two
outcomes assume absolute party unity, that is, leaders can effectively whip
all party members to enforce the party line. If legislators decide to chal-
lenge the leadership, however, two possible outcomes become available:
the leader promises to support the president but individual legislators vote
against it (scenario II), or the leader refuses to cooperate with the president
Table 4.1 A Cooperation Game for Policy Change.
President’s proposal (P) Legislator’s decision (V)

Cooperate Defect
Party leader’s Cooperate I. Partisan Coalition II. (Tolerated) dissent
decision (L) (4, 3) (2, 1)
Defect III. Vote-buying IV. Gridlock
(1, 4) (3, 2)
L’s ideal preferences: I > IV > II > III

V’s ideal preferences: III > I > IV > II
P’s ideal preferences: I > II > III > IV
but cannot prevent the defection of some individuals (scenario III). This is
a case of outright “vote-buying” by which the executive negotiates support
directly from the legislators, bypassing the line imposed by the party lead-
ership. Alternatively, some “tolerated dissent” may occur when the party
leader knows there are enough votes to pass legislation and voluntarily
“releases” some legislators by allowing them to stage publicity stunts that
opposes the official party decision (Carey 2007).
The Sequence of the Game

Table 4.1 helps illustrate the cooperation game between presidents, party
leaders and individual legislators and their expected gains from the trade.
In the fi rst instance, a president submits a policy proposal to Congress and
the leader of the median party has to decide whether to cooperate with
the proposed policy option. The party leader makes a decision based on
the ideological distances between her own (and party) ideal preferences
and the president’s. If the proposal lies outside the range of acceptable
options, she would decline to cooperate unless there are side payments
(office, pork, patronage, and other concessions) to compensate for a sub-
optimal policy outcome. For the individual legislator, the decision to
comply with the party leadership will be primarily given by ideological
affi nities. The legislator will remain loyal to the party unless her own
ideal preferences are closer to the president’s or the legislator is overcom-
pensated with side payments to abandon the party and pledge support to
the president’s agenda.
The equilibrium outcome for this cooperation game is found through
backwards induction, by fi rst solving the optimal strategy of the last player
in the sequence, and then anticipating the best reactions of the players
that move before given what the strategy of the player will be (Morrow
1994). From the game described above, and assuming the preferences of
rent-seeking legislators, the dominant strategy for the last legislator is to
offer support vote for the president’s proposal in exchange for particular-
istic payments, rather than missing out on a bargain. Given the willing-
ness of individual legislators to exchange votes for rents (cooperate), the
party leader’s best response is to capitalize on the rent-seeking incentives
of legislators and offer to bargain “wholesale deals” with the president
(cooperate). Needless to say, the proposed game sequence assumes that
ideal players know what the ideal preferences of others are and can there-
fore anticipate their best responses. It also assumes that there is no time
factor at play such as the presence of elections, so value of coalition cur-
rencies in this game remains constant over time. In equilibrium, the game
predicts that presidents would prefer to propose and maintain deals with
party brokers (outcome I), rather than engaging in individual negotiations
with pivotal players that can be expensive and uncertain. Cooperation
with parties is preferred even if they do not always deliver full legislative
support (outcome II). Vote-buying appears as a suboptimal outcome (III),
and legislative gridlock or policy stalemate (no agreement) would be the
least preferred solution to legislative players if they were interested in
receiving government benefits.
The next section tests the empirical validity of three sets of premises
advanced so far: a) presidents would prefer to negotiate legislative deals
with party leaders with whom they share ideological affinities, rather than
dealing with individual legislators, b) party leaders will seek to effectively
whip unified voting whether they support the government or not, and c) the
decision of individual legislators to support the government is motivated by
rent-seeking objectives.
TESTING PARTY UNITY PATTERNS IN ECUADOR
Roll call votes are useful instruments to identify and analyze individual
legislative choices across different policy issues. By discriminating “the ins
from the outs” on legislative outcomes, roll calls can be used to contrast
general party behavior patterns across issues and time. Much skepticism
remains, however, regarding the value of using roll call data to accurately
reflect the bargaining processes that take place before a vote is taken, or the
fact that roll calls do not reflect the votes that were never brought to the vot-
ing floor (see Ames 2001; Krehbiel 1998; Morgenstern 2004). Despite these
valid concerns, the tallying of roll call votes in Ecuador is one concrete way
to aggregate and systematically compare patterns of legislative cooperation
and defection beyond the media scandal or the anecdotal evidence.
Since the return to democracy in 1979, the Ecuadorian Congress has con-
tinuously avoided the adoption of automatic mechanisms to keep track of
voting, such as electronic boards. In the light of such limitations, this book
offers a first attempt to analyze voting patterns in Ecuador by reconstructing
the legislative votes recorded in the Diarios de Debates of the National Con-
gress of Ecuador between 1980 and 2001. The dataset builds on information
extracted from 49 valid roll calls that were selected from a total universe of
250 votes. For each vote, data collected includes the outcome of the actual
vote, the voting threshold to approve the bill, the position that represented
the government proposal, whether an alternate legislator cast the vote, and
whether it was cast on the first or second call. The data contains three types
of votes that reflect legislators’ intentions regarding government proposals.4
Type-I votes are roll calls on executive-led reforms in key reform areas such
as privatization, market liberalization, fiscal reforms, labor regulations and
social security. Type-II votes contain congressional impeachments of eco-
nomic cabinet members, including Finance and Energy Ministers, as well
as the congressional votes to impeach Vice President Dahik (1995) and to
dismiss President Abdalá Bucaram (1997).5 Type-III votes look at congres-
sional appointments of economic and control authorities including General
Comptroller, Attorney General, Banking Superintendent, Communications
Superintendent, and Central Bank Board Members.
In the case of ordinary economic laws (type-I votes), levels of sup-
port are simply reflected by individual or partisan votes in favor of the
president’s proposal (aye). The Internal Code of Legislative Procedures
(Art. 74), establishes that all ordinary laws must be approved with a
simple majority of all voting members (aye + nay + blank votes). Non-
voting events could be conceived as a strategic form of collective action
through which legislators may support—or oppose—a bill without actu-
ally casting an endorsement one way or the other. This informal strategy
of “vote without voting” may be used to avoid the political implications
of making a public endorsement (Ames 2002; Carey 2007). For practi-
cal purposes, nonvoting events including abstentions and absences are
considered to have the same impact on a decision when the voting rule
imposes a fi xed threshold for approval. For example, Congress can over-
ride a partial veto of the president with 2/3 of all its members (82 of 123
members in 1998). Thus, any vote short of the required 82 votes, includ-
ing an absence or abstention, could single-handedly reverse the expected
outcome.
In the case of impeachment votes, the Organic Law of the Legislative
Branch (LOFL) establishes a qualified majority to dismiss the president or
the vice president (Art. 103), and an absolute majority to dismiss cabinet
members (Art. 95).6 Support for the president is coded when legislators
opposed impeachment procedures. In the case of congressional appoint-
ments, Article #82 of the Constitution requires a qualified majority to elect
the General Comptroller and an absolute majority to elect other officials.
Support for the president is coded when legislators voted for the president’s
preferred candidate or “candidato oficial.”
To measure patterns of party unity, the model calculates the differ-
ence (absolute value) between the number of party members of party i
who voted for the initiative j (AYE) and those who voted against (NAY)
divided by the total number of votes. The resulting score varies from 0
(indicating a perfect split vote) to 1 (unanimity). In addition, there are
four modifications to the sample. The fi rst one is to exclude from the
analysis all parties with two or fewer members to avoid interpreting vot-
ing trends when there are so few permutations possible (Carey 2007).
The second step is to correct for upward bias, produced by the legisla-
tors’ tendency to vote together when they are in small parties. The prob-
lem of “infl ated unity scores” is corrected by using random sampling to
make the larger parties small, and then taking the means of the random
samples as the new corrected cohesion scores (Desposato 2005). The
third step is to avoid overestimating party unity by discarding the votes
in which a consensus prevailed. The analysis considers votes in which at
least 25% of party members opposed the winning side, thus reducing the
data universe to 38 votes (Mainwaring and Pérez-Liñán 1997). Finally,
dummy variables are added to control for each vote type, assuming that
the bargaining of voting for economic laws, impeaching a cabinet mem-
ber, or designating economic and control authorities respond to different
rationales.
Explaining Party Unity Scores

The analysis of roll call data in Ecuador suggests that party-centered
approaches may be appropriate to explain legislative dynamics in Ecuador.
In the absence of legal restrictions or punishments for dissent, the elevated
unity scores found in Ecuador come as an unexpected and remarkable fi nd-
ing. This section discusses the variation of party unity patterns, and the
implications of these fi ndings for coalition-making are discussed at the end
of the chapter.
The data shows that Ecuadorian legislators seem to have high incen-
tives to vote within party boundaries, with higher unity scores among more
ideological parties (especially on the left) and lower scores, as expected,
among centrist, personalist and populist party organizations. Legislators
from the center right face significant lower opportunity costs for defection
since their ideological distances may be closer to the president’s ideal policy
points than those from leftist legislators. The main predictor of party unity
is the party’s ideological tendency and the voting issue at stake. Figure
4.1 compares unity scores on executive-led initiatives of economic reform
(type-I votes) and congressional impeachments of economic cabinet minis-
ters (type-II votes).7
Figure 4.1 Average party unity by party ideology in Ecuador (1980–2000).

In general, two factors may explain why there is more variation in
party unity scores in economic votes than impeachment votes. In the fi rst
place, the impeachment of cabinet ministers and other executive officials
required fi xed voting thresholds, compared to the relative voting thresh-
olds required for the approval of economic votes. The presence of a lower
majority threshold allows more opportunities to craft legislative majori-
ties with different political partners, including the strategic “release” of
inconsequential or marginal votes that are not required for completing a
majority. In the case of a fi xed majority threshold, every vote, including
absences and abstentions, counts to approve legislation. A second factor
refers to the legislative visibility and the expected political gains of clos-
ing ranks behind a party organization when it comes to supporting or
opposing the impeachment of a direct government collaborator such as
cabinet ministers.
The variation in parties voting unity along ideological lines, is evalu-
ated according to Coppedge’s classification of Latin American parties
(Coppedge 1998). Consistent with previous assessments of party discipline
in Brazil, Table 4.2 confi rms that Ecuadorian parties at the extremes of
the ideological spectrum have higher unity scores than moderate parties or
centrist catch-all parties (Amorim Neto and Santos 2001; Figueiredo and
Limongi 2000; Mainwaring and Pérez-Liñán 1997).
In Ecuador, more homogenous or well-defi ned constituents can also con-
tribute to higher unity scores. The narrow and well-defi ned constituency of
the Popular Democratic Movement (MPD), which is made of some labor
unions, teachers, and truck and bus drivers, helps explain voting unity in
this leftist party (0.94). A similar explanation applies to the indigenous
movement Pachakutik (PCK), where, according to their legislative leader,
Nina Pacari, voting unity is derived from a direct mandate received from
their bases of support; although there were no formal mechanisms to pun-
ish cases of party indiscipline, often indigenous comunidades would stage
public bashings as a symbol and reminder to party delegates that they are
fully accountable to their voters.8
At the other end of the spectrum, party unity in the rightist Social
Christian Party (PSC) (0.96) is largely explained by two factors. First,
the socio-economic homogeneity of its party ranks (upper-middle class)
and the predominant leadership style of León Febres Cordero, former
president of Ecuador (1984–1988) and the party’s patriarch. In a 1996
interview reported by Flavia Freidenberg and Manuel Alcántara (2001),
20 out of 21 PSC party members interviewed concurred that Febres Cor-
dero is “a key person for making decisions and commanding the party.
(2001: 70)” This sign of leadership is more relevant because at the time
Febres Cordero was the mayor of Guayaquil and did not hold any (for-
mal) positions in the national leadership. Parties to the left of center,
like Democratic Left (ID), and the Christian Democrats before 1993
(DP), show lower unity scores (0.90), but still higher than the average
Table 4.2 Party Unity Scores by Ideology and Vote Type in Ecuador (1980–2000).
Party Years Economic Cabinet Official Weighted*

Votes Impeachments Designations Unity Score
Left Parties 0.945

MPD 1984-1995 1.000 0.956 1.000 0.988
PSE 1987-1990 1.000 0.800 1.000 0.944
PCK 1996-2000 0.667 0.750 1.000 0.904
Left of Center 0.906

ID 1980-2000 0.913 0.793 0.960 0.910
DP 1980-1993 1.000 0.851 0.924 0.903
Center/Populist 0.890
PRE 1984-2000 0.796 0.836 0.990 0.931
CFP 1980-1990 1.000 0.637 0.927 0.850
Right of Center 0.850

DP 1994-2000 0.654 0.694 1.000 0.799
FRA 1984-2000 0.500 0.787 1.000 0.901
Right Parties 0.944

PCE 1980-1998 1.000 0.841 0.903 0.893
PLRE 1980-1990 1.000 1.000 0.933 0.957
PUR 1992-1993 1.000 0.944 0.961
PSC 1984-2000 1.000 0.869 1.000 0.963
N= 3 11 25 39
Grand Total 1980-2000 0.864 0.810 0.962 0.912
Parties: Popular Democratic Movement (MPD), Socialist Party (PSE), Pachakutik (PCK),
Democratic Left (ID), Christian Democrats (DP), Roldosist Party (PRE), Coalition of Popular
(CFP), Radical Alfarista Front (FRA), Conservatives (PCE), Liberals (PLRE), Republican
Unity (PUR), and Social Christian Party (PSC).
* Weighted by sample size.
party unity scores of catch-all parties. In 1999, ID leader Paco Mon-
cayo explained his party’s tendency for unified voting to the fact that
members shared a similar socioeconomic background and the party
leadership actively promoted internal debates and generated consensus
before agreements reached the voting floor.9 Located in the center of
the ideological spectrum, the Coalition of Popular Forces (CFP) and the
Roldosist Party (PRE) showed a lower average unity score than the rest
of parties (0.89). Deriving their electoral strength from the same elec-
toral base of support, the two Coast-based catch-all parties (PRE and
CFP) have combined some strong local leadership with the image of a
charismatic leader: Asaad Bucaram in the 1970s and early 1980s for
CFP followers, and the cult of Abdalá Bucaram in the 1990s in PRE
(Freidenberg 2003). The least disciplined parties in Ecuador are located
to the right of center of the ideological spectrum: the Radical Alfarista
Front (FRA) and the Christian Democrats after 1993 (DP). It is plausible
that one of the causes for DP’s falling unity scores after 1993 (from 0.90
to 0.79 afterwards) was a failed strategy of ideological relocation. Dur-
ing the 1993 party convention, DP leader and former president Osvaldo
Hurtado pushed the party towards adopting a clearer market-oriented
approach, more akin to an agenda of liberal economic reforms of the
time. This sudden ideological shift represented a significant departure
from the more state-based DP with which local and national leaders had
originally affi liated (Mejía Acosta 2002). The “DP-stroika” was preceded
and accompanied by serious leadership confl icts with Hurtado over the
1992 presidential election that resulted in the disaffi liation of prominent
party leaders and a greater sense of disconnection with their voters (Con-
aghan 1995). Even though DP regained momentum with the election of
President Mahuad in 1998, two factions left the party soon after his fall
in January 2000: the Hurtado-led “CORDES” group and the business-
oriented Coastal “MIN.”
The 1996 Mateos and Alcántara survey of the Ecuadorian Congress
confi rms that deputies have different perceptions of party unity depend-
ing on their ideological affiliation (Mateos and Alcántara 1998). While
deputies from the right and center are more tolerant towards party indis-
cipline, those on the left expressed strong feelings in favor of sanctioning
and even expelling those who vote against party decisions (Mateos and
Alcántara 1998: 89). These attitudes are also consistent with responses to
“how important” they think it is to obtain resources for their communities:
100% of deputies from center parties, 96% from the right and 57% from
the left (1998: 89–90). Recall that legislators’ strong “electoral connection”
incentives should oppose the logic of party unity unless party leaders are
effectively contributing to advance their members’ local demands by way of
selective compensations.
A regression analysis of the determinants of party discipline in Ecuador
(not reported here) yielded disappointing results. Even though there is a
significantly negative correlation between the size of the parties and levels
of party unity (-0.22), there is no significant impact of the former on the
latter. As mentioned earlier, correcting for upward bias artificially inflates
the voting scores of larger parties, thus washing away the relationship
between size and discipline (Desposato 2005). In this sample, neither the
natural or corrected unity scores yielded significant results. Nor is there
significant evidence that the electoral calendar had a negative impact on
legislative unity. These variables become relevant for explaining the level
but not the direction of party support, especially when it comes to endors-
ing or opposing the president’s agenda for economic reforms. The next
section addresses these issues.
Explaining Party Voting with the President

How does party unity influence the presidential strategies for bargaining
with the legislature? Are presidents likely to engage with highly disciplined
parties only or do parties tend to vote in block because they expect to receive
presidential rewards? What other factors, ideological, rents or electoral cal-
culations affect the legislators’ decision to vote with the president? The fol-
lowing section develops a linear regression analysis to explain the tendency
of parties to vote with the president, defined as the share of party members
who favored the president’s proposal on any given vote. The unit of analy-
sis is the unity score of each party per vote taken, for a total of 240 cases.10
According to the proposed framework, higher shares of party members vot-
ing for the president’s proposal (high voting unity) would suggest that there
is effective pro-government brokerage in the legislature; conversely, lower
shares of intra-party support would indicate a larger share of opposition
votes, presumably due to the president’s inability to gather partisan support.
Table 4.3 shows the regression estimates for voting with the president.
Searching for Reliable Legislative Partners

The data responds in ambiguous ways to the claim that presidents would
prefer to bargain with larger, more disciplined partners in order to lower
transaction costs. The fi rst premise about the size of the coalition partner is
not confi rmed nor fully rejected by the existing evidence. Models A and B
show there is a negative, though not significant, impact of the relative size
of a party on its voting likelihood. This could be due simply to the fact that
larger parties could be present in both the government and the opposition
majorities in the Ecuadorian Congress. For example, the leftist ID and the
rightist PSC have traditionally gained the largest shares of seats but gener-
ally did not share voting coalitions due to entrenched significant regional,
ideological and leadership differences.
The second premise advances the argument that presidents also care
about reliable partners. This interaction is not free from being interpreted
Table 4.3 Regression Estimates for Voting with the President in Ecuador: 1980–2000.
Dependent Model A Model B Model C Model D

Variable: Share of party
members voting with the
president
Constant 0.677*** 0.958*** 0.818*** 0.643

(0.170) (0.065) (0.080) (0.165)
Relative Party Size -0.133 0.102
(0.168) (0.220)
Average Party Unity 0.372** 0.351**
(0.168) (0.166)
“Independents” Party 0.228* 0.252*** 0.244***
(0.049) (0.055) (0.052)
Distance Party-President -0.002* -0.003** -0.002*
(0.001) (0.001) (0.001)
Ideology 0.022
(1-left, 5=right) (0.017)
Electoral Year 0.049
(0.053)
Elapsed Legislative Term -0.312***
(0.097)
First Year (honeymoon) 0.058 0.042
(0.046) (0.048)
Job Approval Rates -0.002
(President) (0.002)
Economic Laws -0.264*** -0.330*** -0.289***
(0.093) (0.086) (0.089)
Impeachments -0.415*** -0.434*** -0.393***
(0.063) (0.054) (0.061)
N 240 240 240 240
R-Squared 0.360 0.091 0.376 0.391
as a tautology: Were presidents more likely to build coalitions around disci-

plined parties? Or did parties show high unity scores because they received
political and material benefits from the presidency? To partially address this
endogeneity, the model uses the average (corrected) unity scores for each
party to capture previous party unity scores in that year.11 The evidence from
models A and D supports the argument that parties with a previous history
of high party unity produced higher shares of pro-government voting.
Bargaining “On Its Own Merits”
The empirical analysis does not fi nd any impact of the party’s ideological
position—along Coppedge’s five-point scale—on its likelihood of voting
with the president (see Model C in Table 4.3). Rather, evidence confi rms
that legislative parties whose policy preferences are closest to the presi-
dent’s ideological position along a one-dimensional space are more likely
to vote with the president (Downs 1957; Enelow and Hinich 1984; Kre-
hbiel 1998). Models A, B and D report that a smaller average distance
between the party’s ideal—mean left-right—position and the president’s
preferred position had a positive and significant effect on party voting.
The mean left-right position is defi ned as “the dispersion of the vote away
from the relative center of the party system” (Coppedge 1998: 556).
The decision of presidents to choose ideologically close partners and
pass legislation “by its own merits” challenges conventional assumptions
that Ecuadorian parties are non-ideological and opens the possibility that
presidents may have chosen to bargain policy concessions with opposition
parties as a fi rst step towards securing legislative support. This fi nding is
consistent with previous studies of presidential bargaining and fiscal per-
formance in Latin America (Amorim Neto and Santos 2001; Mejía Acosta
and Coppedge 2001).
Vote Buying and “The Man With a Suitcase”
Given the uncertainty of outcomes and the high transaction costs

involved, it has been previously argued that individual vote-buying
should be a marginal strategy for presidents. Recall that the likelihood
of individual voters becoming pivotal players (for making or breaking a
majority) depended on the size of the voting threshold and their ideologi-
cal distance from the president’s most preferred policies (Krehbiel 1998;
Cameron 2000; Londregan 2002). To see whether individual legislators
were more or less likely to vote with the president’s proposals, while
keeping consistent with the units of analysis, the empirical test treated
all “independent legislators” or party defectors as a single block and
evaluated its likelihood of voting with the president. Models C and D
in Table 4.3 report that these “independent” parties had a positive and
significant impact on government voting. An example of an “indepen-
dent party” was the 1980 Roldosista Group, composed of 17 legislators
that defected from the CFP leader Asaad Bucaram because he adopted
an anti-government collaboration stance against President Roldós. GR
deputies maintained close relationships with the government and even
supported Roldós’s successor, President Hurtado. In a similar way, a
group of legislators defected from the government’s Democracia Popular
party in August 2000, after the fall of the President Mahuad. The newly
formed Movement for National Integration (MIN) quickly became a
dynamic legislative partner who consistently voted with Mahuad’s suc-
cessor President Gustavo Noboa. A full account of the payments received
by “independent” groups or individuals is offered in Chapter 6. While
these payments were not reported in any official way, suffice here to say
that some of these rewards came in the form of government transfers to
provinces or usage of the executive’s discretionary spending. Further-
more, the media often reported stories of “a man with a suitcase” (el
hombre del maletín) walking down the hallways of Congress offering to
purchase the votes of legislative mavericks. Chapter 5 further explores
how these party defectors formed new clusters or proto-parties, delegated
decision-making powers to appointed leaders, who engaged, in turn, in
wholesale bargaining with presidents in exchange of legislative support.
The Electoral Calendar and “Ghost Coalitions”

