As I’m writing this, the last votes of the Spanish general election are being counted and the results are basically out. In this piece, I will provide a short description of the results and four predictions that partially characterizes the scenario that is likely to follow.
For more than 25 years, the Spanish party system had being stable around two big parties who alternated in government with occasional support from nationalist parties. The situation that has emerged from today’s election is novel in the sense that these two parties (PSOE -socialdemocrats- and PP -conservatives) have lost a substantial part of their seats in the congress (90 and 123 seats out of 350), while two new parties have emerged. Podemos, an anti-austerity left wing