Were legislators more likely to vote with the president during his honeymoon
period—right after elections take place—but less likely to do so as new elec-
tions approached? Model findings show that the proximity of new elections
coincided with lower party unity scores, and wider ideological differences
between the median legislative party and the president’s policy position.
Model D reports that the number of elapsed months since the begin-
ning of the legislative term has a negative and signifi cant impact over
the percentage of government voting in parties. This fi nding is consis-
tent with the notion that the “tyranny” of the electoral calendar affects
the president’s ability to gather legislative support in Congress (Altman
2000; Amorim Neto 2001). Descriptive statistics show that pro-govern-
ment voting among parties occurs during the fi rst or honeymoon year,
rather than during the last year of the mandate. This fi nding is not cor-
roborated by the statistical analysis, however. The evolution of the presi-
dential mandate—and the proximity of new elections—does not appear
to be related with decreasing job approval rates, either. In other words,
the evaluations of political reputation did not have any significant impact
on the degree of government voting inside parties. While this fi nding
goes against the conventional wisdom that legislators avoid voting for
bills presented by unpopular presidents, it is consistent with the fun-
damental logic of ghost coalitions. Presidents and parties maintained
an important degree of legislative cooperation through the exchange of
votes and concessions, but these alliances were concealed from the pub-
lic scrutiny to preserve the legislators’ electoral liability of collaborating
with unpopular presidents.
Economic Laws, Impeachments and Congressional Appointments
There are significant variations between the types of votes evaluated by
different party discipline models. As mentioned earlier, dummy variables
capture the impact of three sets of issues: economic reforms (Type I), eco-
nomic cabinet and executive impeachments (Type II), and congressional
appointments of control authorities (Type III-constant). Both Type I and
Type II variables had a significant and negative impact on the likelihood
of government voting, suggesting that vote-specific factors played a role in
shaping the fi nal outcome as well.
DISCUSSION: LEGISLATIVE BROKERS VS. FREE AGENTS
The empirical results reported in this chapter show that Ecuadorian legisla-
tors were likely to vote together with their parties on critical issues, and in
average, parties with high unity scores were more likely to support the pres-
ident’s agenda. These fi ndings challenge long-held assumptions about the
low levels of party discipline in the Ecuadorian Congress and propose an
alternative interpretation of legislative dynamics that is centered on legisla-
tive parties, not on individual legislators. The presence of high unity scores
suggest that even in fragmented and volatile legislatures, party whips or
legislative brokers played a critical role for ensuring unified voting of the
rank and file.
One of the critical arguments of this book is that, despite formal con-
straints on the influence of party leaders over the rank and fi le, there were
many informal mechanisms through which leaders asserted themselves
as necessary brokers to advance the interests of party members. As dis-
cussed earlier in this chapter, it is unclear whether legislative leaders had
sufficient powers to influence the political careers of the rank and fi le.
When leaders had strong powers to select party candidates and decide on
allocation of seats before 1996, party members were not allowed to seek
immediate reelection; after the 1998 election, when legislators no longer
faced term limits, the personalized voting rule limited for a few years the
effective influence of party leaders on candidate selection and seat alloca-
tion. Yet, party leaders were important to advance legislators’ rent-seek-
ing, vote-seeking and office-seeking ambitions (Fenno 1973; Strom 1990;
Altman 2000). In other words, party membership was “instrumental” to
advancing legislators’ ideological, institutional and distributive concerns
(Desposato 2006). For one thing, leaders remained important agents to
advance their legislators’ progressive ambitions (Carey 2007; Samuels
2002: 315–6), helping them attain political office (elected or not) beyond
the congressional arena. Leaders could also advance—or block—policy-
making initiatives by controlling the legislative agenda through commit-
tee allocation, voting procedures, and quorum requirements. Finally, and
more immediately, leaders could help the rank and fi le with particularis-
tic favors for their individual benefit or their districts’, such as business
concessions and licenses, or government jobs for their friends and family
members.
From the president’s perspective, the brokering role provided by party
leaders was critical for coalition success: leaders reduced the costs and
uncertainties of negotiating with multiple parties in the legislature. On
the one hand, they were aware of the needs and demands of legislators
when negotiating legislative support with the executive. On the other
hand, leaders were agents responsible for delivering the necessary votes
to pass the government-led reforms. Without effective leaders, presidents
could in theory seek the support of a different legislative partner, and
party members will be likely to seek a more reliable broker to advance
their own ambitions.
A couple of examples illustrate that leaders negotiated “mixed pack-
ages” with the executive in exchange for votes. According to an Ecuador-
ian newspaper, the son of former president Abdalá Bucaram and leader
of the Roldosista bloc (PRE), Jacobo Bucaram Pulley, negotiated a leg-
islative agreement with the government. In exchange, the party would
obtain embassies in Russia and Panama, the Urban Development Min-
istry, fi scal transferences for (PRE-Governed districts) Esmeraldas, Los
Rios and Machala, as well as the reorganization of Electoral Tribunals
and the Constitutional Tribunal.12 Another arena subject to political
bargaining was the political conformation and control of the judicial
system and the structure of courts, and the administration of Customs
and importing regulations. In 1982, the CFP militant and leader Gary
Esparza was reportedly appointed as head of the Customs Administra-
tion Authority by President Hurtado, as a “good will gesture” to secure
the votes of his legislative bloc (Mills 1984).
Given the advantages of negotiating “in bloc” with the executive,
why—and when—would individual legislators choose to defy leadership
and go alone on a vote? Strictly speaking, there are two possible scenar-
ios: when legislators oppose their leadership and the president, and when
they oppose the party leader to vote with the president. The fi rst scenario
could be explained as a marginal position-taking strategy, where the leg-
islator signals her rebellion against the party and the government to her
voters, knowing that the leader is unwilling or unable to sanction her
discourse. An example is legislator Leopoldo “Polo” Baquerizo (1998–
2002), a popular Guayaquil TV show host, who used his popular appeal
to bring votes to the sponsoring Christian Democratic (DP) party. Polo
Baquerizo often appeared as a legislative underdog, introducing bills that
went against the party line and the government’s, such as a bill to sub-
sidize the costs of utilities for retired people, in order to maintain his
political appeal with those who elected him.
In the second scenario, when party members defect their party line in
order to vote with the president, there is an implicit calculation that the
selling of a vote would yield an expected benefit greater than the internal
cost of dissent. Like the previous type, these legislators are local caudillos
who own or have access to local media, business or sporting clubs, and
they cultivate their own clientelistic networks in the province. If the party
leader failed to deliver the benefits of government coalitions, local cau-
dillos were in a position to take their “business”—or their electoral base
of support—to another party that offered better bargaining prospects or
went directly to negotiate coalition payoffs with the executive.
The chapter uses roll call analysis to make a fi rst empirical assessment of
party unity patterns in Ecuador. Even after eliminating non-controversial
votes and controlling for measurement bias, the chapter fi nds surprisingly
high voting unity among Ecuador’s “unruly” parties. It also shows that
party unity changes along the ideological spectrum, with more disciplined
parties located at the left and right of the ideological spectrum, and less
disciplined parties clustering around the median legislator.
The empirical fi ndings reinforce existing contributions that highlight the
formal and informal roles played by party leaders (Carey 2007; Figueiredo
and Limongi 2000) and presidents (Amorim Neto and Santos 2001) in pro-
ducing high party discipline even in a fragmented legislature. Party leaders
are modeled as political brokers who gather the necessary votes to pass the
president’s agenda in exchange for policy concessions, key cabinet posi-
tions, pork and patronage for the rank and fi le. The flow of presidential
rewards in turn expands and reinforces the informal authority that party
leaders have over the rank and file.
High unity scores also helped enhance the party’s reputation as a reli-
able coalition partner. The model fi nds that parties who had a previous
record of discipline in any given year were more likely to vote for the
president’s proposals in subsequent votes. Unfortunately, there is no avail-
able data in Ecuador to directly match whether disciplined voting was
associated with larger or consistent government transfers to the districts
of loyal legislators. Nevertheless, this conclusion can be inferred given the
fact that parties who voted with the government featured higher unity
scores than opposition parties.
Other fi ndings indicate that the likelihood of government voting
decreased with the proximity of new elections, but remained unaffected by
the ideological preferences of political parties.
The chapter fi ndings suggest that the presidential strategy of individ-
ual vote-buying—purchasing individual legislators with selective material
rewards—was not a widespread practice as commonly believed, but rather
a marginal decision to provide insurance against uncertain voting majori-
ties. When presidents opted to break opposition parties and bypass party
leaders to attract a few defectors, these rebel legislators were usually indi-
viduals with short legislative careers, elected in smaller—usually poorer—
districts, and with a previous record of party switching. The next chapter
explores whether who the pivotal players are, where they come from, what
they want, and most importantly, when they vote to defy the party line or
to abandon the party permanently.
5 Voting at the Margins
Pivotal Players and Coalition-Making
Why do legislators sometimes challenge the party leaders and vote against
the official party line? When do some legislators who vote with the gov-
ernment strategically challenge their party on selected votes only, while
others opt for outright (public) party defections? The occurrence of party
defections and party dissidences is critical to understand the dynamics
of coalition-making: these events effectively disrupt the electoral link
between voters’ policy preferences and their representative’s actions, bring
uncertainty to the composition and durability of congressional majori-
ties, and alter the structure of the party system as a whole (Mainwaring
1999:146; see also Linz and Valenzuela 1994; Jones 1995; Mainwaring
and Shugart 1997; Amorim Neto 1998b).
This chapter frames the legislator’s voting dilemma around three pos-
sible choices: to stay with the party line (loyalty), to question the party’s
official line (voice), or to break away from the party (exit). According to
the theoretical framework outlined in Chapter 2, party defections will
tend to happen when an individual or pivotal legislator decides to chal-
lenge the party line and vote with the president in exchange for some
pork and patronage.1 In this bargaining game, party leaders lacked the
electoral or legislative leverage to induce unified voting.
Consistent with empirical fi ndings reported in Chapter 4, the analysis
of party switching, also known as “camisetazos” or change of shirts in
Ecuador, illustrates that defections in general were more an exception
than a rule. Rather than being opportunistic agents willing to vote with
the highest bidder, party switchers conformed to a well-defi ned political
profi le, and usually switched in blocks, at particular points in time. The
chapter shows that camisetazos were motivated by unique incentives to
develop political careers outside the established parties and these prac-
tices were tolerated, for most of the time, by the absence of legal barriers
or sanctions to prevent this kind of behavior. Switchers were likely to have
a strong connection to local clienteles (most defectors come from small
provinces), and were likely to avoid high relocation costs in the ideologi-
cal spectrum (legislators from right or left parties were less likely to defect
than “center” legislators). Defectors were more likely to abandon their
parties at the beginning or at the end of the legislative period, to maxi-
mize the political benefits of electoral years.
An account of party switching incidents shows that there were 218
defections between 1979 and 2002. Taking into account the total number
of legislators-per-year that sat in Congress during that period (2002), we
fi nd that on average, approximately 11% of legislators switched parties
every year. Interpreting these results in comparative perspective is a dif-
ficult matter given the different reporting formats of each country. Yet, a
preliminary survey of party switching rates in three other Latin Ameri-
can countries suggests that Ecuadorian legislators tend to defect less
frequently than their Brazilian or Guatemalan counterparts. Applying a
similar aggregation rule (number of switches divided by legislators-per-
year), I fi nd that an average of 12.3% of Brazilian legislators switched out
of their parties every year between 1990 and 2006, and 16.7% of Guate-
malan legislators did the same between 2000 and 2008 (Desposato 2006;
Fortin 2008). 2 The other Latin American case for which party defection
rates were identified is Panama, with less than 5% of legislators switching
parties in a given year (Guevara Mann 2001).
The following pages explore patterns of variation for the Ecuadorian
case. The next section explores in greater detail the individual motivations
to defect, the potential payoffs and the costs involved with abandoning
the party organization. The next two sections propose a measure of party
switches and test the model. The fourth section reinforces the validity of
fi ndings by extending the party defections model to explain party dissent
or undisciplined voting. The fi fth section compares the institutional pro-
fi les of these two types of pivotal players—dissenters and defectors—and
concludes.
EXIT, VOICE AND LOYALTY: THE

PIVOTAL PLAYER’S DILEMMA
Party switching is defi ned as the legislator’s decision to abandon the party
label under which he or she was elected, in order to join another party
or to remain independent of political affi liation. As illustrated in Chap-
ter 3, this defi nitive breach of party loyalty must be distinguished from
party indiscipline, which occurs when legislators simply voice their dis-
agreements by voting against the established party line on a given vote
(Krehbiel 1998; Ames 2001; Morgenstern 2004). The individual decision
to stay or leave the party is well captured by Albert Hirschman’s Exit,
Voice and Loyalty dilemma (1970). Initially proposed to analyze con-
sumer response to quality deterioration in a product, Hirschman explains
that dissatisfied consumers will choose to switch (exit) to another prod-
uct when they have exhausted the opportunities to raise their complaints
(voice) to the producer (Hirschman 1970). The empirical implication is
Voting at the Margins: Pivotal Players and Coalition-Making 87
that an effective combination of voice and exit can be useful to heighten
product quality and improve the organization (Kato 1998: 858). While
this chapter cannot test whether party switchers and dissidents had a
positive effect on the quality of the organization, it underscores the rea-
sons these agents chose to disagree with some party decisions or to make
a defi nite choice and abandon the party organization.
In the legislative arena, the value of party unity hinges on the implicit
notion that party members share common political goals and objectives,
which, in turn, are reflected by the party’s policy platforms (Downs 1957;
Aldrich 1995). In this sense, political organizations are instrumental to
solving their members’ collective action dilemmas and maximizing their
electoral, office or policy ambitions (Strom 1990; Cox and McCubbins
1993). Confl ict appears when party members voice different ideas about
their own notion of the public good and the party’s idea of collective good
(Kato 1998: 859). Chapter 4 explored the instruments and motivations
available to party leaders to enforce disciplined voting. This chapter is
mostly concerned with the legislator’s perspective and the possibility of
permanently defecting from a party organization. The decision of break-
ing party loyalty is a rational cost-benefit decision by which legislators
“compare the deterioration, disutility, discomfort and shame of remain-
ing a member to the prospective damage which would be infl icted on
(them) as prospective nonmember(s) ( . . . ) by the additional deteriora-
tion that would occur if (they) were to get out” (Hirschman 1970, cited
in Kato 1998: 858). Party defections occur when the expected political
benefit from becoming a free agent exceeds the perceived (electoral or
legislative) cost of breaking away from their organization (Kato 1998;
Mainwaring 1999). The next section explores in more detail the benefits
and the costs of party switching.
Individual Motivations to Defect: the Goals of Pivotal Players

The fi rst conceptual problem to the question of party defections is to
defi ne which goals legislators are trying to maximize. Chapter 2 discussed
the four goals that ambitious legislators are seeking to obtain in one way
or another: votes, office, policy and rents (Fenno 1973; Strom 1990; Alt-
man 2000; Desposato 2006). In the Ecuadorian context, party desertion
is perceived to be a way to advancing these goals when the leadership or
the organization constrains the legislator’s ambition.
If legislators can solve their ideological or material interests by opt-
ing out of their parties, why don’t we observe higher rates of switching
in most democracies? Conversely, why don’t we observe higher disunity
rates? The answer partly depends on whom they are accountable to,
and how the erosion of political reputation affects their future ambi-
tions. According to David Mayhew, reelection should be considered the
proximate goal of every legislative agent: if you do not get reelected, you
cannot seek office or policy (1974). In turn, pursuing good policies and
taking care of the voters are necessary instruments to securing access to
political power (Mayhew 1974: 16). In this logic, a legislator would be
more likely to defect from a party that hinders the development of his or
her political career, by enacting policies that go against the interests of
their constituents, or by directly challenging their own political advance-
ment. Beyond the U.S. arena, electoral motivations to defect are believed
to be shaped by different electoral systems, with closed-list proportional
systems strengthening the importance of party membership and open-list/
personalized systems awarding votes to individual candidates regardless
of their party label (Carey and Shugart 1995). However, Mainwaring is
skeptical that Mayhew’s electoral connection could explain individual
decisions to change parties in third-wave democracies (1999). Making his
case for open-list PR Brazil, he argues that “party switching by individu-
als and mergers and schisms ( . . . ) are rarely responses to below” (Main-
waring 1999: 56). While cultivating a personal vote is useful for securing
candidacy and winning the election in the U.S. context, these are two
different goals in Brazil. Legislators considering switching parties need
to consider both the preferences of the electorate as well as the potential
influence of party elites in securing their candidacy (Mainwaring 1999:
244–5). 3 Mainwaring’s argument does not prevent the possibility that
“pressures from below” may very well shape the individual’s decision to
defect, when he concludes: “enough politicians seek reelection to regard it
as a powerful motivation in politics” (1999: 246).
As discussed in Chapter 3, Ecuador is an ideal case to test the elec-
toral motivations to party dissent and switching under changing electoral
environments. Throughout much of the current democratic period (1979–
1996), party leaders had the monopoly to candidate nomination due to
the existence of a closed-list proportional representation rule. Yet, at the
same time, the constitution did not allow for immediate reelection for the
president, legislators, city mayors and other local public officials (Mejía
Acosta 2003). The combination of these features would prevent a party-
centered explanation for party switching, since party elites could not play
a predominant role in the decision to defect (or join a new party).4 Only
a year after the immediate and indefi nite reelection became an option
for Ecuadorian legislators, a new electoral system was adopted in 1996
to select legislators through an open-list system (Pachano 1998). These
reforms called for a voter-oriented explanation to switching, since legisla-
tors had more incentives to develop a personal vote with little or no con-
nection to their party leadership. 5
What happens to the electoral motivations to defect, when legislators
are not allowed to immediately seek legislative reelection? What alterna-
tive goals are available for ambitious politicians, and what is the purpose
of switching parties? If we accept the more general premise that party
switchers want to “advance a political career,” legislators may seek to
.
advance their ambitions outside the legislative arena. One option is to

pursue a political career at the local or state—provincial—level as in the
case of Mexico (Lujambio 1995). The other is to pursue a position in the
government bureaucracy, as in the case of Costa Rica. In the presence
of midterm elections, outgoing deputies in the fi rst half would have an
incentive to cooperate with the government to obtain executive appoint-
ments for the following two years or with the incoming president (Carey
1996).
In addition to the electoral motivations, there can also be ideologi-
cal motivations to defect from parties (Ames 2002; Desposato 2006).
According to Anthony Downs (1957), political parties provide voters
with information shortcuts to the set of policies they are likely to defend
and fight for in the congressional arena.6 Legislators join parties for ideo-
logical reasons if the party helps them advance their own beliefs and the
interests of their constituents (Aldrich 1995; Cox and McCubbins 1993).
Conversely, a legislator may have incentives to leave the party organiza-
tion if his or her policy preferences consistently deviate from the party’s
policy choices. Does party ideology have a significant role in the con-
text of weakly institutionalized (inchoate) party systems? Evidence from
Brazil suggests that party switching in some cases may be more related
to policy differences and ideological issues than to the distribution of
individual benefits (Mainwaring and Pérez-Liñán 1997: 470; Mainwaring
1999: 144–5).
Equally important to electoral and ideological motivations to defect
is the autonomy that allows deputies to leave their parties (Ames 2002).
If legislators’ political future largely depends on party leaders, they have
strong incentives to cultivate good ties with the leadership and remain
loyal to the party. As illustrated in Chapter 3, party loyalty may also be
rewarded in “legislative currency” by granting legislators privileged com-
mittee assignments and access to positions of political visibility or reputa-
tion; but if the leadership decides to block a legislator’s upward mobility,
he or she may have an incentive to defect from the party and switch to
another organization where he or she can maintain the current legislative
position or obtain a better one (Ames 2001; Mainwaring 1999).
Finally, party membership can be instrumental to gaining access to
other forms of patronage, or distribution of material benefits for the leg-
islator and his or her constituents (Cox and McCubbins 1993; Figueiredo
and Limongi 1995a), especially if the party is aligned with the executive
branch and has some control over government resources (Amorim Neto
and Santos 2001; Desposato 2006). From this perspective, party defec-
tions can be explained as strategic moves to maximize access to (gov-
ernment) resources, thus providing incentives to switching away from
opposition parties and towards parties in the government coalition.
Party Dissent, Switching and Transaction Costs
Thus far, the incentives for party defection have focused on the political
goals that legislators seek to maximize: policy, votes, office or rent. But
as Desposato correctly claims, switching is not an affordable option for
all legislators when the switching involves high transaction costs imposed
by institutional rules or the voters (2002: 10). In other words, the leg-
islator’s decision to defect becomes easier “given the absence of legal
sanctions and (or) the electorate’s toleration of politicians who change
affi liations” (Mainwaring 1999: 146). The extreme institutional sanc-
tion for a party defection would be the loss of the legislative seat, under
the premise that the electoral mandate belongs to parties, not individu-
als. Another indirect form of sanction is the formal banning of “inde-
pendent” parties or individuals to compete for public office. From the
electoral perspective, party switching can be a costly strategy in a con-
text where voters are strongly committed to the policy agenda enacted by
parties. These “programmatic” voters will punish an individual’s party
defection with a loss of credibility and eroding political reputation in the
next campaign.
CRAFTING A MEASURE OF CAMISETAZOS
Modeling Defections
The dependent variable is operationalized as the number of times Ecua-
dorian deputies abandoned their parties between 1979 and 2002. The
units of analysis are broken down into legislator-years (one case = one
legislator in one legislative year); for a total of 2002 cases, that is an aver-
age of 87 legislators in each congressional session during more than 23
years of legislative activity since the return to democracy. Measuring the
rate of individual party changes on a year-to-year basis is a significant
advantage over existing studies for two reasons. The current literature
has developed aggregated indices of “parliamentary change,” taking into
account the total number of deputies that each party gained or lost from
one period to the next (Nicolau 1996). This method is not sensitive to the
fact that party switching rates may cancel each other out if the number
of outgoing legislators in a party equals the number of incoming deputies
(Mainwaring 1999: 142–3). Another problem with aggregate measures
is that legislators can switch parties more than once during a legislative
period (e.g. he or she fi rst becomes independent and then affi liates to
another party) or they can return to Congress under a different party
label in the next election. The current yearly measure successfully cap-
tures these contingencies. Figure 5.1 illustrates the incidence of party
switching. As the chart shows, party defections are closely connected to
Figure 5.1 Frequency distribution of party switching rates. National Ecuadorian

Congress (1979–2002).
the electoral calendar, with a systematic tendency to switch during the

fi rst year in office, independently of the size of Congress. Throughout
this period, the unicameral congress varied in size from 69 legislators in
1979 to 123 in the 1998–2002 periods.
Modeling party switching in Ecuador poses a few methodological
problems. First, there is a skewed distribution of defections compared to
non-defections in a 10 to 1 ratio (a total number of 218 defections in 2002
cases). This biased distribution severely affects the model predictions of a
logistic regression, to the point that all non-switches are perfectly predicted
but nearly no effective switches. Poor logit predictions also prevented the
use of a Heckman selection model, which would measure switches as a
two-stage binary process that explains the political determinants behind
the legislator’s decision to defect out of parties (or not) and secondly,
which of these factors explain the direction of the switch (switching away
from or towards the government coalition).7 Thirdly, party switches were
coded on a yearly basis without a fi ner measure of the exact point in time
in which the switching occurred. This problem prevented the use of Event
History Analysis (EHA), in order to measure the effect of time-varying
exploratory variables on the likelihood of occurrence of an event—a party
defection in this case (Allison 1984; Vermunt 1997). A more substan-
tive reason for not using EHA (which requires coding the elapsed time
between one switch and another) is that the purpose of the analysis is to
determine why a legislator decides to switch, not so much the question of
when the switching takes place (the rate at which party switching is likely
to occur) (Vermunt 1997: 85).
An OLS regression is used to explain the total (cumulative) number
of party switches occurring in the Ecuadorian Congress between 1979
and 2002. Following the logic of duration models, this model specifica-
tion allows me to build in the individual record of party defections into
the explanation of subsequent defections. The tabulation of the cumula-
tive distribution of party switches looks like this: 1455 cases who had
no switches, 381 who had switched once in the past, 132 who switched
twice, 32 three times and 2 who switched four times.8 This coding scheme
would necessarily generate some non-random distribution of errors,
but robust standard errors are reported in all models as a way to par-
tially address the heteroskedasticity problem. The independent variables
include the impact of the legislator’s district size, the size of his or her
party, his or her political career ambitions, his or her ideological affi lia-
tion, the timing of the electoral calendar and other legal constraints. All
these variables are properly anchored in the corresponding literature on
legislative institutions.
Model Predictions and Analysis

An individual’s decision to defect from his or her party takes place when
the expected benefit (electoral, political, ideological or distributional)
from switching is greater than the legal impediments for defection (Main-
waring 1999: 146). The sizes of the electoral districts from which legisla-
tors come offer a fi rst test of the electoral motivations argument. When
legislators come from small districts with well-defi ned constituencies,
they become more responsive to voters’ demands. Legislators would con-
sider defecting parties if the realignment would serve voters’ demands and
advance their own ambitions (Ames 2002: 195). Conversely, legislators
coming from larger districts would face disperse voter loyalties and more
electoral incentives to advance career prospects through their own party.
There should be a negative relationship between the district magnitude
and the cumulative number of party defections.9
A second test of the electoral connection hypothesis looks at the occur-
rence of party switching events given the presence of elections. Con-
sidering the level of support for the executive, it has been argued that
legislators in presidential systems have little incentives to cooperate with
the executive before election time (Coppedge 1994; Altman 2000). Thus,
more “government-oriented” switching should occur at the beginning of
the term, but as new elections approach and legislators want to avoid
visible cooperation with incumbent presidents, legislators would be more
likely to switch away from government parties.
To determine whether party defections are means to advance political
careers, the model looks at the individual’s number of legislative reelec-
tions and the individual’s committee membership in Congress. If legisla-
tive reelection provides greater job certainty to legislators interested in
developing political careers, then it should decrease incentives for defec-
tion. Conversely, greater job uncertainty, for example, in the absence of
legislative reelection should increase incentives for opportunistic party
switching. 10 The Ecuadorian context allows for testing the impact of both
scenarios, when legislators were able to seek consecutive reelection (after
1996) and when they could not (before 1994).11
A second test of political ambition is whether legislators who already
hold legislative committee appointments are less likely to defect from
their parties. The underlying premise is that legislative committee assign-
ments are institutional rewards for disciplined party members (Mayhew
1974; Cox and McCubbins 1993). For this purpose, a binary variable is
coded to measure individual membership to one of the five Permanent
Legislative Commissions that handle the most relevant bills in Ecuador.12
Another proxy for office-seeking incentives is the number of years a leg-
islator has spent in Congress. Without a merit-based system to appoint
committee members in the Ecuadorian Congress, the expectation is that
committee appointment comes from the party elite and is ratified by the
president of Congress.
To test whether party defections respond to ideological motivations,
the model uses a variable based on Coppedge’s classification of Latin
American political parties (1997).13 Legislators coming from more ideo-
logical (left-wing or right-wing) parties should have fewer incentives to
switching than those coming from centrist or “catch-all” centrist parties
with vague or undefi ned ideologies. The regression includes a dummy to
verify whether members of leftist parties were less inclined to defection
than legislators from other ideological positions.
The model looks at the size of the political party as a proxy to evaluate
the distributive capacity of the political party: the larger the organization,
the greater bargaining capacity it has to extract significant concessions
from the government. Deputies from larger parties would be less able to
extract political benefits outside their organization, and thus they remain
least likely to defect from their parties. This notion is retested using the
percentage of seats held by the legislator’s party and the share of seats
held by the president’s party.
Institutional constraints to prevent party switching in Ecuador were
either too low or weakly enforced during the period of study. The Electoral
Tribunal, legally in charge of licensing parties, tolerated party attribu-
tions and granted legal status to individuals or factions that resulted from
party schisms (Conaghan 1995: 449). Independent legislators were usually
associated with free agents willing and able to take direct payments and
benefits from the president in exchange for much-needed legislative votes.
Independent legislator Nelson León (ID Cañar) explained in 1993 his
motivation for trading legislative support with the government: “It is the
only way in which Provincial Deputies can obtain key public works for
our districts.”14 Party defections were further encouraged when legisla-
tion adopted in 1995 allowed “independent” legislators—not affi liated
to any party label—to run for office. Not surprisingly, this initiative
came from presidents who had the most problems breaking opposi-
tion majorities in Congress. President Febres Cordero tried and failed
this reform in 1986, but President Durán Ballén successfully sponsored
constitutional reform—approved by plebiscite—granting legal status to
independent candidates. After 1998, a congressional reform imposed a
Code of Ethics in an effort to purge legislative corruption. The initiative
was pushed by the government party who wanted to secure their legisla-
tive contingent of 32% of seats in Congress. The Ethics Code established
that party defectors could lose their seats if found guilty by a simple
majority of congressional votes. A variable is included to verify if the
impact of a legislative Code of Ethics, adopted in 1998 reduced the num-
ber of party switches.
Different government administrations are also included to control for
president-specific strategies to break parties and sponsor defections.15
Table 5.1 reports the OLS regression coefficients explaining the number
of party switching events.
ANALYSIS OF PARTY SWITCHING
Party Switching and the Electoral Connection

Empirical fi ndings suggest that there is an electoral connection shaping
the individual legislator’s decision to switch. As predicted, legislators who
come from small districts with well-defi ned constituencies are significantly
more likely to switch parties than those who come from larger provinces.
Although not reported in these models, these observations hold true when
the distinction between National and Provincial deputies is made. With
stable four-year tenure and access to several party privileges, National
Legislators were more interested in developing a political career with the
party, thus avoiding risky acts of disloyalty. Provincial Legislators, in
turn, were more willing to abandon their parties if switching contributed
to advancing their political careers at the local level or in the national
government in the case of legislators who could not seek immediate leg-
islative reelection. A 1996 survey of Ecuadorian legislators confi rms the
nature of the electoral connection in Ecuador: a vast majority of legisla-
tors believe that bringing resources to their regions is a very important
legislative task (Mateos and Alcántara 1998: 90). The reported evidence
qualifies the existing premise about the chronic electoral disconnection in
Table 5.1 Logit Estimates for Explaining the Number of Party Switches 1979–2002.
Independent Variables Model A Model B Model C Model D Model E
Constant 0.426*** 0.334*** 0.349*** 0.775*** 0.574***

(0.052) (0.054) (0.046) (0.059) (0.052)
President’s Party Size -0.2777* -0.029
(0.113) (0.117)
Relative Party Size -0.4580** -0.625*** -0.554*** -0.572***
(0.117) (0.114) (0.115) (0.118)
Ideology -0.147*** -0.157*** -0.157***
(1=center, 3=extremes) (0.016) (0.016) (0.017)
Left Parties -0.216*** -0.217***
(0.023) (0.025)
Committee Membership -0.009 0.015 0.003 0.001
(0.025) (0.025) (0.026) (0.026)
No. of Years in Congress 0.171*** 0.183*** 0.177***
(0.008) (0.009) (0.008)
No. of Reelections 0.400*** 0.400***
(0.025) (0.025)
District Magnitude -0.024*** -0.018*** -0.026*** -0.021*** -0.023***
(0.003) (0.003) (0.003) (0.003) (0.003)
First Year (honeymoon) 0.154***
(0.028)
Electoral Year -0.165***
(0.028)
Elapsed Legislative Term -0.281***
(0.049)
Ethics Code -0.119***
(0.033)
continued
Table 5.1 continued
Hurtado 0.372*** 0.386***

(1981–1984) (0.064) (0.066)
Febres Cordero -0.163*** -0.173***
(1984–1988) (0.042) (0.045)
Borja -0.162** -0.162**
(1988–1992) (0.048) (0.051)
Durán Ballén 0.004 0.088
(1992–1996) (0.049) (0.050)
Bucaram -0.091 -0.186*
(1996–1997) (0.079) (0.079)
Alarcón -0.015 -0.096
(1997–1998) (0.070) (0.073)
Mahuad -0.105* -0.160**
(1998–2000) (0.052) (0.053)
Noboa 0.101* 0.075
(2000–2002) (0.052) (0.053)
N 2002 2002 2002 2002 2002
R-Squared 0.349 0.357 0.343 0.297 0.283
Ecuador (Conaghan 1995; Burbano de Lara and Rowland 1998) and it

shows that vote-oriented concerns are an important cause of party switch-
ing. This party switching pattern is echoed in Brazil, where the number of
defections significantly decreases as legislators come from larger districts,
perhaps because credit-claiming opportunities diminish as the number of
“vote-receiving deputies” increase (Ames 2002: 149).
The electoral connection is aggravated by the fact that the Ecuadorian
legislature features a strong territorial bias that tends to over-represent
smaller districts (Snyder and Samuels 2001). Richard Snyder and David
Samuels correctly argue that some of the problems associated with dis-
proportional territorial representation (malapportionment) include the
formation of “strange bedfellow” coalitions in Congress (e.g. ad hoc
agreements despite important regional differences), and the construction
of “peripheral populist” groups who can hold the policymaking process
hostage to their interests.
Do legislators make strategic defections according to the timing of the
electoral calendar? Regression coefficients suggest that fewer switches do
occur with the gradual approaching of new elections, with more defec-
tions occurring during the fi rst year in office, and fewer defections in
the last—electoral—year (regression models C, B, and A respectively).
Once again, the evidence is consistent with the case of Brazil, where Barry
Ames suggests that deputies switch parties early in the legislative term as
they are enticed by payoffs and selective benefits offered by the president
in exchange of cooperation (Ames 2001; See also Desposato 2006; Main-
waring and Pérez-Liñán 1997).
Party Switching and Political Careers

The number of times a legislator has been elected to Congress is a signifi-
cant proxy to evaluate the legislator’s ability to develop a political career.
Regression fi ndings confi rm that a greater number of reelections have a
positive and significant effect on the number of party defections (mod-
els D and E, Table 5.1). The relationship between party switching and
reelection is best interpreted as a two-way street. First, legislators who
were elected to Congress several times enjoyed more autonomy to defy the
party leadership and switch to a party that would further their political
careers. Secondly, party switching could be instrumental to advancing
legislators’ political careers if they need to detach themselves from a weak
government coalition or associate with a promising party before the next
election. This is the case of Guillermo Hidalgo Bifarini, representative
from the northeastern province of Napo (and later a representative from
the split territory of Orellana) who came back three times to Congress,
each time with a different political party.16 Data from Brazil shows that
deputies are less likely to switch parties if they are not seeking reelection,
but 21.8% of deputies did switch parties once reelected to office (Ames
2002). A second indicator of political ambition, the legislator’s affi lia-
tion to a legislative committee, was not a significant factor to predict
party switching. There is, however, a positive and significant impact of
the number of years a legislator spends in Congress on the occurrence of
party switching (models A-C).
In a context where immediate legislative election was constitutionally
banned for most of the period of study, it makes little sense to measure
individual incentives to build a political career by looking only inside the
congressional arena. The comparative literature suggests that legislators
can develop a sense of progressive ambition by which legislators continue
to pursue political office outside the legislative arena (Carey 1996; Samu-
els 2003). In the two other countries that banned immediate reelection,
Mexico and Costa Rica, legislators sought to develop political careers
in the local government or within the government bureaucracy (Taylor
1992; Lujambio 1995; Carey 1996; Dworak 2003). Given the lack of reli-
able data on political careers in Ecuador, the model makes some infer-
ences and suggests some hypotheses to explain where legislators go when
they are unwilling or unable to return to Congress for another period.
From a comparative perspective, evidence confi rms that legislators where
presidents had the support of a congressional majority (such as Mexico
before 1997, or Costa Rica) had more career opportunities than legisla-
tors in fragmented legislatures. Students of Brazil suggest that legisla-
tors developed short-term careers in Congress, but they were likely to
run for local office or seek bureaucratic appointments when their legis-
lative period ended (Ames 2002, Samuels 2003). In the short run, their
incentives were shaped by committee positions, pork for their districts or
other kinds of personal benefits. As Ames simply put it: “party switch-
ing maximized the short-term gain of a legislative seat” (2002: 72). In
Ecuador, Simón Pachano reports a survey in which nearly 75% of leg-
islators elected between 1979 and 1988 have held some political office
including cabinet ministers, provincial governors, legislators, provincial
councils and/or members of the Electoral and Constitutional Tribunals
(1991: 130) and at least 70% have held some directory position in their
own political parties. Furthermore, the survey shows that at least 50% of
legislators pursued some political office after leaving Congress (Pachano
1991: 174). Although the data does not cover the entire period of study,
it suggests that Ecuadorian legislators may have maintained loyalty ties
with parties in order to advance their personal careers.
Party Switching and Political Ideology

Contrary to most conventional accounts, political ideology is a significant
factor of party switching in the fragmented Ecuadorian Congress. The
political ideology is operationalized as the (absolute) ideological dispersion
along a left-right continuum, ranging from lowest values for center-populist
parties, to highest values for extreme parties.17
Statistical results show that the likelihood of party switching decreases
among more ideological parties: legislators from centrist and populist par-
ties switch parties more often than politicians coming from left or right
parties (models A, B and D in Table 5.1). This is consistent with earlier
regression fi ndings for the 1979–1996 period: the probability (logit) distri-
bution for legislators from center and populist catch-all parties is 50.5%;
it decreases to 31.3% for right-wing legislators, and to 19.0% for left-wing
legislators (Mejía Acosta 1999).
Survey data corroborates ideological variations regarding the causes and
consequences of party switching. When legislators were asked how impor-
tant it is to bring resources to their regions, center-populist parties (PRE)
had the greatest tendency for localism (100% of positive responses), with
decreasing levels among the right (96% of the rightist PSC and 80% of the
moderate DP), and lowest in the left (57% from PCK) (Mateos and Alcán-
tara 1998: 90). When legislators were asked if a political party had the
right to expel a legislator who voted against party decisions, there were
more legislators from the left in complete agreement with this statement
(100% from Pachakutik) than legislators from the right (71% from PSC)
or the center (62% from PRE). A similar decline in support was found
in response to the question of whether legislators should lose their man-
date if they switch parties after the election (86% from PCK, 79% from
PSC, and 77% from PRE). Consistent with the fi ndings of loose discipline
reported in Chapter 4, respondents from the moderate rightist party DP
show higher levels of tolerance to party defections: 50% agree with the
need for expelling undisciplined voters and 70% agree with the need to
recall the mandate of party switchers (Mateos and Alcántara 1998).
Empirical fi ndings are consistent with models of spatial competition:
legislators in centrist, catch-all parties are more able to migrate left or right
of their party, whereas legislators coming from more orthodox parties face
higher relocation costs. The political relevance of the ideological divide
is also consistent with the evidence presented by Mainwaring and Pérez-
Liñán for the fragmented Brazilian Congress where policy differences were
an important factor for party switching (1997: 470). The authors claim
that, even in a weakly institutionalized democracy such as Brazil, legisla-
tors’ ideological orientations could sometimes matter more than gaining
individual benefits (Mainwaring and Pérez-Liñán 1997: 470).
Party Switching and Government Majorities

The empirical evidence corroborates existing model predictions that
presidents, especially those with small legislative contingents, were more
inclined to encourage individual party defections from the opposition
in order to compensate for their weak partisan powers. Table 5.2 shows
that between 1979 and 2002 approximately 79% of legislators defected
from parties that were not part of the president’s coalition to poten-
tially join government ranks. The remaining 21% of the party switchers
moved away from the government party. The historic record shows that
these defections occurred in blocks of legislators rather than as a result
of individual actions. The largest “defection from a government party”
took place in 1980 when half of the CFP legislative contingent split as a
result of a serious confl ict between the party leader Asaad Bucaram and
President Jaime Roldós. A second case of a government party split hap-
pened a few months after President Mahuad was forced out of office in
January 2000. What is interesting to note is that in both cases, defect-
ing legislators formed alternative political movements within Congress,
appointed a new leader and engaged in a round of legislative bargaining
with the new government. After the death of President Jaime Roldós in
1981, the Roldosist Party (PRE) and People, Change and Democracy
(PCD) became at different points coalition partners of the new president
Osvaldo Hurtado. These two legislative movements later transformed
into political parties and ran in the 1984 general elections. The second
case of block switching occurred in August of 2000 when two legisla-
tive factions, the Movement for National Integration (MIN) and Soli-
darity Motherland Movement (MPS), abandoned the government party
Christian Democracy (DP) and at different points bargained legislative
support to the succeeding president, Gustavo Noboa. As it will be later
developed, these instances of defection and regrouping support the prem-
ise that legislators, especially in a highly fragmented setting, were more
likely to benefit from collective bargaining with the government than
acting on their own.
When testing for the size of the president’s party, model A in Table 5.1
corroborates that there is an inverse and significant relationship between
the president’s contingent and party switching. This relationship indicates
that, in the context of a highly fragmented presidential system, party
defections are more likely to happen when the presidential contingent is
smaller. Even when the size of the defector’s party is controlled for, there
is a negative and significant impact on the incidence of party defections.
Potentially, members of “larger” parties enjoy the benefits of greater
access to political resources, perks and patronage from their party lead-
ers in exchange for their loyalty, as explored in Chapter 3. Conversely,
deputies from smaller parties were constrained by scarce or non-existent
resources (most likely because of their marginal status in the government
coalition). In this context, such legislators would be better off selling their
individual support to a government-sponsored coalition in exchange for
personal political favors or material benefits for their districts, rather
than sticking with an inconsequential party organization. An analysis of
Table 5.2 Frequency and Direction of Party Defections with Respect to the
Government Party (1979–2002).
Away Towards Total
No Switches 1784 1784

(100%) (100%)
Party Switches 46 172 218
(21.1%) (78.9%) (100%)
Total 1830 172 2002
(91.41%) (8.59%) (100%)
Pearson C2 = 1539.855***
party switching probabilities confi rms that a legislator from the largest
party in Ecuador had less than a 0.1% possibility of switching, whereas a
legislator coming from the smallest possible party has a 19% probability
of defection (Mejía Acosta 1999).
Barriers to Switching: The Code of Ethics

The statistical analysis suggested that the adoption of the Ethics Code rule
effectively reduced the number of party defections (recall Model B in Table
5.1). The percentage of party switchers did decline from 11.75% before 1998
to 8.95% afterwards. This relative reduction in party defections, however,
must be carefully interpreted because these reforms were adopted in the
context of a voter-oriented electoral system, which would have increased
the electoral incentives for party defections. In practice, the Ethics Code
was rarely used, partly because the legislative committees in charge of rul-
ing against alleged cases of party switching were precisely composed of
parties that benefited from defections. In 1998, two legislators from PRE
crossed the floor to join the government coalition. Again in 2000, a group
of some 20 party splitters successfully bypassed the application of the Eth-
ics Code and formed a new movement of independent politicians, MIN,
which later formed part of the government coalition of President Gustavo
Noboa. This mechanism of “impunity by consent” was one of the many
informal mechanisms used by presidents and legislators to craft legislative
coalitions on a regular basis.
BREAKING THE VOTE: PARTY DISSIDENTS

AND GOVERNMENT COALITIONS
Thus far, I have shown empirical evidence to argue that party switchers are
keen to cultivate a good electoral connection as a means to advance their own
political careers. I argue that party defections were context-specific events,
and most of those occurred to support government majorities. Party switch-
ers share an identifiable and consistent political profile: they tend to come
from smaller districts, centrist ideologies and their defections are carefully
synchronized with the electoral calendar. This section reinforces the thrust
of the argument about pivotal players by extending the analysis to party dis-
senters, legislators who temporarily abandoned party discipline in order to
vote with the government.
The empirical analysis is based on a highly controversial and well-
documented congressional vote on fi scal reform in May of 2001. The
proposed bill was introduced by President Gustavo Noboa as part of the
reforms package needed to cement the dollarization scheme adopted in
2000 and receive fresh credit from the International Monetary Fund. In
order to improve fiscal fi nances, Noboa proposed to increase government
revenues with a hike in the Value Added Tax, from the existing 12% to
15%. Since the early months of 2001, both the President and the Finance
Minister had tried to persuade party leaders of the benefits of adopting a
fi scal package, but the bill—introduced as an economic emergency bill—
was strongly opposed by the congressional blocs.18
Congress denied the president’s reform package on March 29th, and
Noboa threatened to use a partial veto to insist on economic reforms.
Thanks to the 1998 Constitutional reform (Art. 154), the president could
use a partial veto and “resubmit an alternative text” to Congress, which
could be overridden only with a qualified majority (82 of 123 legisla-
tors). If the majority were not met, the bill would automatically become
law. With frustration, the executive acknowledged that other legislative
strategies—with the exception of vote buying—had been tried and failed
to secure support for the proposed fi scal reform.19 With the exception
of the independent MIN group, legislative leaders publicly announced
their opposition to the proposed reforms, and leaders of the rightist PSC
even produced a notarized agreement whereby party members signed
their opposition to the president’s tax increase. Given the use of a partial
veto, the legislative outcome depended on whether the legislative major-
ity could guarantee 82 or more votes to override the veto, or whether the
president could break the qualified majority. According to the Legislative
rules, absent votes were also counted as support for the president.
In the end, the legislative attempt to override the veto was blocked
by 11 votes, 12 abstentions and 22 absences from different parties. A
revised government proposal to set the VAT at 14% became law. Press
accounts reported that “absent” legislators claimed “not being aware
the vote was taken,” “being stuck in traffi c,” “having to attend a family
emergency,” or simply “not being able to decide on a vote and choosing
to abstain.”20 Did legislators sell their loyalty to the government?
In subsequent days, newspapers reported that the pivotal legislators
responsible for the government victory received different types of politi-
cal and material rewards, including fast-track loans for their districts,
patronage and key diplomatic posts for their relatives, and arguably,
some even received cash advances of several thousand dollars. 21 Outraged
party leaders promised to apply the “Ethics Code” to expel those legisla-
tors from their parties, but only one out of more than 20 accused legisla-
tors was effectively thrown out of his party for undisciplined action. 22
The next section uses logit regression analysis to explain the likeli-
hood of a legislator voting with the president in this controversial fi scal
reform vote (1 = for, 0 = against). Table 5.3 illustrates the regression
results.
Party Dissidents and the Electoral Connection
Do legislators bear in mind their “electoral connection” when defect-

ing their parties? A fi rst test is to verify whether legislators coming from
smaller districts have a more direct and visible connection with their vot-
ers or groups of interest, whereas legislators coming from larger districts
have a more diluted and distant relationship with their potential voters.
The statistical analysis reveals that legislators were more likely to defect
their parties and cooperate with the government when they came from
smaller provinces (models A through D in Table 5.3). The underlying logic
is that legislators coming from smaller districts are more vulnerable and
accountable to the pressures of their home constituencies, and vice versa,
legislators coming from larger provinces depend on the workings of the
party structure to advance their own political careers and/or attend their
constituencies through the party machinery. Legislators coming from dis-
tricts where less than four legislators were elected (nearly 40% of Congress)
had a 40% (mean) probability of voting with the president. By contrast,
roughly only one out of four legislators who came from the three largest
electoral districts (Pichincha, Guayas and nationwide), was likely to vote
with the president. Evidently, the territorial malapportionment in Ecuador
Figure 5.2 Probability of voting with the president by district magnitude and party
size. Fiscal reform (May 2001).
Table 5.3 Individual Probability of Voting for Fiscal Reform, Logit Estimates.
Independent Variables Model A Model B Model C Model D
Constant -7.823 2.017** -7.038 0.992

(6.126) (0.985) (6.216) (1.112)
Relative Party Size 5.621 5.175
(4.652) (4.650)
Yearly Avg Party Unity -3.926*** -4.114*** -4.090*** -2.532**
(1.256) (1.188) (1.274) (1.269)
“Independent” Parties (0.867)
(0.790)
Previous Party Switches 1.161*** 1.244*** 0.929** 1.054***
(0.401) (0.426) (0.377) (0.373)
Number of Reelections -0.513* -0.508* -0.513**
(0.276) (0.282) (0.284)
Ideology 1.008 0.218 0.977
(1= left, 5 = right) (0.774) (0.264) (0.793)
Distance Party-President 0.130 0.118
(0.081) (0.082)
Center Parties 1.299
(0.795)
Right Parties 0.553
(0.722)
District Magnitude -0.071* -0.082** -0.084** -0.081**
(0.038) (0.038) (0.038) (0.037)
Success correctly predicted 54.63% 43.21% 42.90% 40.43%

Failure correctly predicted 90.76% 92.00% 94.81% 92.22%
Overall Prediction 81.09% 78.94% 80.92% 78.36%
N 123 123 123 123
Xi2 / Pseudo R2 37.61/0.26 33.49/.023 33.61/0.23 34.1/0.23
Significance levels: * = 0.1, ** = 0.05, *** = 0.01
exacerbated legislators’ incentives to exchange votes for favors with the

executive, in order to provide goods and services to their districts.
Figure 5.2 also illustrates that the impact of the electoral district is
greater than the impact of party size on the likelihood of voting with the
president. Larger parties are more likely to vote with the president than
smaller parties, and legislators representing small and visible audiences
are more likely to put their votes for sale in exchange of particularistic
payments or benefits for their regions. It becomes clear that legislators
representing small and visible audiences are more likely to put their votes
for sale in exchange of particularistic payments or favors for their region
and obtain political advancement. Legislators who were elected under a
closed-list PR system in a larger province would be less visible to their
voters and they would have a harder time claiming favors or resources for
their constituents.
Why did Ecuadorian legislators have incentives to develop an electoral
connection if, for the most part, they could not seek congressional reelec-
tion? It is plausible to presume that an optimal strategy for political sur-
vival in a larger territory disputed by several parties would be to remain
loyal to the party label and contribute to the overall party’s electoral effi-
ciency in the hopes of obtaining collective rewards beyond the legisla-
tive arena. In the case of the vote of Fiscal Reform, press investigations
reported several connections and prizes awarded to defectors, including
diplomatic posts and fast-track credits for their provinces. Arguably, a
clear case of pork trading was legislator Reynaldo Yanchapaxi (DP Coto-
paxi) who, only a few days after supporting the fi scal reform, publicly
thanked the government for starting to build the road in his native prov-
ince when other governments failed to deliver. 23
Party dissidents and political careers

Evidence supports the claim that the success of vote buying as a presiden-
tial strategy hinges on the short-term (legislative) horizons of these poli-
ticians. First, the relationship between party loyalty and party discipline
Figure 5.3 Probability of voting with the president by legislators’ political careers:
party switches and number of reelections. Fiscal reform (May 2001).
is tested by looking at the number of times a legislator has switched away
from his or her original party in the past and current voting. Empirical
results show that a previous party switching record increased the legisla-
tors’ probability of supporting the fi scal reform bill (Models B, C and D
in Table 5.3).
A second fi nding is that a higher number of legislative reelections
reduced the likelihood of party dissidence (Models A, B and D). By
contrast, legislators who had been elected to Congress for the fi rst time
in 1998 were more likely to break party ranks and vote with the presi-
dent, as illustrated by Figure 5.3. The evidence suggests that legislators
who had no long-term attachments to party cadres were more likely to
risk their political fortunes outside the party. In general, institutional
rules favored political amateurism: between 1979 and 1996 more than
85% of the Ecuadorian Congress was composed of inexperienced legisla-
tors who could not pursue legislative careers due to a constitutional ban
on immediate reelection (Mejía Acosta 2003). And although reelection
rates doubled from 13% to 27% of the total number of legislators after
consecutive reelection was reinstated in 1998, most of Ecuadorian leg-
islators still had no previous legislative experience. The political careers
argument could also be applied to legislators with progressive ambitions:
those who had interest in pursuing political arenas beyond the legisla-
ture, such as provincial, city or bureaucratic positions, were less likely to
challenge the party leadership in the short run (Pachano 1991; Amorim
Neto and Santos 2001; Samuels 2003).
Party Dissidents and Political Ideology

The models confi rm that ideological differences are less relevant when
presidents engage in vote buying (Mainwaring 1999). According to a spa-
tial model of legislative bargaining, presidents would be expected to seek
support among legislators who lie closer to their own ideological position
(Enelow and Hinich 1984; Krehbiel 1998). However, neither Coppedge’s
five-point measure of party ideology (1998) nor the ideological distance
separating the legislator and the president’s ideal position points (Amo-
rim Neto 1998) can meaningfully explain government voting.
This fi nding advances theoretical predictions in an interesting way.
While the previous chapter showed that the (smaller) ideological distance
between the president and the legislative party is a meaningful predictor
of (greater) government cooperation, the relevance of political ideology
washes out when explaining individual decisions to vote with the govern-
ment. In this sense, (individual) vote buying responds to a non-ideolog-
ical, and more cost-efficient logic for advancing legislators’ immediate
ambitions. Other factors, such as the presence of regional voting, did not
report relevant explanations for government voting. 24
Party Dissidents and Government Majorities
It is often argued that the lack of party discipline has been one of the
sources of presidential weakness in Congress (Conaghan 1995; Burbano
de Lara and Rowland 1998; Sánchez-Parga 1998). The case of the adop-
tion of fi scal reforms clearly illustrates that presidents are able to maximize
the effectiveness of vote-buying techniques to advance their legislative
agenda. In the fi rst place, and consistent with theoretical expectations
outlined in Chapter 2, President Noboa sought to lower the required
voting threshold needed to pass legislation through his decision to veto
the congressional amendment. This way, he effectively raised the number
of congressional votes needed to override his veto (2/3 majority) and
lowered the number of votes needed to defend his ideal policy (34 votes
in a 100-member legislature). Secondly, the president made vote-buying
offers to the most “vulnerable” legislators, usually coming from smaller
parties, as suggested by Figure 5.4. These legislators were likely to vote
with the president either because they featured a weak party attachment
and/or cultivated a strong electoral connection. Thirdly, the president
chose coalition partners within parties that had a history of poor vot-
ing unity. The statistical analysis reports that parties who obtained low
party unity scores during that administration (average unity score) were
Figure 5.4 Probability of voting with the president by party size and party unity.
Fiscal reform (May 2001).
more likely to contribute with government votes (Models A through D
in Table 5.3).
In a manner consistent with the logic of making ghost coalitions,
defecting legislators from other parties lend support to government
reforms by disguising their vote as “absences” and “abstentions,” which,
according to internal legislative rules, were effectively added to support
the government’s proposal. In subsequent days, both presidents and leg-
islators repeatedly denied vote-buying accusations, praising instead the
“patriotic efforts” of those legislators who voted their own conscience
for the good of the country. 25
This chapter challenges the conventionally accepted view that party indis-
cipline and party switching are generalized features of the Ecuadorian
coalition-making process. I argue that party defections and dissidence are
well-calculated events, usually around particular issues of controversy, usu-
ally following unwritten procedures and targeting a consistent type of “vul-
nerable” legislators. Table 5.4 summarizes the findings of this chapter.
A common characteristic of pivotal players is their strong electoral
connection. Legislators, most likely local caudillos, who built a local cli-
entele in their provinces were most likely to challenge the party leadership
and even defect the party and run by themselves or under the umbrella
of another party. Those who had the electoral autonomy to defect made
a political career by making ad hoc deals with different political parties
and administrations.
Pivotal players were more likely to come from smaller districts. The
strong influence of local and provincial interests on the formation of
government coalitions was reinforced by the severe malapportionment
affecting the Ecuadorian legislature. The overrepresentation of smaller
provinces in the national legislature made the president’s agenda a hostage
of local interests. But presidents were also more likely to target the sup-
port of party switchers and party dissidents coming from small districts,
arguably because they could assemble “cheap” coalitions for reform with
this type of pivotal players.
In general, pivotal legislators had short or opportunistic political careers.
In the case of party dissidents, amateur legislators were more likely to
defect the party and temporarily vote with the government, whereas legis-
lators who had gained some degree of seniority with their party were more
likely to stay loyal. In the case of party switchers, the decision to defect was
linked to long-term career prospects. Party switching was an instrumen-
tal way to advance political ambitions, but legislators were more likely to
switch parties if they had the electoral security to do so, for example, by
having been elected several times in the same district.
Table 5.4 Motivations of Pivotal Players to Cooperate with the Government.
Party Dissidents Party Switchers
Electoral connection Strong rent-seeking incen- Strong rent-seeking incen-

tives. The smaller the tives. The smaller the
district, the more likely the district, the more likely the
vote with the president. party switching.
Political careers Near-sighted. The fewer Opportunistic. Reelections
number of reelections, the and party switching are
more likely to defect positively associated.
their party.
Political ideology Not relevant. Party Relevant. Legislators more
ideology or ideological likely to switch if they
distance between his come from center, right and
party and the president’s left parties.
were not significant to
explain dissidence.
Party size Size matters. The smaller Size matters. Party switch-
the party, the more likely ers are likely to come from
to vote with the president. smaller parties.
Political ideology has a mixed impact on pivotal players. In the case

of party dissidents, ideology did not matter since they were more inter-
ested in the short-term gains of the trade. In the case of party switchers,
however, party ideology was a strong predictor of legislative behavior.
Legislators from the populist center were more likely to switch because
they had smaller reallocation costs for switching—to the right or left of
the spectrum—whereas legislators situated at the extremes of the ideo-
logical were more reluctant to switch but also less tolerant of other party
switchers.
Finally, both switchers and dissidents had a tendency to come from
small parties, suggesting that their party leaders either had limited or
no access to government resources, and as a result, they also lacked the
leverage to reward (or punish) their members’ (lack of) unity.
While the government practice of buying individual votes from the
opposition reached its maximum effectiveness to secure the passing of
important economic reforms during the Durán Ballén administration
(1992–1996), this was also a time for significant reforms to curb the
presidential discretionary powers. The major vote-buying scandal involv-
ing Vice President Dahik in June 1995, and the subsequent congressional
impeachment and later resignation of Dahik, marked a significant turning
point in the way legislative coalitions were made in Ecuador. Subsequent
constitutional and ordinary reforms eliminated the use of discretionary
funds available to the Executive, but reforms also eliminated the legisla-
tors’ capacity to legally obtain resources for their provinces.
The extent to which the remedy was more pervasive than the illness is
discussed in the next chapter, as it shows that presidents and legislators
crafted alternative ways to enable the making of legislative coalitions for
reform before and after the 1998 reforms. To illustrate this contrast, the
chapter discusses the adoption of modernization laws during the Durán
Ballén Administration (1992–1995), and the adoption of dollarization
reforms during the Mahuad and Noboa Administrations (1998–2002).
6 Ghost Coalitions in the Making
of Economic Reforms 1
Everyone, except bumblebees themselves, knows that bumblebees are not fit
to fly. The difficult combination of a large body mass with relatively small
wings should represent a challenge for flying. Similarly, no one expects that
a highly fragmented congress with rent-seeking legislators would be capable
of producing significant economic reforms. But they did. Why did opposi-
tion legislators vote for highly unpopular economic reforms? What kind of
payments did they receive in return? And how were legislative agreements
enforced and or defections sanctioned?
This chapter develops a more detailed, qualitative account of ghost
coalitions as informal mechanisms created to facilitate legislative coop-
eration. Ecuadorian politicians confronted two types of barriers for mak-
ing reform coalitions. First, presidents lacked single-party majorities and
most legislators had short-term political ambitions due to the nature of the
electoral rules. Secondly, politicians confronted high reputational costs for
voting with the government, usually because government cooperation was
believed to be associated with illegal acts of corruption. As former presi-
dent Jamil Mahuad once remarked: “the worst insult you can tell an Ecua-
dorian politician is to be a gobiernista.”2 The poor cooperation prospects
were further eroded when governments were unpopular. In fact, the curse
of being a gobiernista usually became a self-fulfi lling prophecy: uncoop-
erative legislators contributed to policy deadlock, which led to government
ineffectiveness. Poor government performance, in turn, negatively affected
job approval rates, thus scaring away any possible legislative partners.
This chapter discusses the emergence of ghost coalitions as mechanisms
that helped secure legislative agreements. The reference to the informal insti-
tutions framework is a useful way to analyze who were the main actors mak-
ing the coalitions, what motivated them to form agreements, and how those
agreements were upheld or sanctioned (O’Donnell 1996; Helmke and Lev-
itsky 2004). The information about existing coalition incentives, their value
and their use is reconstructed from dozens of detailed field interviews with
legislative party leaders, former government officials, and four former presi-
dents. The information is verified and complemented with documents from
congressional hearings and extensive printed and electronic media archives.
The chapter also discusses the ways in which informal legislative agree-
ments were effectively sustained, and how defections were sanctioned.
Presidents frequently reshuffled cabinet positions and local government
appointments, or temporarily suspended government transfers to legisla-
tive partners to remind and reinforce legislative compliance. More intense
levels of political conflict, including, for example, congressional threats to
impeach government officials, also reflected policymakers’ efforts to rene-
gotiate congressional alliances under the table or sanction political defec-
tions. In the last part of the chapter, I offer two rich analytical narratives to
illustrate the roles of ghost coalitions for adopting modernization reforms
(1992–1995) and dollarization reforms (1998–2002).
CRAFTING COALITIONS FOR REFORM:

INFORMAL INSTITUTIONS
Students of Latin American politics are familiar with the idea that politi-
cians have often relied on clientelistic and patronage networks to cement
political support between voters and their candidates, and/or within the
political elite. This is especially true in polities governed by weak political
institutions. Patronage can be thought of as the discretionary use or distri-
bution of state resources to cement the loyalties of political allies (Main-
waring 1999: 176). Clientelism is understood as a personal, asymmetric
and informal relationship between two players, in which a patron controls
access to benefits and resources that the weaker partner desires and may
even be able to coerce partners into compliance (Mainwaring 1999). The
two defi ning elements of these exchanges are voluntarism and reciprocity.
Voluntarism refers to the possibility that one of the players—the client—
may opt out of the relationship and fi nd a more suitable patron, though this
cooperation may be “structurally induced” by the asymmetric nature of
powers. Reciprocity explains that political players expect a mutual benefit
from the exchange, thus the relationship ceases to exist when the expected
benefits do not materialize (Menéndez-Carrión 1986: 94). Obtaining state
resources for a specific region or the making of power-sharing agreements
between elites are often legitimate practices not proscribed by the constitu-
tion and not necessarily linked to corruption. Clientelistic exchanges were
not necessarily illegal but the prospects for corruption increased when
exchanges took place in poorly institutionalized poliarchies with eroding
legal authority and weak accountability links (O’Donnell 1996). Scholars
often refer to the inefficiencies produced by cementing legislative alliances
with clientelistic practices, claiming that they produced opportunistic and
expensive instances of cooperation over fi nite issues (Haggard and Kauf-
man 1995; Mainwaring 1999; Ames 2001). Students of Ecuadorian politics
have echoed similar concerns about the pervasive effects of using patronage
and clientele networks in the making of political agreements (Burbano de
Lara and Rowland 1998; Sánchez-Parga 1998).
Ghost Coalitions in the Making of Economic Reforms 113
In recent years, the use of an informal institutions framework has offered
a useful toolbox to analyze the incentives and sanctions associated to clien-
telistic exchanges. Rather than focusing on normative or missing elements
that defi ne these exchanges, the focus is on the observed rules of the effec-
tive policymaking game, beyond the prescriptions of formal democratic
institutions (O’Donnell 1996: 9).
Informal institutions emerge to address power asymmetries produced by
unequal distribution of resources in society (Knight 1992: 123). In order
to overcome distributional challenges to collective action, actors adopt
“socially shared rules, usually unwritten, that are created, communicated,
and enforced outside of officially sanctioned channels” (Helmke and Lev-
itsky 2004). Briefly, informal institutions are not conceived as regular pat-
terns of recurrent behavior, but such regularity responds to a widely known
and accepted rule; they do not prescribe illegal behavior, and violations of
the agreed rule must be followed by some type of sanction (Helmke and
Levitsky 2004).
The “effectiveness” of informal institutions to alter formal institutional
outcomes is determined by the extent to which the actor’s goals are compat-
ible with existing (formal) rules. In this sense, informal institutions could
offer actors complementary, substitutive, conflictive or accommodating
incentives to those offered by formal institutions alone (Helmke and Lev-
itsky 2004; Lauth 2000: 25). In the legislative arena, for example, infor-
mal institutions helped to complement and accommodate the institutional
constraints to make coalitions left by the previous military regime. Chil-
ean elites created informal power-sharing mechanisms to curb presiden-
tial power and “enhance coalitional trust and provide insurance policies
against potential exclusion” (Siavelis 2006).
THE EMERGENCE OF GHOST COALITIONS IN ECUADOR
In Ecuador, political actors have used informal institutions to overcome the

coalition-making constraints imposed by a multiparty presidential democ-
racy. More specifically, the use of vote-buying mechanisms such as patronage
distribution and clientele networks helped political actors approve substan-
tive economic reforms in a context where fragmented legislative support and
widespread popular discontent with economic adjustment would have pre-
dicted legislative deadlock. Figure 6.1 illustrates how informal institutions
help explain this apparent gap between the predictions for reform and the
observed empirical outcomes, given existing institutional constraints. Unlike
institutional scholars who treat these as inefficient or at best marginal prac-
tices, this chapter argues that the strategic use of informal mechanisms helped
raise collaboration payoffs or lower coalition-making costs by crafting clan-
destine or ghost coalitions with parties.
Ghost coalitions have been taking place in Ecuador since the transi-
tion to democracy, when presidents and legislators produced short-term
Figure 6.1 Informal institutions as deviations from existing model predictions.
commitments while preserving a reputation of “political chastity” (Mills

1984). More than just “a behavioral regularity,” the making of clandestine
agreements surrounded by political confl ict became a modus operandi of
the Ecuadorian political elite. The following pages show how these “clan-
destine” agreements came into place, what the nature of such agreements
was, who the potential beneficiaries were, and how they were sanctioned.
Crafting Reforms in an Unlikely Environment

As discussed in the introductory chapter, Ecuador offered a very difficult
environment for the adoption of economic reforms. A fi rst aggravating fac-
tor was the magnitude and timing of required reforms. The “Washington
consensus” type of reforms actively promoted by International Financial
Institutions (IFIs) required a drastic departure from a state-led import-
substitution industrialization model and the adoption of a reduced-gov-
ernment, open-market economic model (Nelson 1989; Williamson 1990;
Haggard and Kaufman 1995). Policy recommendations included, among
other things, the adoption of fi nancial and trade liberalization, fiscal disci-
pline, reduction of the public sector (including privatizations), and flexible
labor reforms (Hey and Klak 1999: 2; Williamson 1990: 402). The need for
economic adjustment and stabilization was a dramatic shock for a country
that had recently enjoyed the benefits of an oil-rich decade that expanded
the state and promoted social modernization and economic growth (Grin-
dle and Thoumi 1993; Hey and Klak 1999). The need for adjustment also
emerged shortly after the country abandoned military rule and adopted
democratic rule in 1979.
Institutionally, governments were ill-fitted to adopt drastic policy
changes in an environment plagued with multiple actors and diverging
interests. Although the 1979 Political Constitution granted presidents
strong policymaking powers in the legislature, including decree and veto
powers, presidents were crippled by the lack of single-party majorities in
Congress (Mainwaring and Shugart 1997; Morgenstern and Nacif 2002).
In addition to constitutional powers, presidents also enjoyed ample pre-
rogatives to control political appointments of cabinet members, provin-
cial governors, heads of diplomatic missions, and until 1996 they could
also influence the nomination of Supreme Court judges, but these were
ultimately appointed by Congress. Up to 1995, presidents had significant
discretionary powers to allocate off-line budget items, make transfers to
provinces, and use discretionary spending accounts (Araujo 1998).
Students of Brazilian politics had shown how a similar range of presi-
dential powers helped presidents become very influential actors in the poli-
cymaking process and overcome a fragmented legislative opposition (Raile
et al. 2006). In Ecuador, however, this impressive “presidential toolbox”
had a limited effect to motivate long-term agreements, partly because leg-
islators had short terms in office, and partly because government coop-
eration was generally distrusted by public opinion. The negative effect of
short-term horizons on legislative cooperation has already been explored
throughout this volume and elsewhere (Mejía Acosta et al. 2008). The next
section explores the negative impact of public opinion and the media on
coalition formation.
Presidential Popularity, Public Opinion and the Media

The adoption of economic reforms in Ecuador, as in other Latin Ameri-
can democracies, clashed against citizens’ hopes and expectations that
democratic governments would bring greater economic prosperity than
military dictators (Stokes 2001; Weyland 2002). When newly elected lead-
ers attempted reforms, they were often accused of betraying their electoral
mandates and selling out to international interests. Public anger grew expo-
nentially when the martyrs of the economic adjustment were involved in
large corruption scandals (Pérez-Liñán 2000).
In Ecuador, the combination of economic reform attempts with poor
economic performance and corruption scandals contributed to a decline
in presidential popularity rates. Figure 6.2 shows that presidents who gov-
erned between 1988 and 2001 lost in average all of their net favorable sup-
port (positive-negative scores) before completing six months in office. By
the time they completed the fi rst year of their mandates, the average popu-
larity of a president had lost nearly 60 percentage points. Unless presidents
benefited from some popularity-boosting exogenous shock (such as the
war against Peru during Durán Ballén’s third year in office) they remained
trapped in a permanent unpopular status until the end of their terms.
The sharp and consistent decline in job approval ratings hindered the
government’s ability to attract new coalition partners or maintain exist-
ing ones. Legislators perceived that they could pay a high political cost
Figure 6.2 Presidential net job approval ratings. Quito and Guayaquil (July 1988–
March 2001).
for being associated with an unpopular government, and they sought to

maintain an arms-length relationship with the president or even adopt a
loud anti-government attitude to disqualify government actions for politi-
cal gain. Given that Ecuadorian presidents were banned from seeking
reelection, the rhetoric of government opposition grew with the approach
of new elections.
The political class in Ecuador was socialized in a context where gov-
ernment collaboration had a negative—often pejorative—connotation.
Sixth-time congressman Wilfrido Lucero (ID) explained that when his
party attempted to negotiate a tax reform with President Mahuad in
1999, “we were disqualified, accused of being gobiernistas, by other
parties and our own. This is a political prejudice (complejo político),
some kind of bad word in the political arena when it comes to negotiat-
ing with the executive.”3 Throughout history, this anti-gobiernista dis-
course permeated the political slang with multiple and colorful tones to
chastise government transactions. A camisetazo was a shameless change
of political party with rent-seeking purposes; liborios were subservient
government allies; chuchumecos were last-minute government allies; teta
or troncha were compensations received for government collaboration;
and colaboracionistas were parties who accepted government appoint-
ments without belonging to the president’s party (Baus Herrera 1994:
229–31).
The connotation of this anti-government rhetoric was that political
exchanges usually involved corrupt and illegal behavior, but these accusa-
tions were rarely proven much less prosecuted. For example, the president of
Congress Asaad Bucaram (1979–1981), who was the first politician to coin
the term “troncha” (pork), accused President Roldós of distributing particu-
laristic benefits to cement coalitions with opposition parties. But Bucaram’s
genuine source of discontent was the fact that Jaime Roldós (his own son-
in-law), was seeking legislative support outside the family-controlled CFP
party of which Bucaram was president (Mills 1984).
The media played a crucial role in raising coalition-making costs by
demonizing incidents of government collaboration. Indoing so, they failed
to make a distinction between legal and illegal political exchanges. When
a dozen legislators were asked whether they thought the media had any
role in facilitating or obstructing coalition formation attempts, all of
them said that journalists tended to focus on scandals rather than positive
actions of Congress, thus eroding their incentives for making government
agreements.4
EXPLAINING INFORMAL INSTITUTIONS: WHO

MAKES THEM AND HOW DO THEY WORK?
Any newly inaugurated president knows that vote trading is “the name of
the game in town” when it comes to coalition-making in Ecuador.5 The
coalition-making challenge consisted of allocating effective incentives in
order to extract reliable legislative support for the reform agenda. Presi-
dents could, for example, try to reduce transaction costs by negotiating with
major party leaders instead of assembling piecemeal support from small
parties and independent legislators (Morgenstern and Nacif 2002). Presi-
dents preferred to buy “wholesale” legislative support by making “package
deals” with party leaders (Saiegh 2003). Party leaders played a crucial role
as coalition brokers: their success depended both on their ability to commit
and deliver secure legislative support to the president, and on their capacity
to obtain patronage and resources for their legislators’ districts and/or the
legislators themselves (Carey 2007; Samuels 2002). But making alliances
with an opposition party—instead of promoting individual defections—
increased the political liability of potential partners. Parties not only shared
public responsibility for policy decisions but they also became visible tar-
gets for other opposition parties who might profit from their policy failures
in the next election.
In order to promote coalitional trust around “wholesale” agreements,
presidents made—and sustained—concealed offers to potential allies will-
ing to lend congressional support.
The “secretive” nature of the agreements was a key premise for coalition
success: cooperation was secured as long as partners systematically denied
any form of cooperation. Often the media reported on these encounters, but
government officials and party leaders denied the existence of such pacts,
claiming in the best of cases that there was a “coincidence of interests” for
the good of the country. During the Hurtado administration (1981–1983),
Mills reports that Gary Esparza, the elected president of Congress in 1983,
consistently denied he was the candidate of the official alliance (1984: 71).
The leftist Izquierda Democrática Party (ID) enabled the election of Esparza
by voting for a dummy third candidate. According to the weekly magazine
Vistazo, this legislative strategy of lending “support without supporting” was
believed to be been part of a government negotiation (“La convergencia al
revés.” Vistazo, August 26, 1983). Different “government” alliances had been
formed in previous years with “different degrees of formality” between the
government and the Christian Democrats (DP), the Democrats (PD) and the
former Roldosistas (MIN), but no party dared call this relationship a “pact”
much less a government pact” (1984: 71). When reporters asked Esparza
about his role in advancing key government proposals during the previous
three years, he replied that his only interest was “the preservation of democ-
racy and not any government cooperation” (Mills 1984: 72). According to
Mills, several other legislators explained that Gary Esparza later obtained
control over Customs Administration, most likely as a reward from the Hur-
tado government for advancing important legislation in Congress (Diario El
Comercio, 10 August 1983, cited in Mills 1984: 72).
Disclosing political agreements often led to public confrontations, scan-
dals, and the demise of such alliances. When parties failed to deliver the
promised support, presidents threatened to reverse policy concessions,
delay loan or contract approvals, or simply dismiss (sack) their partisan
appointees from their government jobs. If, on the other hand, the presi-
dent failed to deliver an agreement, a disgruntled party could threaten to
mobilize social support against a set of reforms, launch impeachment pro-
cedures against a cabinet minister, initiate judicial procedures against key
government officials, or reverse legislative reforms. The following section
discusses in detail the scope and value of diverse coalition payoffs and the
following section illustrates how different informal mechanisms helped to
secure legislative agreements or punish legislative defections.
The Benefits of Legislative Cooperation

Much of the Ecuadorian presidents’ “considerable capacity to introduce
policy changes” (Grindle and Thoumi 1993) is explained by their wide
array of constitutionally endowed powers to bargain support from poten-
tial coalition partners. Table 6.1 provides substantive content to the “nature
of payoffs” dimension explained earlier. It lists available presidential pre-
rogatives (or the nature of available payments), provides a description of
potential beneficiaries, identifies the regional scope of the payment, and
provides examples where available.
Table 6.1 Discretionary Coalition Payoffs available to Ecuadorian Presidents.
Nature of payoff Subject Regional Scope Example

(direct or indirect (national, provin-
Beneficiaries) cial, individual)
Wholesale Agreements
Office
Power Sharing** Political parties National Judiciary, electoral,
gain control of and constitutional
political offices tribunals, Superin-
tendents
Cabinet and sub- Political parties, col- National Different cabinet
cabinet appoint- laborators and their ministries
ments constituencies gain
ministerial office
Provincial govern- Political parties National, regional, Oil (Petroecuador),
ments and State gain access to provincial Social Security,
Companies money, political Electricity, Devel-
influence and opment Banks,
policymaking Telecommunica-
authority tions)
Policy Concessions
Public policy, Party constituencies National, Lowering tariffs,
policy concessions or interest groups provincial. altering exchange
rate, bailouts
Retail Agreements
Policy Concessions
Licensing and con- Provides monetary Usually regional or Government con-
tracting benefits to provincial tracting in health,
individuals and education, energy.
interest groups
Pork and Rent-Seeking
International, Personal favors to Individual Up to 25% of
regional or local individuals: access Ambassadors,
appointments to money, political Police appoint-
influence and jobs ments
Budgetary alloca- Party constituencies Regional, PSC transfers to
tions /sectional or interest groups provincial local governments
governments (1993)
Rents (from discre- Personal benefits Individual “Man with a
tionary spending for legislators and suitcase” scandals
funds) maybe their dis- (1993)
tricts
Source: Political Constitution, Congressional Hearings and personal interviews.

** Their appointment process is not the exclusive prerogative of the president. These are
listed as highly valuable given that the president actively participates in their designation and
because they weigh heavily in the coalition-making process.
The payoffs are displayed according to the “market value” they have
for potential partners, which is significantly associated with the scope of
influence. Thus, the more potential beneficiaries, the higher the value of the
payoff, and inversely, more individualistic payments tend to have a limited
scope of action. Not surprisingly, these tend to correlate with the public
profile of each payoff, with the most influential compensations being also
the most visible kind of payments (i.e. most controversial) such as a cabinet
position. By contrast, the least influential or more personal payments such
as a business concession, are rarely subject to public scrutiny.
Power-Sharing Arrangements and the

Election of Control Authorities
Ecuadorian presidents had considerable leverage to form power-sharing
coalitions with different legislative partners. All congressional authori-
ties (president, vice president and legislative committees) were elected in
August of each year between 1979 and 1998, and every other year after-
wards. This election became the most influential event for the government
because it determined who would have agenda control over the policy-
making process, political impeachments, committee allocation, and the
nomination process of other key government authorities. In addition to
controlling the workings of Congress itself, at stake was the appointment
and control (for the following year or so) of: 1) The administration of
Justice through the joint presidential and party nomination of Supreme
Court judges (between 1979 and 1996) or the nomination of Constitu-
tional Tribunal members since 1997; 2) The election oversight through
the designation of the members of the directorate of the Supreme Electoral
Tribunal (TSE) and those of its provincial branches; 3) The control and
oversight of the government administration through the appointment of
such authorities as the Attorney General, the General Comptroller and the
Superintendents of the Banking and Telecommunications as well as vari-
ous directors of state-owned enterprises. The election of these positions
was at the same time the president’s (narrow) chance to form a pro-govern-
ment coalition and benefit from it. These positions endowed the president
and political parties with key bargaining treats—or threats—for future
bargaining, including decisions on the validity of a constitutional demand,
sentencing electoral sanctions for excessive campaign spending, or block-
ing a favorable committee report in the legislature. Chapter 3 showed
that Ecuadorian presidents—despite the adverse political environment—
assembled 15 pro-government majorities in 23 congressional elections for
president (65%). Government formation received a lot of press coverage
but coalition members systematically denied association. The 1994 con-
gressional election illustrates this point. After successfully assembling a
coalition around the two largest parties in Congress, PRE and PSC, the
leaders of both parties fi rmly stated their political antagonism and after
justifying their vote as a brief truce, they pledged to let “the war go on” in
every other respect (Burbano and Rowland 1998: 74).
Cabinet Ministries
A second level of bargaining took place around the president’s discretion-
ary authority to freely appoint government officials. Roughly speaking,
presidents had authority to appoint at least some 200 of them, including
15 to 20 cabinet ministers and sub-cabinet secretaries for all ministries.
Similar to their roles in parliamentary democracies, cabinet appointments
contributed significantly to cementing pro-government alliances (Amorim
Neto 1998b; Haggard and McCubbins 2001) while granting political par-
ties some policymaking influence and access to a rich source of pork and
patronage for their own constituencies. In Ecuador, for instance, a Health
minister would have the authority to appoint provincial directors, allocate
government contracts, and include friends, allies and family members in
the ministry payroll, among others. Ecuadorian cabinets, however, had
fewer partisan members than virtually any other Latin American democ-
racy, meaning that most cabinet members were not identified with any
specific political party or tendency (Amorim Neto 1998). According to
the logic of ghost coalitions, low cabinet partisanship is explained by
the greater—and public—liability that parties faced for being associated
with the government’s actions. A good example of a “ghost cabinet” was
Noboa’s allocation of the Health Ministry to Dr. Jamriska, an “inde-
pendent” associated with the National Independent Movement (MIN).
The appointment took place just in time to cement the MIN’s vote on
Fiscal Reforms in April 2001. While the promise of a ministry was an
attractive offer to opposition parties, they often preferred to disguise such
appointments as individual—not partisan—collaboration, or settle for
Figure 6.3 Patterns of cabinet turnover (1979–2002).

less visible sub-cabinet level positions (Mershon 1996).6 Formal attempts
at cabinet-sharing, such as the one proposed by President Borja (ID) to
the Christian Democrats (DP) in 1988, were disqualified by the DP’s own
leader Osvaldo Hurtado as a “historic mistake” and caused severe splits
between the more radical party members and the gobiernistas (Conaghan
1995; Hurtado 1990).
It has often been argued that cabinet members were often toppled by a
fierce legislative opposition through the use of impeachment procedures,
thus contributing to government instability and policy uncertainty (Bur-
bano de Lara and Rowland 1998; Arteta and Hurtado 2002). Using the
same dataset however, Figure 6.3 depicts an alternative view. The data
shows that cabinet volatility is indeed quite high, as less than 50% of cabi-
net ministers appointed between 1979 and 2002 completed their mandates.
However, a large share of cabinet terminations was due to “voluntary res-
ignations” (39.3%), not congressional censorship and ousting as commonly
believed. Only 8.4% of the total number of ministers was effectively ousted
by a congressional majority. This relative predominance of “voluntary”
over “forced” resignations suggests that cabinet reshuffl ing may have been
a quasi-parliamentary strategy of presidents to accommodate new coalition
partners. In support of this parliamentary concept of coalition formation,
it is interesting to note that presidents with smaller—or no—party contin-
gents such as Hurtado or Noboa had the highest resignation (renewal) rate,
whereas presidents like Borja with higher partisan support in Congress
had a higher rate (over 30%) of impeached and censored cabinet members.
More recently, the breakup of the indigenous alliance with the Gutiérrez
administration in 2003 and the formation of a new government alliance
with the Coastal parties PRE and PSC were followed by a significant cabi-
net reshuffling. Following this parliamentarian perspective, it could be
argued that frequent cabinet renewals were not simply an expression of
political conflict, but an escape valve that prevented larger political conflict
and government instability.
Patronage Distribution: Provincial Governors and State Companies

Less visible, but greatly influential—perhaps due to their more veiled
nature—were dozens of executive appointments to direct state-owned com-
panies and corporations in the oil sector (Petroecuador), electricity (Inecel),
telephony (Ietel/Emetel/Conatel), social security (IESS), and modernization
council (Conam), customs authority and national development banks (BNF
and BEDE). Governors were appointed by the president to represent the
executive in the provinces, and they influenced key public works appoint-
ments at the sub-provincial level. In the international arena, presidents had
autonomous authority to appoint up to 25% of diplomatic mission chiefs
(with the remaining percentage chosen according to internal Foreign Rela-
tions procedures), and discretionary authority to appoint other diplomatic
officials of lower ranking. When negotiating with the president, party lead-
ers were often interested in obtaining bulk entitlements (also known as
“contratos colectivos” or collective contracts) to sectors of the government
or “asked for (control of) entire provinces” in which they considered to have
their strongholds. Leaders, in turn, used these baskets of goodies to disci-
pline and reward their party members. Through these positions, party lead-
ers gained access to significant provincial level or area specific resources,
granted concessions and licenses to diverse interest groups, negotiated the
channeling of funding for a locality, appointed and removed lower govern-
ment bureaucrats, as well as used their diplomatic status to further trade,
tourism or cultural policies. A recent example illustrates this brokering role
of a party leader. In January 2004, the leader of the Roldosista PRE party,
Jacobo Bucaram Pulley, and son of former President Abdalá Bucaram, was
reported enforcing the party’s vote around a controversial government ini-
tiative to reform the public sector. In exchange, the PRE hoped to obtain
embassies in Panama and Russia, and the Urban Development Ministry;
channel government transfers to PRE governments in the Esmeraldas and
Los Rios provinces as well as the city of Machala; benefit from the reshuf-
fling of electoral tribunal members; and gain a seat in the Constitutional
Tribunal .7
Even though these government officials were appointed for a fi xed man-
date, their survival almost entirely depended on the president’s discretion-
ary power to ratify or reverse decisions, depending on whether they needed
to reward or punish congressional coalition partners. Data on duration of
the mandates of provincial governors between 1979 and 2002 indicates a
high turnover rate of roughly 1.18 years per person, with only 28% of cases
who left office for “natural” causes (completion of mandate or death). Not
counting governors who were “promoted” or transferred to another sector,
it can be inferred that over 53% of governors were directly dismissed by
the president or were asked to resign. Other positions, such as Provincial
Directors of Health, Education or Public Works, had significant control
over resource allocation and were often disputed by political parties, but
data for these is inexistent. Similar to the argument presented with cabinet
renewals, it is argued that presidents removed these government officials
from office to induce compliance from existing congressional partners, or
to accommodate new coalition members.
Pork and Policy Concessions

Policy concessions had varying degrees of public visibility and attracted
different types of potential beneficiaries: the more valuable the payoff, the
more visible it was; the more personal was the favor, the less visible the
public scrutiny. In the process of approving major economic reforms, inter-
est groups demanded from their party representatives the introduction of
selective policies to benefit or protect specific constituencies (cfr. Mershon
1996: 541). Examples of these concessions included lowering trade tariffs,
pardoning debts, granting guarantees for debt defaults, imposing spe-
cial prices on—or granting subsidies to—export products like shrimp or
bananas, and so on. A most controversial example of a policy concession
occurred during the Hurtado Administration, when the president agreed
to purchase and convert to sucres, the national currency, the private dollar
debt of influential business sectors, renegotiating it with very lenient condi-
tions according to some, in order to secure the political support of business
sectors (Araujo 1998; Grindle and Thoumi 1993). Budgetary allocations to
specific districts or provinces were also offered to benefit the constituencies
of political parties in exchange of legislative cooperation. Even though bud-
getary spending was heavily restricted with spending laws especially after
1994, Araujo shows that Congress increased the proposed government
spending by 45% on average. Spending grew in the most flexible spending
accounts: Transferences, (Local) Allocations, General Spending and Public
Works (Araujo 1998: 145). Other types of payments by policy concessions
included: issuing operating licenses, government contracts, speedy approval
of public works, fast-track approval and channeling of foreign development
loans, and judicial pardons or reduced sentences.
Particularistic Benefits
While most of the payments discussed so far were usually negotiated with
the leaders of political parties, presidents completed legislative majorities
by offering particularistic payments to small parties or “independent” leg-
islators. Legislators defected from their parties when the expected politi-
cal benefit from becoming a free agent exceeded the perceived (electoral
or legislative) cost of breaking away from their organization (Kato 1998;
Mainwaring 1999; Desposato 2006). As illustrated in Chapter 4, an aver-
age of only 10% of legislators abandoned their parties in a given year,
and most of them moved away from opposition parties and remained
independent. These pivotal agents came from marginal but usually over-
represented districts, they had a center/populist party affi liation and they
often lacked legislative experience. Besides pursuing purely rent-seeking
objectives, these agents were mostly interested in delivering public works,
budgetary allocations and personal favors for their constituents. In a 1996
survey of the Ecuadorian Congress done by Mateos and Alcántara, the
vast majority of legislators were in complete agreement with the impor-
tance of bringing resources to their regions as an evaluation of their politi-
cal success (Mateos and Alcántara 1998: 90). An example from the Noboa
Administration (2000–2002) illustrates the use of selective payments to
break party discipline. On May 4th, 2001 President Noboa blocked a
congressional amendment and passed a Fiscal Reform with the votes of
several legislators who went against their parties. In subsequent weeks
the media reported the nature of payoffs received by defecting legislators.
According to the media, Reynaldo Yanchapaxi (four-time DP legislator
from Cotopaxi) obtained better roads for his province, Raul Andrade
(PRE National legislator) obtained a fast-track IADB credit for his native
province Manabí, Fulton Serrano (PRE-El Oro) bargained the governor-
ship of his province for his son, and the direction of the Health Minis-
ter for another relative.8 Though some parties expelled their deputies, an
informal rule of “impunity by consent” was applied to block the applica-
tion of the Code of Ethics in Congress and prevent the recall from office
of the new pro-government legislators. Through this practice, presidents
not only protected but they also nurtured the formation of proto-parties,
often made of independent legislators, to ensure their continued support
for the government. Often, these pivotal actors exerted their blackmail-
ing power to obtain significant concessions from the president, but it was
also in their best interest to comply with their government commitments
or else they ran the risk of losing all material and political privileges, thus
becoming some kind of congressional pariahs.
Monitoring and Penalizing Ghost Coalitions

José Sánchez-Parga once observed that political scandal “offered a remark-
able laboratory to study the process of political construction in a society”
(1998: 119). In Ecuador, politicians’ frequent threats of triggering politi-
cal scandals were part of a signaling game aimed at securing or renewing
congressional alliances. In a context where most of the political alliances
were sustained through concealed agreements, the threat of “going public”
may have effectively prompted compliance. Evidence shows that in some
cases, the launching of impeachment threats against cabinet ministers, con-
stitutional demands on legislative resolutions, or judicial inquiries into gov-
ernment contracting could also be interpreted as political mechanisms to
enforce compliance and punish defections. In the specific case of executive-
legislative conflict, José Sánchez-Parga confi rms that its consequences were
taken to high stakes arenas such as the Supreme Court, the Electoral and
Constitutional Tribunals, and regional and municipal governments (1998:
84, 101, 106).
Figure 6.4 looks at legislative impeachments of cabinet ministers to
illustrate that the public visibility of impeachment threats was often more
important than the actual trials of cabinet ministers. On average, one min-
ister was actually censored and ousted for every 14.6 threats (and one in 20
during the Febres Cordero administration between 1984 and 1988).
Not surprisingly, the visible act of launching an impeachment threat
against a government minister—rather than carrying out the actual
impeachment proceeding—was a cheap and perhaps effective publicity
stunt for any legislator who wanted to signal a position of political inde-
pendence. When an impeachment accusation became a credible political
threat of the opposition, the government could a) yield and renegotiate a
Figure 6.4 Full of sound and fury? Threats vs. actual impeachment proceedings
(1979–1996).
previous legislative agreement, b) seek an alternative legislative partner,

or c) escalate the confl ict by threatening back. An example of the fi rst
case took place in January 1999, when the rightist Partido Social Cris-
tiano (PSC) threatened to impeach President Mahuad’s Finance Minister
if the government were to withdraw support for the PSC’s proposed fi scal
reform package that year. When the president effectively did not chal-
lenge the PSC’s proposed reform, Mahuad’s Finance minister resigned in
protest.9 An example of the second scenario occurred in October 2004,
when the PSC—former coalition partners during the Gutiérrez admin-
istration—decided to launch an impeachment process against the presi-
dent himself on the basis of alleged accusations of undeclared campaign
donations. In the light of failed government attempts to renew the PSC
coalition, President Gutiérrez decided to form an “anti-impeachment”
coalition and bargained a new cooperation agreement with the support of
the populist Roldosista (PRE) and Alvaro Noboa (PRIAN) parties. The
third scenario, escalating political confl ict, is explored in more detail in
the next section, which illustrates the construction and demise of ghost
coalitions in two instances of economic reform.
GHOST COALITIONS IN THE MAKING

OF REFORMS: TWO CASE STUDIES
This section illustrates the critical roles played by clandestine alliances to

pass two fundamental sets of reforms: the modernization laws approved
during the Durán-Ballén administration (1992–1996), and the process
that led to dollarization reforms during the Mahuad administration
(1998–2000) and its aftermath with Noboa (2000–2003). In both cases,
presidents led minority governments, sometimes even with no partisan
representation in Congress (Durán Ballén during 1995–6, and Noboa
during 2000–2002). In both cases, the PSC party emerges as an influen-
tial pivotal party for the approval of reforms, but becomes a strong veto
player when it is excluded from the reform agenda. In addition to provid-
ing a detailed analytical narrative of how reforms were approved, the two
cases illustrate the workings of ghost coalitions under two different insti-
tutional configurations: before and after the adoption of the 1998 consti-
tution. While Durán Ballén enjoyed wide access to presidential resources
in the formation of congressional alliances (such as discretionary funds,
provincial transfers, and no formal barriers to promote party defections),
President Noboa lacked the same access to coalition incentives or bargain-
ing chips, partly because some discretionary resources had been constitu-
tionally banned or reduced, and because there were new legal frameworks
designed to punish vote-buying and party-switching incidents.
The Modernization Reforms (1992–1996)

Upon inauguration, the conservative government of Sixto Durán Ballén
boldly set out his plan “to end the shameful structure of privilege of the
inefficient public sector that absorbs state resources, provides poor services
and stifles national development” (Revista Vistazo, cited in Hey and Klak
1999: 78). The key protagonist in the adoption of “modernization reforms”
was Vice President Alberto Dahik, a Princeton-trained economist and a
hard-line advocate of fiscal austerity and economic re-structuring (Hey and
Klak 1999). Durán Ballén inherited a moderately growing economy (3.6%
GDP) with an “average” fiscal deficit of 1.2% GDP. In addition to adopting
decisive reforms towards economic liberalization (Hey and Klak 1999), a
significant achievement of Durán Ballén’s government was to be the fi rst
one (since the return to democracy) to maintain policy continuity that was
even followed by subsequent administrations (Araujo 1998: 79).
Confronted with a small party contingent in Congress and a feeble
center-left coalition, the executive formed a clandestine alliance with the
Social Christian party, which had the largest plurality in Congress (27%
of seats plus 21% of the government alliance PUR-PCE). The clandestine
agreement reportedly took place in a Guayaquil residence with the pres-
ence of the president, Vice President Dahik, and Chief of Staff Marcelo
Santos for the government and the PSC leaders León Febres Cordero and
Jaime Nebot. This agreement and its contents were only disclosed three
years after, during Dahik’s congressional impeachment hearings (Dahik
1995). Despite sinking job approval rates, this ghost alliance helped Durán
Ballén bring fruitful results for the approval of modernization-related and
market-oriented reforms between 1992 and 1994, including a Public Sec-
tor Budgets Law, (de)regulation of intellectual property rights and for-
eign investment, Financial System Institutions Law, Capital Markets Law,
Agrarian Reform Law, Hydrocarbons Law, Tax Reform Law, and State
Modernization Law, among the most influential (Araujo 1998: 85–6; De
la Torre et al. 2001; Hey and Klak 1999). The nature of the “broad politi-
cal agreement” with the PSC—revealed years later by Dahik himself—
included: the allocation of budgetary lines for PSC-controlled electoral
strongholds in the coastal provinces of Guayas, Manabí, Los Rios and
Esmeraldas totaling over 200,000 million sucres (US$100 million); direct
cash transfers (from the government’s Discretionary Spending Fund) to
purchase individual legislators for up to US$500.00 each to approve the
privatization of Telecommunications or Electricity laws; government jobs
in state-owned oil (Petroecuador) and energy (INECEL) companies, and
most importantly a negotiation to re-gain for the PSC the control of the
Supreme Courts and the Electoral Tribunal (Dahik 1995; Vargas Pazzos
1995; Saltos Galarza 1999: 207). Government access to executive discre-
tionary funds and provincial transferences helped the government recruit
the support of independent legislators—the second largest contingent in
Congress—during the process of adopting modernization reforms.
Vice President Dahik strongly felt that the PSC was constantly review-
ing and escalating the coalition demands from the government beyond
the scope of the original agreement. After a series of failed attempts to
renegotiate the alliance, Dahik decided to shake the PSC ghost alliance by
“going public” with some accusations. During an interview with journal-
ist Jorge Vivanco in July 1995, Dahik revealed that Supreme Court judges
had frequently demanded bribes from the executive to determine the con-
stitutionality of certain Modernization laws that were being challenged
by the legislative opposition. Dahik’s comments were directed against his
coalition partners since the PSC played a predominant role in appointing
Supreme Court Judges back in 1992.10 Apparently, the government and
the PSC leadership held another meeting after the controversial interview
but failed to reconcile positions (Castelló 1995). An angry and frustrated
PSC leader (and mayor of Guayaquil) León Febres Cordero then launched
a legislative attack on the government that culminated in his party’s con-
gressional impeachment of VP Dahik on corruption charges, ironically for
buying the votes of legislators.11
In the aftermath of the impeachment proceedings, Alberto Dahik was
acquitted by a narrow vote in Congress, but he resigned and fled to exile
in Costa Rica shortly after a Supreme Court judge issued a warrant for his
arrest (Sánchez-Parga 1998: 121; Saltos 1999: 209). Several reforms were
passed to curb the discretionary spending funds of the executive as well as
the abilities of legislators to negotiate resource allocation for their prov-
inces. The PSC did not escape unharmed from the scandal; its presidential
candidate Jaime Nebot, lost the election the following year.
The Dollarization Reforms (1998–2002)

When President Jamil Mahuad dollarized the economy in January 2000,
the widespread consensus was that Ecuador had reached its economic col-
lapse. By the end of 1999, unemployment was soaring at 20%, GDP had
fallen by 7%, inflation rates had skyrocketed to nearly 90% (the highest in
Latin America), and the national currency el sucre depreciated by almost
200% in 1999. The origins of a multiple economic crisis can be traced back
to domestic and international effects. In the domestic arena, the short but
conflictive presidency of Mr. Bucaram followed by the interim government
of Mr. Alarcón contributed to policy inactivity to curb a growing fiscal
deficit and to enforce strong regulation in the wake of a moderate banking
crisis (De la Torre et al. 2001). In addition, Ecuador’s economy was severely
affected by three exogenous shocks: a) el Niño-related floodings (with an
estimated loss of 13% of 1998 GDP), b) a drop of international oil prices
(from $20.45 a barrel in 1996 to $6.95 in 1998), and c) the contagion
effect from the Russian crisis (drying up of international credit, plus soar-
ing interest rates) (De la Torre et al. 2001).
Local and international agents hailed the beginning of the Mahuad
administration with optimism because they saw in him an adjustment-
committed politician supported by a strong technical team. His Christian
Democratic Popular Democracy Party (DP) obtained less than 30% of
the seats in Congress, making the government pursue a “natural”—but
not public—alliance with the rightist Social Christian Party (PSC), which
had 23% of the seats. 12 In the words of Mahuad’s Chief of Staff Jaime
Durán, both parties shared the same vision to implement a broad agenda
of market-oriented economic reforms necessary to address the Ecuadorian
economic crisis.13 President Mahuad had confi rmed that he preferred to
negotiate with the Social Christian Party and its leaders León Febres Cord-
ero and Jaime Nebot, because they led a large, disciplined and ideologically
proximate party.14
Although its protagonists denied the existence of any programmatic
agreement, the “aplanadora” (or steamroller as the press called this alli-
ance) went on to give congressional support to consent on a peace treaty
with Peru, the approval of a fiscal reform package (which included the cre-
ation of new government taxes like a 1% tax on all fi nancial transactions
(Impuesto a la Circulacion de Capitales, or ICC)) to fi nance the fiscal defi-
cit, a proposal to reform the directory of the Deposit Guarantee Agency
(AGD) in charge of bailing out insolvent banks, and the 1999 fiscal bud-
get. The efficiency of the ICC created great controversy among economists
and political opposition from within, among other things, because some
ICC revenues went to fi nance public works in PSC-ruled city of Guaya-
quil. It is interesting to note here that only three days before the fi nal vote
in Congress, President Mahuad denied any alliance with the PSC. When
interviewed by the Quito newspaper El Comercio, he insisted on simply
favoring “agreements that promote modernization.”15 In exchange, the DP-
PSC alliance jointly appointed the Banking Superintendent, Attorney Gen-
eral, People’s Attorney, and the directory of the Electoral Tribunal with
PSC in the presidency and DP in the vice presidency.
The drastic drop in oil prices together with IMF recommendations cre-
ated additional pressures on the government to balance a growing fi scal
deficit and create new taxes in 1999. The fate of the aplanadora was threat-
ened by the PSC’s reluctance to approve new taxes. Between January and
March 1999, the Mahuad administration and PSC leaders made several—
failed—attempts at renegotiating the alliance, including the replacement
of the Finance Minister Jaramillo, who opposed the PSC’s 1% tax, but
the magnitude of the economic crisis required drastic reforms that the
PSC was not willing to approve. Political disagreement turned into open
war when Mahuad imposed a bank holiday on March 10th, 1999 to pre-
vent a massive devaluation of the sucre. Five days later, Mahuad declared
a year-long deposit freeze in an effort to prevent further bank collapses
(De la Torre et al. 2001: 26). With the support of PSC leaders, Mr. Aspi-
azu, the owner of Banco del Progreso (the largest deposit holder in the
country), turned his bank’s imminent bankruptcy into a regional confl ict
and called for an open mobilization to “resist the attacks of the central
governments on the banks of Guayaquil” (De la Torre et al. 2001).16 In
the aftermath of the banking crisis and with a slim 16% approval rate,
Mahuad turned to making concealed alliances with the left and populist
parties. In July 1999, he passed Financial Institutions and AGD reforms
with the Left (Democratic Left and Pachakutik) in exchange for lower gas
prices. When newspapers reported the agreement, the leader of ID, Paco
Moncayo, denied having met with the president, much less making any
negotiation, but the party supported the president’s fiscal reforms a few
days later.17 He also obtained fiscal reforms with the 22 votes of the PRE
in October, and a month later the approval of the 2000 budget, alleg-
edly in exchange for “transfers to municipal and provincial governments”
in the Coastal region. According to the press, DP leader Ramiro Rivera
reached an agreement with PRE leaders Sicouret and Marún on October
21st. Sicouret denied such meeting by saying that the only way to balance
the deficit “is not by increasing revenues but reducing debt payments . . .
and the President already took a step in that direction by defaulting on
Brady bonds.”18
The January crisis that led to Mahuad’s ousting on January 21st 2000,
came just ten days after the president announced the need to dollarize the
economy. Mahuad had adopted dollarization as a way to prevent a hyper-
inflationary spiral. The coup came from outside the congressional arena, as
a group of disgruntled army officers led by Lucio Gutiérrez channeled the
mobilization of indigenous groups to demand Mahuad’s resignation. As one
analyst rightly put it, “maybe people liked the (dollarization) song, but they
were tired of the singer.”19 On the next day, Vice President Noboa assumed
office to: a) confront the economic crisis, b) calm the indigenous uprising,
and c) carry out the proposed dollarization reforms. All of these were to be
done with the same congressional fragmentation and without a legislative
party he could call his own.
Gustavo Noboa, a conservative university professor from the coastal
elite, intentionally developed an image of “presidential leadership above
politics” by defending “his right to gather the necessary votes from Con-
gress in order to govern the country.”20 He profited from high opinion
ratings (+45% net approval rates, up from -80% when Mahuad left
office) to commit the support of party and business leaders to save Ecua-
dor from economic and political uncertainties. DP’s collaboration was
secured through the election of Vice President Pinto and giving the party
leadership to the pro-PSC Guayas legislator Alejandro Aguayo. The PSC
appeared as a natural legislative partner since some business constituen-
cies demanded dollarization early on in the Mahuad administration. With
the support of DP, PSC, FRA, and PCE, he consolidated a “super steam
roller” (la super aplanadora, as newspapers called it) to pass a Monetary
Stability and Economic Recovery Law (Trole I). A few weeks later, the
IMF approved a fresh loan for US$300 million. In return, the government
committed itself to raise salaries (in 20%), the prices of fuel (in 60%) and
domestic gas (in 40%) in July and October, and transportation costs were
allowed to increase a full 80%.
In muddling through legislative agreements, the Noboa administra-
tion adopted pragmatic strategies to carefully negotiate piecemeal reforms
(before submitting a bill to Congress), to distribute patronage to poten-
tial allies, to reward and strengthen “independent” pro-government par-
ties and individuals (such as the MIN), and to coerce compliance from
insecure partners (such as threatening to dismiss government-appointed DP
officials). The media reported on how legislative votes were bargained with
the presence of government officials in Congress. Bargaining chips included
provincial governorships, the provincial direction of a ministry, diplomatic
postings, public works and loan approvals. 21
Despite the adverse conditions for success, such political strategies paid
off when the government passed the Trole II in August 2000, Fiscal Budget
in November, Tax and Customs Reforms in May 2001 (though it was later
ruled unconstitutional by the Constitutional Tribunal), Fiscal Responsibil-
ity and Government Spending Law in March 2002, and met the economic
goals required for signing an IMF agreement at the end of 2002, which
Noboa left for incoming President Gutierrez to sign as a “good luck” ges-
ture. It is interesting to note that President Noboa’s net job approval rates
remained on the “favorable” side during his interim government, reaching
higher levels (of up to 50% in October 2000) while Congress debated inter-
nal conflicts.
This chapter relies on the notion of informal institutions to illustrate how

legislators and presidents systematically formed ghost coalitions to trade
political concessions for economic reforms in a contentious policymaking
environment. It shows how these political transactions defi ned the nature
of legislative agreements in Ecuador, how they formed part of the unwrit-
ten—and sometimes written—expectations of politicians, and how they
determined the rewards and sanctions for compliance and defection.
The chapter uses extensive elite interviews and archival research to elab-
orate a detailed classification of available incentives that were used by presi-
dents to cement the cooperation of parties and individual legislators. The
ample range of payoffs allowed presidents to form power-sharing agree-
ments with like-minded parties, to distribute pork and patronage to party
leaders or to purchase individual loyalties from defecting legislators. Often,
politicians had to conceal or deny these agreements in public to avoid the
bad reputation of being identified as a government ally (gobiernista). In
sum, the making of ghost coalitions opened windows of opportunity for
adopting policy changes that would have not been possible through the
workings of formal political institutions alone.
The chapter introduces and develops the notion that political elites used
conflict as an instrument to monitor compliance of and punish defections
from clandestine agreements. It argues that the constant production of polit-
ical conflicts between the government and the opposition (which included
cabinet impeachments, judicial enquiries, and constitutional demands to
name a few), were partly driven by the need to signal political independence
from one another, but were also used to renegotiate existing government
agreements. When all negotiations failed, coalition partners “went public”
with mutual accusations of vote-buying, which terminated the alliances.
Finally, this chapter closes with two analytical narratives of how mod-
ernization and dollarization reforms were adopted in the nineties and
early 2000. In addition to providing a detailed account about the nature
of transactions and the reforms that were approved, the two cases show
how informal coalition-making changed—or not—when the formal rules
of the game changed with the adoption of the 1998 Political Constitu-
tion. In terms of his bargaining leverage vis-à-vis the legislature, Presi-
dent Mahuad had a more limited range of available coalition incentives
than those enjoyed by previous presidents. Recall that important reforms
adopted in 1995 and 1998 had reduced the president’s discretionary con-
trol over off-budgetary items and discretionary spending, it eliminated the
legislators’ ability to negotiate provincial allocations in the national bud-
get, and the 1998 Congress adopted an “Ethics Code,” which punished
legislators’ vote-buying incidents with their immediate removal from office.
Although these reforms were adopted by legislators in an attempt to show
their “anti-corruption” efforts, in reality legislators eliminated “functional
currencies” that facilitated the day-to-day legislative bargaining. Without
these bargaining chips, party leaders were “tied of hands and feet” in their
ability to entice legislative cooperation. 22
Despite this important reduction of the president’s coalition-making
ability, Mahuad’s successor, Gustavo Noboa, was nevertheless able to pass
substantive reforms. This relative success illustrates that a change in formal
rules may have increased the bargaining costs with the legislature, but the
logic of informal institutions prevailed and political actors adjusted their
strategies accordingly with the new institutional framework. In the case
of the Ethics Code, for example, government legislators used an informal
practice of “impunity by consent” to block or stall legislative decisions to
sack party switchers if these had abandoned opposition parties to join the
government camp.
The following and concluding chapter develops two questions that
directly emerge from this chapter. The fi rst one is the relationship between
ghost coalitions and political accountability. In order to enhance the value
of coalition incentives and ensure cooperation, ghost coalitions relied on
a parallel system of checks and balances through which mechanisms of
constitutional control or legislative oversight became instruments of politi-
cal blackmail. Ghost coalitions may have increased politicians’ ability to
produce policy changes, but in the long run these clandestine agreements
undermined the prospects for democratic governance in Ecuador. A closely
related question refers to the relationship between informal institutions and
formal institutional change. As discussed, the adoption of significant con-
stitutional reforms between 1995 and 1998 restricted the policymakers’
ability to trade votes for favors. Although there is evidence to suggest that
ghost coalitions prevailed despite higher transaction costs, the post-reform
period also coincides with a dramatic increase of political confl ict where
the legislative opposition contributed to the ousting of three presidents and
one vice president. While the study of political—presidential—instability is
beyond the scope of this volume, it is possible to suggest that in the absence
of coalition currencies, ghost coalitions may have turned into parallel
instruments of control and political blackmail that led to three consecutive
presidential crises. The next section further develops these questions.
7 Ghost Coalitions, Institutional
Change and Democratic
Accountability
The book introduced the notion of ghost coalitions to explain policymak-

ing in a highly fragmented presidential democracy. When democratic gov-
ernments lack a party majority in the legislature, it is common practice
that the president or prime minister would craft power-sharing agreements
with the opposition in order to advance their policy agenda. These agree-
ments are normally secured by offering cabinet positions, policy conces-
sions, or particularistic incentives to opposition parties. But the coalition
currencies that helped ensure coalitional trust in other fragmented settings
(Alston et al. 2008) were simply not available or were publicly regarded
as corrupt transactions in Ecuador. This absence of power-sharing incen-
tives confronted policymakers with a cooperation dilemma. Presidents and
legislators could mutually benefit from making political transactions, but
they faced high reputational costs, which undermined their willingness to
cooperate with one another. Unless, of course, they could find an alterna-
tive and effective way to trade votes and favors.
The analysis of ghost coalitions offers a useful way to understand how
minority presidents and opposition legislators in Ecuador were able to
exchange valuable coalition incentives and adopt important market-ori-
ented reforms, despite the absence of formal power-sharing arrangements.
The success of these informal agreements was based on two conditions.
First, legislative transactions were centered on party leaders or coalition
brokers who delivered reliable legislative support for government initia-
tives in exchange for coalition rewards for the party’s rank and fi le. Sec-
ondly, legislative agreements were isolated from public scrutiny to avoid
the reputational costs of supporting economic reforms. In a broader sense,
the analysis of informal polycymaking patterns offers a unique window
to understand the modus operandi of the Ecuadorian political elite, their
goals and incentives, and the logic behind their conflicts.
This concluding chapter summarizes and highlights the contributions
of the ghost coalition framework for the study of policymaking in frag-
mented democracies. The fi rst section revises the book’s most relevant
fi ndings from a comparative perspective. Specifically, it explores whether
the working premises of ghost coalitions can be analyzed beyond the
Ghost Coalitions and Democratic Accountability 135
Ecuadorian case. The second section discusses the resilience of infor-
mal coalitions over time in the light of significant institutional changes.
The third and fi nal section discusses the links between ghost coalitions,
accountability and democratic governance.
THE GRAY DIMENSIONS OF COALITION FORMATION
Understanding coalition-making in Latin America has gained greater

policy relevance in recent years, as minority presidential governments
have become the rule, not the exception. In only three of the 12 general
elections held between 2005 and 2006, the government party won the
majority of congressional seats (Zovatto 2008). Coalition-making pat-
terns in Latin America feature significant variations when it comes to the
nature of coalition incentives, the composition of coalition partners and
the duration of agreements. A relevant dimension is the extent to which
government majorities are secured around programmatic agreements
made with political parties, or whether they are cemented through clien-
telistic transactions made with individual party defectors. In Chile, for
example, an informally institutionalized power-sharing agreement (Con-
certación) enabled parties on the Left to develop coalitional trust despite
institutional rigidities and authoritarian legacies (Siavelis 2006). Since the
transition to democracy, Concertación has governed Chile with two con-
secutive Christian Democrat and two Socialist governments. In Mexico,
the 2000 general election produced a historic defeat for the hegemonic
PRI party, but left the incoming government party in a minority situa-
tion, with president Vicente Fox commanding only a third of the seats
in Congress (Nacif 2003). Government attempts to form coalitions with
one of the two opposition parties failed in part due to significant policy
differences and partly because the opposition was keen to avoid the politi-
cal liability of cooperating with a conservative government. Towards the
less institutionalized end of the spectrum, minority presidents in Peru or
Panama attempted to secure legislative majorities by offering particular-
istic rewards like rents and patronage to individual party defectors. And
although these currencies helped secure political support around specific
issues, they did not contribute to the formation of broader policy agree-
ments and in many cases led to vote-buying and frequent corruption scan-
dals (Guevara Mann 2001; Tanaka 2006).
The case of Brazil illustrates the coalition dilemmas and the tradeoffs
between making more programmatic coalitions with political parties and
cutting individual deals with individual defectors. Conventionally, scholars
questioned the possibility of making reliable or durable coalitions in Brazil
due to the highly fragmented and rent-seeking nature of legislative par-
ties (Mainwaring 1999). In such context, legislative transactions with indi-
vidual legislators were highly inefficient and unpredictable (Ames 2001). A
more recent interpretation suggests that Brazilian presidents were critical
to ensure party discipline through the distribution of cabinet portfolios to
parties, but also policy concessions, pork and patronage to individual leg-
islators (Amorim Neto and Santos 2001; Amorim Neto 2002; Raile et al.
2006; Figueiredo and Limongi 2000).
The case study of Ecuador offers a systematic way to study patterns of
coalition formation beyond the party-programmatic and individual-clien-
telistic continuum. Following parliamentary approaches, most of the exist-
ing literature has set out to explain coalition patterns from the perspective
of cabinet formation (Amorim Neto 2002). With very few exceptions
(Morgenstern 2006), deviations from formal power-sharing agreements
(cabinets) or bargaining with agents other than political parties (factions,
movements or individuals) have been modeled as suboptimal or inefficient
strategies. The ghost coalitions framework helps expand the study of coali-
tion formation in two directions. First, it brings back the decisive role of
party leaders to secure coalitional trust in a contentious environment.
Contrary to expectations for a highly fragmented legislature, party lead-
ers offered legislators access to particularistic incentives that they wouldn’t
have been able to access individually. From the perspective of legislators,
they preferred to stay loyal to the party despite the few or weak sanctions to
punish defections, as long as party leaders helped them advance their politi-
cal ambitions. From the government perspective, presidents also preferred
to bargain with party leaders in order to reduce the costs of negotiating
with multiple legislative actors with diverging preferences.
A second dimension introduced by the ghost coalitions’ framework refers
to the political liability of making legislative agreements with the govern-
ment. As discussed earlier, this issue is non-existent in parliamentary set-
tings where power-sharing agreements between the government and the
opposition also come with shared responsibility for policymaking deci-
sions. In a minority presidential system, opposition parties in the legislature
face a cooperation dilemma: they could gain access to valuable government
rewards but be liable for the impact of government policies in the next elec-
tion, or they could maintain a position of political independence and miss
out on coalition benefits until they come to power. Ghost coalitions allowed
legislative partners to do both: access to coalition benefits while maintain-
ing a position of political independence. Coalitions in Ecuador often took
the form of clandestine—sometimes written—agreements to exchange votes
for favors, and these voting agreements were denied by coalition partners
due to the absence of public roll calls in Congress. When cabinet positions
were given to coalition partners, these were acknowledged as individual,
not party decisions. When opposition parties supported government leg-
islation, these were done through vote abstentions (“silent majorities”) or
publicly dismissed as a “pure coincidence” of interests. Beyond the case
of Ecuador, there have been journalistic reports of legislative vote-buying
cases and clandestine agreements in Argentina, Brazil, Colombia and Peru
but with few exceptions these cases have not been systematically modeled
(Desposato 2006).
The range of available coalition strategies according to the proposed
framework is mapped in Figure 7.1. The horizontal dimension represents
the nature of coalition membership along the programmatic-clientelistic
continuum. The top (right) end of the scale depicts strategies that privilege
policy-oriented agreements with political parties, whereas the lower (left)
end of the scale illustrates clientelistic agreements made with individual
party defectors. The vertical dimension maps the political liability of voting
with the government, which is inversely associated with the government’s
net job approval ratings. At higher (positive) values, popular government
encourages legislative cooperation and coalitions are more likely to become
public agreements; at lower (negative) values, legislators face higher rep-
utational costs from voting with unpopular governments and legislative
cooperation—when it happens—is likely to take the form of clandestine
agreements.
Existing accounts of coalition-making strategies tend to focus on the
public existence—or absence—of power sharing agreements between presi-
dents and opposition parties (Box A). The proposed framework suggests
that party leaders were even willing to make policy-oriented agreements
with unpopular governments as long as these were not publicly acknowl-
edged (Box B). Individual legislators also played an important and comple-
mentary role to secure government majorities. Depending on their electoral
incentives and career ambitions, legislative mavericks would choose to qui-
etly lend government support on specific issues without losing their party
affiliation (Box C), or openly challenge the party line and defect towards
the government coalition (Box D).
Figure 7.1 The gray areas of coalition-making.

These alternative coalition scenarios and optimal coalition strategies
were discussed in detail by different book chapters. Chapter 2 proposed a
strategic choice model to look at available coalition strategies from the per-
spective of an ideal president, a party leader and a pivotal legislator. Using
game theoretical insights, the chapter explains the emergence of party lead-
ers as coalition brokers that bridge the president’s need for reliable legisla-
tive support and individual legislators’ demand for particularistic benefits.
The success of legislative brokers depended on their ability to deliver reli-
able voting majorities for the executive and reward party loyalty by distrib-
uting collective (policy concessions, cabinet portfolios) and selective (rents
and patronage) coalition benefits to the rank and file. The incidence of indi-
vidual party defections is depicted as a marginal coalition-making strategy,
usually reserved for legislators with strong electoral connections who seek
to advance their political ambitions.
Chapters 3 and 4 use extensive quantitative evidence to confi rm the
predominance of party-based coalitions even in the fragmented Ecuador-
ian scenario. Chapter 3 offers a logistic analysis to explain the legislative
determinants of presidential (policy) success between 1979 and 2003. The
chapter confi rms that presidents effectively used their strong policymak-
ing (constitutional) powers such as decree and veto to advance legislation
(with a 75% success rate). Surprisingly, the chapter shows that decrees were
used in third (35%) of the total number of bills submitted to Congress,
thus challenging the conventional notion that weak presidents bombarded
Congress with decree legislation to compensate for the lack of political
support. Instead, empirical fi ndings suggest that legislative coalitions were
formed according to theoretical expectations. Policy change (presidential
success), for example, was more likely to happen when there was a smaller
ideological gap between the president and the median legislator’s prefer-
ences. Other significant predictors of policy change were the size of the
presidential coalition - not the size of the president’s party alone - and the
total number of party defections.
Chapter 4 uses roll call data to test conventional assumptions about
Ecuador’s unruly legislature. The data reports high party unity scores (in
the range of 90%) on economic reform, congressional appointments and
impeachment votes, even after eliminating non-controversial issues and
controlling for measurement bias. Patterns of party unity are similar to
voting patterns found in Brazil’s highly fragmented legislature: well-defi ned
ideological parties (on the left or the right) show higher voting unity whereas
unity decreases among catch-all centrist or populist parties. The incidence
of high voting unity scores is an unexpected fi nding because party lead-
ers had no institutional leverage to influence legislative behavior: between
1979 and 1996 legislators were banned from pursuing legislative reelec-
tion, and leaders had limited influence over candidate selection after the
adoption of personalized voting in 1997. The chapter suggests that party
leaders used formal and informal rewards to enforce unitary voting: their
strength came from their ability to bargain collective party demands with
the president in exchange for legislative support. The data supports the
notion that presidents did privilege the formation of policy coalitions with
more disciplined parties as long as their brokers effectively delivered reli-
able party support. For instance, empirical fi ndings show that presidents
privileged agreements with parties that were closer to their ideal policy
points, and parties that showed high unity scores in the past. Finally, and
according to existing model predictions, party unity eroded with the pass-
ing of the legislative term.
Chapter 5 explores the voting dilemma of an ideal “pivotal” legislator,
whose vote is necessary to make or break a coalition. Assuming different
policy preferences, the pivot’s dilemma consists of voting with the recom-
mended party line or independently voting with the president. Consistent
with unity scores reported in the previous chapter, the analysis shows that
on average, one out of ten legislators in Ecuador decided to switch out
of their parties in a given year. The chapter makes an important distinc-
tion between those pivots who challenge the party leadership in public,
through outright party defections and possibly party switching, and those
who silently dissent from party lines on specific votes but remain part of
the party organization. In both cases, the decision to defect is explained
by a strong electoral connection: these maverick legislators tend to come
from small districts with well-identified constituencies, and are willing
to sell their vote in exchange for particularistic benefits. The crucial dif-
ference between a switcher and a dissident however, was the liability (or
potential cost) of becoming a free agent in a highly fragmented and com-
petitive legislature. For example, legislators who lacked electoral security
such as new congress people were more likely to advance their career
prospects by pledging loyalty to their parties. Dissidents occasionally lent
support to the president’s agenda through “silent” agreements, such as
abstaining to vote against a government proposal but effectively adding
their vote to the proposed bill. Conversely, legislators who had reelected
in the past would have gained sufficient electoral security to challenge
party leadership and were more likely to pursue their career goals outside
the party apparatus. Similarly, legislators coming from center or vaguely
defi ned parties were more likely to switch parties. Party defections were
not isolated events but were likely to occur in groups, and in most of
cases, these were defections away from opposition parties, potentially
to join government ranks. Interestingly, the new independent legislators
were likely to regroup as a faction within the legislature, nominate a fac-
tion leader and collectively engage in government bargaining agreements.
This unexpected fi nding strengthens the case of the importance of legisla-
tive brokers in the coalition-making process.
Chapter 6 relies on extensive elite interviews to discuss in detail the
informal mechanisms through which ghost coalitions were assembled,
monitored and enforced. The chapter explains that legislators in Ecuador
faced a high reputational cost for being associated with the government.
To overcome this public opinion constraint, legislators were likely to make
clandestine legislative agreements that would maintain the flow of coopera-
tion payoffs while reducing the electoral liability of supporting government
policies. The president’s (average net) job approval ratings are used as a
proxy to determine the legislators’ willingness to make public or clandes-
tine alliances: that ghost coalitions were more likely to enable legislative
cooperation with unpopular presidents, that is, when presidents’ nega-
tive ratings exceeded the positive ones. Polling data shows that on aver-
age, Ecuadorian presidents between 1988 and 2001 enjoyed less than six
months of “honeymoon” ratings since inauguration, which meant that they
were likely to endure negative net job approval ratings for the remaining
three and a half years in office. The chapter also discusses several monitor-
ing and sanctioning devices used by presidents and legislators to punish
defections or renew legislative agreements. The threat of “going public”
with legislative agreements was an initial attempt used by presidents or
legislators to induce political compliance; the sanctions for defection were
applied through a perverse system of “checks and balances”. Given that
coalition partners presided over control and oversight government bod-
ies, these “sanctions” could translate into politically motivated corruption
scandals, judicial inquiries and impeachments proceedings.
The last section of this chapter, returns to the question of how ghost
coalitions undermined democratic accountability. The next section dis-
cusses the evolution of ghost coalitions in the presence of formal institu-
tional change, after the adoption of a new constitution in 1998.
GHOST COALITIONS AND INSTITUTIONAL CHANGE
If we accept that ghost coalitions are informal mechanisms to overcome insti-

tutional rigidities and ensure coalitional trust, what happens when new formal
rules of the game strengthen the executive’s policymaking ability over con-
gress? Scholars elsewhere have acknowledged the tenacious survival ability of
informal institutions in the light of formal institutional change (Knight 1992;
North 1990). Recall that ghost coalitions originally emerged in Ecuador to
compensate the imbalances of power between a strong executive without
party support and a highly fragmented and locally-oriented legislature. Leg-
islative cooperation was made possible thanks to the clandestine distribution
of coalition incentives among opposition partners. Many of these “curren-
cies” relied on legitimate presidential prerogatives, such as the appointment
of cabinet positions and other government offices, making policy conces-
sions, or allowing legislators to bargain for provincial resources.
Several corruption scandals that erupted after the mid-nineties, includ-
ing the vote-buying scandal during the Durán Ballén Administration (1992–
1996), and the political crisis that led to the legislative ousting of President
Abdalá Bucaram in 1997, contributed to the notion that the Ecuadorian
democracy was ungovernable and corrupt. A constituent assembly was
elected in 1997 and assembly members produced constitutional reforms
intended to strengthen the president’s policymaking ability, make legisla-
tors more representative, and curb corruption incentives. Legal provisions
were introduced to increase the executive’s ability to legislate through decree
and veto powers; legislators became directly accountable to voters through
the adoption of a personalized vote (1997), and the abolition of term limits
(1995); and provisions were made to reduce corruption incentives, including
the elimination of the executive’s discretionary and off-budgetary spending
(1995 and 1998), banning legislators from bargaining budgetary allocations
for their provinces (1995), and adopting an Ethics Code that threatened to
sack legislators from office if they were involved in vote-buying incidents.
In retrospect, constitutional changes did not only fail to address the
original problem (the lack of single-party majorities), but they dramatically
undermined the incentives and currencies available to form and sustain
legislative coalitions. If ghost coalitions had been a functional although
inefficient mechanism to facilitate policy change, constitutional reforms
raised transaction costs and further reduced policymakers’ willingness and
ability to cooperate over time. Ironically, the new institutional constraints
to coalition-making prompted the creation of additional layers of infor-
mality intended to secure coalitional trust. For example, the government
continued to encourage party switching from opposition parties, but an
informal “impunity by consent” rule was adopted in Congress to stall the
application of the Ethics Code and protect defecting legislators. In 2000,
the government negotiated and approved important dollarization reforms
with the support of a new legislative faction (MIN) entirely made of party
switchers. Overall, average party switching rates also remained virtually
unchanged around 10%, before and after the adoption of the Ethics Code.
In the long run, however, the shortage of coalition currencies did reduce
cooperation incentives between presidents and legislators, undermined
coalition survival, and intensified political conflicts. After 1998, stronger
executives did not achieve higher legislative success, and constitutionally-
shielded cabinet ministers lasted fewer years in office (Mejía Acosta et al.
2008). More importantly, disgruntled party leaders became less tolerant
with poor government performance in the absence of valuable coalition
compensations. Not surprisingly, opposition leaders became decisive actors
in the ousting of two more presidents in 2000 and 2005.
GHOST COALITIONS AND DEMOCRATIC

ACCOUNTABILITY
The main purpose of the book has been to understand the functional dimen-
sion of ghost coalitions, and how they provided presidents and legislators with
coalition insurance to facilitate policymaking in an adverse environment. But
this volume could not be complete without discussing an important norma-
tive dimension of ghost coalitions: the extent to which they thwarted demo-
cratic notions of representation and accountability.
The notion of political accountability refers to the extent to which
public officials are responsible for their actions “by those they claim
to be entitled to speak for” and across a network of government agen-
cies that can “call into question, and eventually punish, improper ways
of discharging the responsibilities in a given office” (O’Donnell 1999:
165; Mainwaring and Welna 2003). In the fi rst sense, ghost coalitions
created a vertical—electoral—connection between voters and politi-
cians along clientelistic, not policy-oriented, agreements. For much of
the contemporary democratic period, Ecuadorian institutions prevented
the development of “vertical” accountability links between voters and
policymakers. Legislators, for example, were subject to frequent elec-
toral renewal (every two years between 1984 and 1996) but legislators—
and presidents—were banned from seeking immediate reelection. Thus,
elections did not provide the means to reward the good performance of
elected officials nor to “vote the rascals out of offi ce” (Przeworski et al.
1999; Stokes 2001).
Ghost coalitions provided an informal mechanism to “reconnect” the
demands of voters and the career ambitions of politicians. Legislators
were often interested in obtaining the necessary resources from the gov-
ernment to do constituency service in their district. Through government
cooperation, legislators could, for example, deliver pork and patronage to
local cronies, speed up a pending loan for a province, obtain payments on
delayed teachers’ salaries, or help campaign supporters obtain an operat-
ing license for opening a new business or gaining a government contract.
In the absence of immediate reelection, voters rewarded “good perfor-
mance” at the local level. Despite the fact that voters have widely regarded
political parties as corrupt and obsolete institutions, it is likely that voters
were aware of and keen to reward good party performance. Scholarly
research illustrates that political parties during the nineties, continued
to consolidate their regional strongholds in the Coastal region, namely
the PSC and the PRE, and in the Highlands, namely ID, and Pachaku-
tik (Freidenberg 2008; Pachano 2006). By the time legislative reelection
had been reintroduced in Ecuador in 1996, legislators had simultaneously
lost many prerogatives to bargain resources for their constituencies. This
unfortunate shift did, in the long run, undermine the legislators’ ability
to obtain resources for their provinces at the national arena and many
of them sought to continue their political careers as mayors, in the local
government (Mejía Acosta et al. 2008).
The nature of ghost coalitions in Ecuador also influenced mechanisms
of “horizontal” accountability. The absence of horizontal accountability
refers to “the unlawful encroachment by one state agency upon the proper
authority of another” and the corrupt or “unlawful advantages that public
officials obtain for themselves and/or their associates” (O’Donnell 1999:
38–41). The defi nition demands two fundamental clarifications. Regard-
ing the nature of the oversight, horizontal (or intrastate) accountability
should include not only legal transgressions but also oversight and sanc-
tions related to violations of political power, as in the case of cabinet and
ministerial impeachments, where public officials are “answerable” to (and
can be removed by) the legislature (Mainwaring 2003: 11). Secondly, the
notion of accountability should also include cases where actors are not in
a vertical (principal-agent) relationship of hierarchy, for example, when a
public agency or government official is formally (by law or public decree)
answerable to other actor (Mainwaring 2003: 15; cf. Moreno et al. 2003:
80). A case in point is the ombudsman, who is not a principal in the sense
that he or she did not elect Congress or the president (and in some cases the
opposite may be true), “but the president and legislators may be required
to answer to (be accountable to) the ombudsman, the fi scalía, the contralor
and other mechanisms of oversight” (2003: 15).
Formally speaking, Ecuador had a multiplicity of mechanisms and gov-
ernment entities to ensure the oversight and control of government actions.
But ghost coalitions thwarted mechanisms of horizontal accountability by
converting agencies of control and oversight into instruments of coalition
bargaining and political blackmail. The effective application of checks and
balances, for example, was conditional on the scope and nature of political
coalitions. For instance, presidents had the ability to freely appoint cabinet
ministers, but legislators had the ability to initiate impeachment proceed-
ings against them. Legislators could also remove presidents from office on
the grounds of mental incapacity (simple majority required), or through
regular impeachment proceedings (two-thirds majority). Presidents could
nominate candidates for oversight agencies, including the comptroller
general, the procurador, the attorney general, and the superintendents
of banking, public companies, and telecommunications, but the legisla-
tive majority congress was in charge of their selection and appointment.1
Until 1998, the executive and the legislature had joint ability to nominate
Supreme Court judges (CSJ), but these were appointed to a six-year ten-
ure by a qualified (2/3) congressional majority (renewed in thirds every
two years without term limits). Only after the 1998 constitutional reforms
did the Judiciary gain political autonomy in Ecuador: CSJ Magistrates
(composed of a president and 30 magistrates) were nominated by a wide
range of social and political actors and elected within the Judiciary by an
administrative branch called the Consejo Nacional de la Judicatura (CNJ)
and were appointed for life. These reforms were originally meant to reduce
incentives for (political) strategic behavior (Iaryczower, Spiller, and Tom-
masi 2002; Helmke 2004). 2
The political control of oversight agencies was a valued coalition incen-
tive in the complex coalition-making game. Often, the appointees tended
to reflect the preferences of the pivotal legislator in Congress (usually the
Social Christian Party). Not surprisingly, these agents became “answer-
able” to the partisan preferences of those who elected them. Even after the
1998 reforms that granted formal judiciary independence, the CNJ and the
CSJ themselves were subject to political influencing. At stake, for exam-
ple, was the magistrates’ ability to decide on contradictory resolutions of
minor courts, to declare the “inapplicability” of a legal procedure, to “lift”
the legislative immunity to legislators accused of corruption scandals, to
appoint two of the nine members of the Constitutional Tribunal (TC) and
decide which administrative and unconstitutional demands be submit-
ted before it. The political turmoil over the appointment of two (of three)
new magistrates for the Second Criminal Chamber in 1994 illustrated the
political relevance of pending trials under that jurisdiction: the Isaías case
(prominent bankers involved in a faulty government bailout case to save
their Filanbanco bank), the Bucaram case (former president accused of a
corruption scheme for importing school supplies) and the Mahuad case
(former president alledgedly involved in a campaign fi nancing corruption
scandal). Despite formal predictions for cabinet autonomy, government
control and judicial independence, the political logic of ghost coalitions
permeated the use of judicial inquiries, government audits and even con-
gressional impeachments of government authorities. In the short run, gov-
ernment agencies of oversight and control became instruments of partisan
control and political blackmail. In the long run, the political capture of
oversight bodies undermined citizens’ confidence in the workings of the
democratic institutions (Mainwaring and Welna 2003; Mainwaring et al.
2006).
* * *
In his classic “Illusions about Consolidation” article, Guillermo O’Donnell

made an eloquent case for studying, not the missing attributes or demo-
cratic gaps that separate new polyarchies from the more established
democracies in the Northwest, but the actual practices and observed rules
of the political game that are widely shared and deeply rooted in every
day practice (O’Donnell 1996). I return to this basic premise to emphasize
the relevance of understanding how ghost coalitions work. In compara-
tive perspective, this book offers an expanded framework to understand
informal coalition-making strategies available in fragmented presidential
regimes. In Ecuador, the approach is especially relevant to understand
why, when and how presidents and legislators crafted and sustained polit-
ical agreements, and whether those lessons could be replicated in other
policymaking arenas.
Ghost coalitions offered functional mechanisms to enable political trans-
actions between politically weak presidents and locally-oriented legislators.
Through clandestine agreements with the government, opposition parties
could avoid the liability of policy decisions and presidents could secure leg-
islative support for policy initiatives. In this sense, ghost coalitions helped
policymakers advance their political ambitions despite the contradictory
cooperation incentives offered by the formal rules of the game. Although
ghost coalitions were not efficient coalition-making devices, they helped
reduce the cost of political transactions; they did not contribute to long-term
policy agreements, but reemerged as a common practice used in different
government administrations for nearly three decades; they did not produce
high quality policy outcomes but were instrumental to avoid policy dead-
locks or large government defeats. In short, these informal coalitions did
not produce sustainable programmatic consensus but provided a functional
form of governance to overcome a highly confrontational environment.
Paradoxically, political reform attempts intended to improve governance
conditions in Ecuador in the late nineties focused on addressing the con-
sequences of the problem (a costly decision-making process peppered by
corruption scandals), rather than the cause (the absence of valuable coop-
eration incentives for policymaking). Constitutional reforms sought to
empower the president, as a decisive policy actor, at the expense of the
legislature. Consequently, political parties in Ecuador lost the opportunity
to formalize or bring back to light available currencies that facilitate politi-
cal cooperation in any other democracy with divided government. After the
reforms, parties lost their capacity to do case work for their constituencies,
to negotiate the allocation of government transfers, to institutionalize the
legislative lobbying of interest groups, to develop the technical ability to
propose alternative policies to the executive, and to share responsibility for
policy decisions. The parties’ inability to effectively represent the demands
of citizens became a contributing factor leading to the collapse of the party
system a decade later.
There are no quick institutional fi xes to produce effective and repre-
sentative democracies in new poliarchies. Rather, this is a long-term pro-
cess that hinges on the ability of democratic actors to develop and sustain
political agreements over time, and the capacity of institutions to hold poli-
ticians accountable for their policy decisions. The Latin American experi-
ence shows that executive efforts to break the cycle of political instability
through charismatic leadership and confrontational politics has led to fur-
ther instability and invited the return of old authoritarian practices.
Notes
NOTE TO THE PREFACE
1. Exploring the linkage between policymaking patterns and the quality of

policies is a question that exceeds the scope of the present book.
NOTES TO CHAPTER 1
1. Different from neo-liberal reforms intended to promote a free-market econ-

omy, the notion of market-oriented reforms refers to the state’s attempt to
“strengthen substantially the market elements in a mixed economy while
preserving significant state intervention” (Weyland 2002: 14).
2. A complete list of economic reform initiatives is reported elsewhere (Mejía
Acosta 2004). The list of reforms is extracted from thorough accounts of
policymaking in Ecuador (Araujo 1998, Grindle and Thoumi 1993, Hey and
Klak 1999) and cross-examined with journalistic accounts found in media
archives to control any potential selection bias that the cited authors may
have had in selecting initiatives of economic reform (Diario Hoy, Diario El
Comercio, Diario El Universo, The Economist).
3. The question of regime survival is a separate matter. While scholars have
identified the potential of divided governments for producing interbranch
confl ict, José Antonio Cheibub acknowledges, “whether they induce (Exec-
utive-Legislative) deadlock, or affect (democratic) performance, is another
question” (2002: 3).
4. The case of Mexico clearly illustrates this tradeoff. Only when the president’s
PRI party lost the majority status in the 1997 legislature, it became clear that
the institutional source of the Mexican “hyper presidential” system rested on
the backing of PRI’s congressional hegemony on both chambers, not on the con-
stitutional strength of presidents (Weldon 1997; Weldon 2002; Nacif 2003).
5. Identity of interviewee to remain anonymous at his or her request. 22 July
1999.
NOTES TO CHAPTER 2
1. A veto threshold establishes the minimum support required to break a veto

override. The threshold changes according to the constitutional provisions
established for each country: 3/5 in Uruguay, 1/3 in Ecuador, etc.
148 Notes
2. According to George Tsebelis’s absorption rule: “if a new veto player D is
added within the unanimity core of any set of previously existing veto play-
ers, D has no impact on policy stability” (2002: 28).
3. In a similar vein, Krehbiel argues “the concept (of gridlock) itself is not inher-
ently partisan” since stalemate may be the result of “highly partisan” or
“non-partisan” legislative interactions (1998: 4).
4. For the past two decades, the study of (the causes and consequences of) grid-
lock has brought much scholarly attention (Mayhew 1991; Cameron 2000;
Magar 2001; Binder 2003; Nacif 2003).
5. This is a welcome departure from the study of Latin America’s mostly reac-
tive legislatures, where gridlock outcomes are usually considered as the presi-
dent’s failure to set the agenda (Cox and Morgenstern 2002).
6. For simplicity of the argument, a single policy dimension is assumed. Com-
plex spatial models can be designed in two dimensions (Hinich and Munger
1997; Tsebelis 2002), but doing so would obscure the purpose of this section,
to show the relevant tradeoffs between policy preferences and other payoffs.
7. For a full discussion on possible interactions and alternative outcomes, see
Morrow (1994) and Hinich and Munger (1997).
8. In parliamentary systems, the size of portfolio allocations given to each party
tends to grow in proportion to its legislative size. It remains an empirical
question whether each member’s share of the office pie remains constant or
diminishes with a larger number of party members.
9. An empirical application of this index on the balancing of budget deficits in
Latin America can be found in Mejía Acosta and Coppedge (2001).
10. The conditions under which individual—pivotal—legislators may exert their
blackmailing power on coalition-making are further explored in Chapters 4
and 5.
11. The authors claim that electoral malapportionment allowed for over-repre-
sentation of rural districts in Congress, which in turn allowed for the for-
mation of “low maintenance” coalitions, as opposed to the most expensive
“high maintenance” coalitions found in urban districts (Gibson and Calvo
2000).
12. This premise is also present in Scott Morgenstern and Benito Nacif’s “antici-
pated reactions” approach (2002: 15).
13. An interesting exception is Aníbal Pérez-Liñán and Juan Carlos Rodriguez-
Raga’s (2003) use of a computational model to flesh out empirical implica-
tions from the veto players framework in presidential regimes.
NOTES TO CHAPTER 3
1. Jorge Marún (PRE-Nacional), citing former president Abdalá Bucaram

(1996–1997). Interview. Quito, 21 July 1999. The greasy pole is a popular
game throughout Latin America that requires climbing a 15–18 ft. pole cov-
ered in grease, at the top of which there are cash and food prizes.
2. Proactive powers include those that enhance the president’s capacity to push
for legislation, such as the use of decree powers, exclusive initiation of bills,
emergency powers and other prerogatives to call for plebiscites. Reactive or
veto powers usually refer to the president’s ability to block legislative amend-
ments, and they include block veto, pocket veto, partial veto and line-item
veto, according to the breadth and scope of the amendment.
3. For the case of Venezuela, the rate of success of bills initiated in Congress is
surprisingly higher than that of the president (76.6%).
Notes 149
4. The current instability is not an exclusive feature of the current democratic
period, as former president José María Velasco Ibarra led a congressional
ousting of the president in 1933 and dissolved Congress when he was presi-
dent in 1946 and 1970 (Mejía Acosta 2002).
5. According to Art. 47 of the Internal Code of the Legislative Branch (RIFLE),
Congress needs a quorum of at least half of all its members. A qualified
majority, required to make a constitutional change or impeach a president, is
made of 2/3 of congressional members, and a simple majority is needed for
the approval of an organic law.
6. In case of controversial interpretation of the law of alleged constitutionality
of the bill, the Constitutional Tribunal will make a fi nal decision and solve
any impasses between the executive and the legislature.
7. If a president failed to get a bill approved in one legislative term but it suc-
ceeded in the next, two entries for this bill are coded, with FATE=0 in year
t, and FATE=1 in t+1. This coding rule adds 32 more cases to the sample.
8. It is possible that this relative congressional advantage could have discour-
aged some presidents from using decree powers between 1984 and 1998.
9. Legislator Alexandra Vela (DP-Pichincha). Personal communication, March
2003.
10. Between 1979 and 1998 the president of Congress was elected every year
in August, but after the 1998 reform, the mandate was extended to two
years.
11. Michel Rowland García provided me with the cabinet composition data for
Ecuador.
12. The classification is based on two dimensions, the ideological “right-left”
cleavage and a “secular-Christian” divide. Other codes are provided for per-
sonalistic, environmental, regional, ethnic and unknown parties (Coppedge
1997).
13. The data contains bi-weekly reports of favorable popularity rates collected
from a sample of over 1,000 respondents in Quito and Guayaquil since
1988. Jaime Durán, Omar Simon and Tatiana Larrea generously provided
me access to this data.
14. Rodrigo Borja Cevallos. Personal interview. Quito, 2 July 1999.
15. Nelson León (former ID deputy), “Crece el número de desafi liados.” Diario
El Comercio, 13 August 1993.
16. Other government appointments that were subject to legislative agreements
included (the congressional appointment of) Electoral Tribunal members,
Supreme Court judges, Constitutional Tribunal members, Customs adminis-
trations, and the administration of state-owned enterprises.
17. Paco Moncayo. Legislative leader of the Social Democrat Izquierda
Democrática party (ID). Personal interview. Quito, 6 July 1999.
18. Nina Pacari. Legislative leader of Pachakutik (PCK). Personal interview.
Quito, 14 July 1999.
NOTES TO CHAPTER 4
1. Only after 2000, party leaders regained control of candidate nomination

with a constitutional provision to allow for “vote pooling” in the distribu-
tion of seats.
2. Personal interview, Cambridge, MA, 9 July 2002.
3. This assumption holds true even for the government party, which also needs
political incentives to cooperate and advance their political goals.
150 Notes
4. The roll call dataset contains 5 type-I votes, 11 type-II and 33 type-III
votes.
5. Vice President Dahik was acquitted of corruption charges by Congress.
Bucaram was dismissed by Congress on the grounds of mental insanity.
6. The Bucaram dismissal was decided by an absolute, not qualified majority.
Aware of its lack of majority, the legislative opposition decided to carry out
the vote as a legislative resolution (to dismiss him on the grounds of men-
tal incapacity), and avoid a formal impeachment procedure that required an
unattainable qualified majority.
7. The votes for appointing economic control officials (type-III votes) are
excluded due to their high voting unity.
8. Nina Pacari Vega Conejo, National Legislator from Pachakutik (PCK). Per-
sonal interview. Quito, 14 July 1999. The symbolic punishment was the
“ortigamiento” (public bashing with a type of poison ivy on the legislator’s
naked torso) every time the legislator voted against the mandate of the comu-
nidades.
9. Paco Moncayo. National Legislator from ID. Personal interview. Quito, 16
July 1999.
10. The party’s decision to support the president was also modeled as a dichoto-
mous variable, but the decision oversimplifies the nuances of intra-party vot-
ing without producing better predictions.
11. A more accurate test would be to analyze the president’s likelihood of choos-
ing a coalition partner based on its previous legislative performance, but
this was not possible because there are no sequential scores for all legislative
years.
12. Interview with Congressman Ernesto Valle (PRE). Diario Hoy, Quito, 20
January 2004.
NOTES TO CHAPTER 5
1. I use the terms party switching or party defection interchangeably to describe

cases in which legislators abandon their original party affi liation, regardless
of whether they plan to join a new party or remain as independent legisla-
tors.
2. For Brazil, the disaggregated data shows 262 switches in the 1990–1994
period, 212 until 1998, 262 until 2002, and 272 projected until the end of
2006 (Desposato 2006). In Guatemala, there were 62 switches in the 2000–
2004 period, and 149 in the subsequent 2004–2008 period (Fortin 2008).
3. The open-list proportional rule in Brazil provides contradictory incentives
for legislators to switch. On the one hand, votes are cast for individual can-
didates but these are pooled and seats get distributed according to the party
label, so party leaders do play an important role in the ranking of the candi-
date on the party “list”. On the other hand, the candidato nato rule guaran-
tees incumbent legislators to run for office again regardless of the party label,
thus providing legislators with incentives for defection (Ames 1995, 2001;
Desposato 2006; Mainwaring 1999: 141; Samuels 2004).
4. Conaghan (1995) provides a substantive description of this scenario, in
which most party defections during this period are explained by direct—
personal—confl icts between party leaders and its members.
5. The existing closed-list PR system was abolished to loosen the grip of party
leaders on candidate nominations, or partidocracia. Instead, a “free-list”
system was adopted so each voter had the freedom to choose from any
Notes 151
candidate within the party list and among lists, regardless of party nomi-
nations (Ames 1995a; Farrell 1997). With the restoration of a direct link
between voters and candidates, the path was set for the proliferation of
personalistic politics in an already personalized political system.
6. Downs further assumes that the ideological spectrum is uni-dimensional and
that parties are unitary agents that seek to maximize voters by placing them-
selves at the center of the spectrum (1957).
7. Desposato uses a conditional logit model (exploring individual’s behavior
given a number of purchase or consumption choices), which remains to be
tested for explaining party switching in Ecuador (Desposato 2006).
8. The cumulative switching history looks like this: if a legislator switched once
in year t and switches again in year t+3, a 1 is coded in t, t+1, and t+2, and
code 2 in t+3.
9. An alternative (dummy) variable that captures the difference between diputa-
dos nacionales (elected proportionally by a single national district) and
diputados provinciales (elected proportionally according to the size of the
province) is also tested with significant results but is not reported in this
analysis.
10. The alternative argument could also be made: a greater number of reelections
accumulated in the past would provide greater job security to legislators will-
ing to switch parties.
11. Before 1994, only 13.82% of all congress members served another term
in office given that a constitutional rule had banned immediate legislative
reelection. To count non-consecutive reelections, these are simply coded as
the instances in which legislators were elected to Congress again, that is,
after sitting out at least for one term.
12. Before the 1998 Constitutional Reforms, the bulk of the legislative work was
organized around the Congressional Plenary made of five Permanent Legis-
lative Committees: Civil and Penal Issues, Labor and Social Issues, Fiscal,
Banking and Budget Issues, Economic, Agriculture, Industry and Commerce
Issues, and House Committee (Comité de Mesa). After 1998, all congress
members were required to belong to a legislative committee, but the top five
remained the most relevant congressional committees, so the coding is not
affected by the reform.
13. To measure the absolute ideological distance from the center, the model
adapts Coppedge’s classification according to a five-point ideological scale:
left parties (FADI, MPD, PCK, PLN, PSE), center-left (DP before 1994, ID,
PD), center and populist parties (APRE, CFP, FNV, LP, MIN, MPS, PCD,
PNR, PRE, ROL), center-right (CID, DP after 1994, FRA), and right parties
(PCE, PLRE, PSC, PUR). Then, all center parties are coded 1, 2 for center-
left and center-right parties, and 3 for extreme center and left parties.
14. “Crece grupo de Desafi liados,” El Comercio, Quito, 13 August 1993. Con-
sistent with model predictions, Leon came from the small Cañar province
(M=2) and a relatively small party (ID=10.8%).
15. Other variables for economic performance (GDP growth, fiscal balance), and
dummies for time and presidential administration were tested, but none were
found significant nor reported here.
16. Hidalgo was elected under Partido Liberacion Nacional (PLN) in 1994 but
became independent under DP in 1996 and under FRA in 1998.
17. Centrist parties are coded 1, center-left or -right parties are coded 2, and
extreme right or left parties are coded 3.
18. Instead of raising taxes, legislative parties had alternative plans to finance the
2001 fiscal deficit. The left (ID and DP) proposed to improve tax collection
152 Notes
in the Customs Administration, whereas center-right parties (PSC and PRE)
proposed to make use of oil revenues.
19. Marcelo Santos, President’s Chief of Staff. Personal interview, Quito, April
2001.
20. Diario El Comercio, Quito, 20 May 2001.
23. Reynaldo Yanchapaxi (DP-Cotopaxi), quoted in Diario El Comercio, Quito,
20 May 2001.
24. For future research, it would be relevant to test whether legislators coming
from poorer provinces (with low education rates, high infant mortality rates)
were more likely to trade votes for favors with the president.
NOTES TO CHAPTER 6
1. A condensed version of this chapter was published in Informal Institutions

and Democracy: Lessons from Latin America, edited by Gretchen Helmke
and Steven Levistky, Baltimore: Johns Hopkins University Press. 2006.
3. Personal interview, Quito, 19 July 1999.
4. Personal interviews, Quito, July 1999.
5. DP legislator Alexandra Vela. Personal interview, Quito, 11 July 2001.
6. In her work on coalition-making in Italy, Mershon argues that politicians
were able to “raise” the payoffs of coalitions by expanding—among other
things—the number of sub-cabinet positions available to coalition partners
(1996: 538).
7. “El PRE y el Gobierno efectivizan su acuerdo” Diario Hoy, Quito, 20 Janu-
ary 2004.
8. Diario El Comercio, Quito, 8 July 2001.
9. Diario Hoy, Quito, 14 February 1999. p. 2-A.
10. Diario Hoy, Quito, 7 July 1995.
11. PSC leader León Febres Cordero cried to Dahik: “The fox has tried to play
smart again but his time has come… the people will capture and sentence
him.” Diario Hoy, Quito, 7 July 1995.
12. The DP-PSC was portrayed as a “natural alliance” since the two parties
had consistently collaborated in the past to drive President Bucaram out of
offi ce in 1997 and to pass important legislation during the 1998 National
Assembly. The fact that PSC decided not to run in the 1998 presidential
election was interpreted as an implicit endorsement of the DP presidential
candidate.
13. Personal interview, Quito, 15 April 2001.
15. Diario El Comercio. Quito, 22 November 1998.
16. A few months later, Aspiazu went to jail for tax evasion, and from there,
he confessed having made a $3.1 million dollar campaign donation to the
Mahuad presidential campaign. The scandal consisted in Mahuad’s failure
to report the contribution to the Electoral Tribunal (TSE) in due time.
17. Diario El Comercio, Quito, 19 July 1999, p. A3.
18. Diario El Comercio, Quito, 28 November 1999.
19. Simón Pachano, personal communication. 17 January 2000.
20. Published interview, Diario El Comercio, Quito, 13 August 2000.
Notes 153
21. “Noboa relies on political quotas”, Diario El Comercio, Quito, 8 July

2001.
22. Congressional party leader, whose name is held anonymous at the person’s
request. Personal interview, Quito, July 1999.
NOTES TO CHAPTER 7
1. The 1998 constitution introduced two exceptions: the comptroller is now
nominated by Congress and appointed by the president, while the fiscal gen-
eral is nominated by the Judicial Council and appointed by Congress.
2. These included groups as diverse as former presidents, the Bishops Confer-
ence, former CSJ presidents, other magistrates of the judiciary, the National
Federation of Lawyers, human rights organizations, the deans of the law
schools, newspaper associations, indigenous organizations, teacher and
labor unions, production chambers, and the popular initiative.
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Index
A Chile 2, 11: coalition-making 135; Con-

abstentions 15, 136 certación 30, 135; presidential
accountability, ghost coalitions and success rate 44, 45, 46
143–4 Christian Democrat Party (DP)
Aguayo, Alejandro 131 (Ecuador) 74, 76, 99, 100, 118,
Alcántara, M. 74, 76, 124 129–30, 131
allocation of powers 10, 43 clandestine agreements 13–14, 15, 21,
Ames, B. 65, 97, 98 37, 41, 136, 137, 140, 144–5
Andrade, Raul 125 clientelism 112, 113, 135, 137
Araujo, C. 124 closed-list voting system 26, 64, 88,
Argentina 2, 11, 18; coalitions in 30; 103, 150
vote-buying 136 coalition incentives 11, 26–31, 32,
Aspiazu, Fernando 130 37-8, 132; electoral costs and 8,
28; elimination of 19, 22; insti-
B tutional reform and 16–17; party
backwards induction 32, 70 leaders offering 14, 21, 33, 35,
Baquerizo, Leopoldo 83 65–6, 67, 69, 88, 138–9
Bolivia 2, 18 coalition-making (see also ghost
Borja, Rodrigo 5, 55, 122 coalitions; presidents, coalition-
Brazil 2, 9, 10, 43, 138; coalitions in making; reform coalitions) 120;
30–1, 135–6; party defections ‘gray dimensions’ of 37–9, 41,
86, 88, 89, 97, 99; political 135–40; in presidential systems
instability 18; presidential suc- 9–17, 21, 23, 39; strategies of
cess rate 44–5; vote-buying 136 137–8; visibility of 38, 41
Bucaram, Abdalá 6, 18, 141 Coalition of Popular Forces (Ecuador)
Bucaram, Asaad 76, 80, 99, 117 76
Bucaram Pulley, Jacobo 82, 123 Code of Ethics 94, 101, 125, 132–3,
budget process 16–17 141
collective bargaining 21
C Collor de Mello, Fernando 18
cabinet ministries 57, 136; appoint- Colombia 2, 30; presidential success
ments to 11, 13, 14, 27, 30, 34, rate 44, 45, 46; vote-buying 136
121–2, 143; coalition partners in Conaghan, C. 57, 150
51, 57; resignations from 122 Concertación (Chile) 30, 135
Calvo, E. 30 conditional leadership 33, 46, 59, 62
camisetazos 85, 116 Confederation of Indigenous Nationali-
Carey, J. 37 ties of Ecuador 4
caudillos 35, 40, 83, 108 Congress (Ecuador) 63, 105, 115, 120,
Cheibub, J.A. 55 149, 151; appointments to 72,
166 Index
81, 138; legislative process 48, Ecuador (see also presidents): coalition
50; president and 6, 50, 72, 120; formation 12–13; economic cri-
size of president’s party in 55–6; sis 7, 8, 129, 130; elites in 3–4;
and voting procedures 71, 72 ethnic conflict 4; ghost coalitions
Constituent Assembly 16, 141 in see ghost coalitions; legislative
Constitution (Ecuador): 1979 114–15; process 47–52; modernization
1998 16, 50, 132 reforms 2-3, 5, 6, 7–8; party
constitutional powers (see also decree unity 66–7, 71–81; political
powers; veto powers) 11, 43, 46, instability 17; regional differ-
115, 118; and economic reform ences 3–4; voting patterns 71–81
bills 50, 54–5; proactive/reac- El Salvador 10
tive 10 elections 40, 120–1; party defection and
constitutional reforms 16–17, 141, 145; 92–3
presidential success and 59–60 electoral calendar 81; and bill approval
Constitutional Tribunal 120, 125, 131, 51; and ghost coalitions 80–1,
144, 149 84; impact on voting unity 77,
Coppedge, M. 51-2, 106 80–1; and party defections 92, 97
Correa, Rafael xvii electoral connections 76, 85, 108, 139;
corruption 111, 117, 128, 140–1 effect on party defections 92, 94,
Costa Rica 2, 10; political careers 97–8; 139; and party dissidence 102–3
presidential success rates 44, 45 electoral reforms 4, 16, 22, 66, 88, 102,
Cox, G. 11 141
Electoral Tribunal 93, 120, 125, 149
D Esparza, Gary 82, 118
Dahik, Alberto 7, 16, 18, 109, 127–8 exchange rate regimes 6–7
decree powers 4, 46, 50, 60; use of 12, executive appointments 122-3, 130
39, 42, 54, 138 executive decree authority see decree
Deheza, G.I. 47 powers
Democratic Left Party (ID) (Ecuador) executive/legislature cooperation
74, 76, 118, 142 10–11, 31–2; ‘anticipated reac-
democratization, economic stability and tions’ framework 11; and cor-
1–2, 2–3 ruption 111; ideological affinities
Deposit Guarantee Agency 129 and 51–2; presidential success-
Desposato, S.W. 90 rates 43–4, 47, 48
DiPalma, G. 37 exit, voice and loyalty 20, 85, 86–90
discretionary expenditures 16–17
dissension 38–9, 70, 82, 139; reelection F
and 105–6 Febres Cordero, León 50, 55, 74, 94,
dollarization reforms 4, 5, 9; ghost 127, 128, 129
coalition and 129–31 financial liberalization 2–3
Downs, A. 89 fiscal reform, voting on 101–2, 103,
Durán, Jaime 129 107, 124–5, 131
Durán Ballén, Sixto 5, 6, 55, 94, 127 Fiscal Transparency Law 9
Fox, Vicente 135
E Freidenberg, F. 74
Economic Emergency Decrees 48, 54 Fujimori, Alberto 18
economic reform 2, 5, 114, 115; politi-
cal instability and 18–19 G
economic reform bills 50–4; constitu- game theory 32
tional powers and 54–5; fate of ghost coalitions 13–16, 21, 36–40, 107,
48, 50; impact of time factor on 111, 117–18, 132; 1998 consti-
approval 57–8; partisan powers tutional reform
and 55–7; voting patterns 72–3, and 16–17; accountability and 143–4;
73–4, 81 checks and balances 15, 143; in
Index 167
Ecuador 113–17, 127–33, 134, 70; and presidential popularity
136–41, 143-5; electoral calen- 115–16
dar and 80-1, 84; institutional indigenous, political activity of 4
change and 140-1; monitoring informal bargaining see ghost coalitions
and sanctioning 125–6, 140 informal institutions 112–13, 117–26;
Gibson, E. 30 and ghost coalitions 113–17,
gobiernistas 111, 116, 132 132–3
government officials, appointment of institutional change 140–1
123 integrative powers 11
gridlock 25, 47 Internal Code of Legislative Procedures
Grindle, M. 3, 52 (Ecuador) 72
Guatemala 86 International Financial Institutions 114
Gutiérrez, Lucio 6, 7–8, 18, 126, 130,
131 J
Jamriska, Dr 121
H Jaramillo (Finance Minister) 130
Hidalgo Bifarini, Guillermo 97 judiciary, appointments to 120, 128,
Hirschman, A. 86 143, 144
Honduras 10; presidential success rates
44, 45 K
Hurtado, Osvaldo 5, 57, 76, 80, 82, Krehbiel, K. 25, 65
100
L
I Laver, M. 30, 37
ICC (Impuesto a la Circulacion de legislative cooperation, benefits of 118–20
Capitales) 129 legislatures (see also executive/legisla-
ideological distance 25, 29, 34, 70, 138; ture cooperation) 46, 47, 64;
mean left-right position of legis- fragmented 4, 5, 8
lature 51–2, 58; and presidential León, Nelson 93
success 39, 42 liabilities of coalition making 15, 35–6,
ideology: and party defections 89, 93, 136, 139
98–9, 109; and party dissidence Limongi, F. 55
106–7, 109; and variations in Lora, E. 2
voting unity 74–6, 83 Lucero, Wilfrido 116
impeachments 122, 125–6, 128; voting
on 72, 73–4, 81, 138 M
‘impunity by consent’ 125, 133, 141 Mahuad, Jamil 18, 68, 76, 111, 116,
Index of Structural Reform 3 132; and dollarization reform 4,
individual (pivotal) legislators 20, 24, 7–8, 9, 129–31
39, 73, 79-80, 124–5; bargain- Mainwaring, S. 10, 43, 56, 65, 88, 99
ing with 32, 33, 35, 38, 40, 41, market-oriented reforms 1, 3-5, 76; in
56, 60, 61, 62, 69, 124, 135–6; Ecuador 6–7, 19
cooperation dilemmas of 13, Mateos, A. 76, 124
69, 82–3, 85, 86–90, 136, 139; Marún, Jorge 130, 148
defection of see party defec- Mayhew, D. 87
tion; dissidence of 86, 101–7; media 117, 118, 131
electoral connection of 76, 85, Menem, Carlos 11, 30
92, 94–7, 108; goals of 87–9; Mershon, C. 37, 152
independence of 13, 21, 37; Mexico 2, 10; coalition-making 135;
motivation to cooperate 26–8; political careers 97–8; presiden-
and party unity 62–3, 64–6, tial success rate 44–5
76, 81; political careers 82, 85, Mills, N. 57, 118
88–9, 94, 97–8, 106, 108, 136, modernization reforms 2–3, 5, 127–8
142; preferences of 26–8, 40, Moncayo, Paco 74, 130
168 Index
Monetary, Stability and Economic 90, 112; transaction costs 90,
Recovery Law (Ecuador) 131 137, 139
monitoring ghost coalitions 123–6, 140 party discipline 45–6, 107; and coali-
Morgenstern, S. 11, 66 tion-making 25, 29; voting unity
Movement for National Integration and 12–13, 40, 74, 76–7, 81
(MIN) (Ecuador) 80, 100, 118, party dissidence 38–9, 70, 82, 139;
121, 141 ideology and 106–7, 109
Mustapic, A.M. 46 party leaders 13, 21, 23–4, 68–9,
70, 88, 138, 141; as coalition
N brokers 14–15, 34–5, 65–6,
Nacif, B. 11 67–8, 81–2, 83, 117, 123, 138;
Nebot, Jaime 127, 128, 129 distribution of incentives 33, 35,
Neustadt, R.E. 52 88, 138–9; and party unity 62,
Nicaragua 10 63, 64–5, 66–7; preferences of
Noboa, Gustavo 5, 9, 80, 101–2, 107, 25; president bargaining with
121, 124, 127, 131, 133 32, 33, 34, 39–40, 41, 42, 62,
nonvoting events 72 67–8, 82, 123, 136, 139
party switching see party defection
O party unity 12–13, 63, 69, 87, 138; in
O’Donnell, G. 144 Ecuador 66–8, 81, 83–4; effect
office-seeking incentives 27 on policy stability 25; electoral
ombudsman 143 system and 64, 66–7; party
open-list voting system 26, 66–7, 88, 150 leader and 62, 63, 64–5, 66–7;
opposition parties 7, 8, 11, 15, 37, 40, patterns of 71–81
116, 144–5; coalitions with 12, patronage 11, 13, 14, 27, 30–1, 89,
13, 60–1, 136; defection from 112, 121, 122–3, 135
99; voting for government 36 payoffs (see also particularistic benefits)
Organic Law of the Legislative Branch 34, 119–25, 132, 134, 138;
(Ecuador) 72 optimal 32; programmatic 30,
31–2, 38, 135
P People, Change and Democracy (PCD)
Pacari, Nina 74 (Ecuador) 100
Pachakutik (PCK) 4, 74, 99, 142 Pérez, Carlos Andrés 18
Pachano, S. 98 Pérez-Liñán, A. 99
Pachón, M. 46 Peru 2, 10, 18; coalition-making 135;
Panama 10, 135 presidential success rate 44, 45;
Paraguay 10; presidential success rate vote-buying 136
44, 45 pivotal legislators see individual (piv-
partial veto 72, 102 otal) legislators
particularistic benefits 30–1, 35, 38, 70, policy change 8, 20, 23, 39–40, 138;
124–5, 135, 139 cooperation and 68-71; incen-
partisan powers 10, 43, 46, 50–1, 55–7 tives for 26–31; presidential suc-
party brokers 14–15, 34–5, 41, 63, 65–6, cess and 43–7
67–8, 81–3, 85, 117, 123, 138 policy concessions 11, 13, 14, 30, 34,
party defection 51, 83, 108–9, 124, 38, 79, 119, 123–4
138, 139, 141; dilemmas of 69, policymaking incentives 26–7
86–90, 135–6, 139; encouraged political blackmail 15, 133
by president 38, 40, 56, 61; from political careers 33; influence of party
the government party 99–101; leaders 15; national legislators
ideology and 89, 93, 98–9, 109; 94; party defection and 82, 85,
institutional constraints 93–4; 88–9, 92–3, 97–8, 108, 109;
modeling 90–4; motivations for party dissidence and 103–6, 108,
87–9; reducing 21; sanctions for 109; provincial legislators 94
Index 169
political costs 8, 28, 36, 115–16, 117, reform coalitions 3, 42, 60–1, 117–18;
136, 137 agent-based explanations 5–7;
political instability 17, 18–19 crisis-based explanations 7–8;
political parties 12–13, 25, 66, 142, institutional explanations 8–9,
145; fragmentation of 4; and 38; reliability of 12
policy change 25; size of, and regional rivalries 3–4
defection 93, 109; voting coali- regression analysis, economic reform
tions 77, 79 bills 52–9
Popular Democracy Movement (Ecua- rent-seeking incentives 27, 30–1, 36,
dor) 74, 99, 102 70, 119, 121, 123–4,135
pork trading 11, 13, 14, 27, 30, 103, reputational costs 28, 132, 134, 137, 140
117, 121 retail agreements 119
power-sharing agreements 30, 35, 119, risk 7
120–1, 132, 134, 135 Rivera, Ramiro 130
preferences 68–71 Roldós, Jaime 80, 99, 117
presidential popularity 28, 40; and bill Roldosista party 76, 80, 82, 98–9,
approval 52, 59; public opinion 99–100, 118,123, 126, 142
and 115–17 roll call votes 62, 71
presidential success 10, 42, 46; bill
approvals 42, 43–4, 47, 48, S
55–6; constitutional reform and Samuels, D. 96
59–60 Sánchez-Parga, J. 125
presidential systems. coalition-making sanctioning 22, 125–6, 140
in 9–17, 21, 23, 39 sanctions, for defection 90, 112
presidents (Ecuador) 12, 23, 24, 48; Santos, Marcelo 127
approval ratings 28, 40, 115, scandal, threats of 15, 125, 128,
140; bargaining with individual 140–1
legislators 38, 40, 56, 60, 61, 62, Schofield, N. 30, 37
124; coalition-making 29–31, Serrano, Fulton 125
31–6, 39–40, 60–1, 77–80, 107, Shugart, M. 10, 43, 56
117–26, 136, 139; constitutional Sicouret, Victor Hugo 130
powers 4–5, 10–11, 114–15; and silent majorities 38, 41
fragmented legislature 4–5, 8, Snyder, R. 96
11, 31–6, 42, 46, 47; instabil- Social Christian Party (PSC) (Ecuador)
ity of 18–19; monetary policies 99, 102, 128, 131, 142; alliance
7; and party leaders 32, 33, 34, with 127–8, 129-30; and party
39–40, 41, 42, 62, 67–8, 82, unity 74; and reform 58, 126, 127
123, 136, 139; preferences of Solidarity Motherland Movement
28–31 (MPS) (Ecuador) 100
programmatic deals 30, 31–2, 38, 135 stabilization policies 1, 5
prospect theory 7–8 status quo 24, 25, 47
public opinion 36, 58–9, 115–16, 140; structural reforms 1
anti-government rhetoric 116–17 Supreme Court, appointment of judges
120, 128, 143
Q
‘Que se vayan todos!’ xvii T
Taylor, M. 46
R Thoumi, F.E. 3, 52
Radical Alfarista Front 76 threats 11, 15, 31, 125
reciprocity 112 Toledo, Alejandro 46
reelection 64, 66, 87, 88, 92–3; and transaction costs 8, 14, 19, 39, 90, 141,
party defection 97; and party 145
dissidence 105–6 treats 11, 31, 120
170 Index
Tsebelis, G. 25 voluntarism 112
vote-buying 40, 107, 113, 136–7;
U individual legislators and 79–80,
unilateral powers 11 82, 84, 93, 103–4, 106–7, 109;
Uruguay 10; Colorado party 46; presi- party leaders and 62, 65, 67;
dential success rate 44, 45 uncertain outcome 67
vote-seeking incentives 28
V voting threshold 24, 31, 107
Velasco Ibarra, José Maria 149 voting unity see party unity
Venezuela 10, 18, 30; presidential suc-
cess rate 44, 45–6 W
veto players 23, 24–5; framework 3, Weyland, K. 7
5; ideological differences 25; wholesale agreements 119
majority party as 25
veto powers 4, 10, 24, 46, 50, 60; use Y
of 31, 39, 42, 48, 54, 138 Yanchapaxi, Reynaldo 103, 125

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Informal Coalitions

Observing our Hermanos de Armas An Industrial Geography of Cocaine

The Politics of the Internet in Third Left in Transformation

Informal Coalitions and

Andrés Mejía Acosta

New York London

Simultaneously published in the UK

Routledge is an imprint of the Taylor & Francis Group, an informa business

This edition published in the Taylor & Francis e-Library, 2009.

© 2009 Taylor & Francis

Trademark Notice: Product or corporate names may be trademarks or registered trade-

Library of Congress Cataloging-in-Publication Data

ISBN 0-203-87898-1 Master e-book ISBN

ISBN10: 0-415-99354-7 (hbk)

ISBN13: 978-0-415-99354-8 (hbk)

1 Pushing Reforms through the Eye of a Needle 1

2 A Proposed Model for Legislative Cooperation 23

3 Presidential Success in a Fragmented Legislature 42

4 Party Brokers and Voting Unity in the

5 Voting at the Margins: Pivotal Players and

6 Ghost Coalitions in the Making of Economic Reforms 111

7 Ghost Coalitions, Institutional Change and Democratic

2.1 Size matters: legislative support and coalition payoffs. 30

3.1 Average presidential success rates in nine Latin American

3.2 The legislative sequence in Ecuador. 49

3.3 Impact of constitutional (decree) powers on the likelihood of

3.4 Impact of the President’s coalition on the fate of economic

3.5 Impact of the ideological distance between the president’s

4.1 Average party unity by party ideology in Ecuador

5.1 Frequency distribution of party switching rates. National

5.2 Probability of voting with the president by district magnitude

5.3 Probability of voting with the president by legislators’

5.4 Probability of voting with the president by party size and

6.1 Informal institutions as deviations from existing

6.3 Patterns of cabinet turnover (1979–2002). 121

6.4 Full of sound and fury? Threats vs. actual impeachment

7.1 The gray areas of coalition-making. 137

2.1 Formal and Informal Coalition Strategies Available

3.1 Likelihood of Approval for Presidential Initiatives of

4.1 A Cooperation Game for Policy Change 69

4.2 Party Unity Scores by Ideology and Vote Type in Ecuador

4.3 Regression Estimates for Voting with the President in

5.1 Logit Estimates in Ecuador for Explaining the Number of

5.2 Frequency and Direction of Party Defections with Respect

5.3 Individual Probability of Voting for Fiscal Reform,

5.4 Motivations of Pivotal Players to Cooperate with

6.1 Discretionary Coalition Payoffs Available to Ecuadorian

Writing about Ecuadorian politics is like trying to tie shoelaces while

I am indebted to many scholars, colleagues and friends whose contribu-

Brighton, UK, August 2008

AGD Agencia de Garantía de Depósito

BEDE Banco Ecuatoriano de Desarrollo

BNF Banco Nacional de Fomento

CFP Concentración de Fuerzas Populares

CID Coalición Institucionalista Democrática

CONAIE Confederación de Nacionalidades Indígenas del Ecuador

CONAM Consejo Nacional de Modernización

CONATEL Consejo Nacional de Telecomunicaciones

CORDES Corporación de Estudios para el Desarrollo

CSJ Corte Suprema de Justicia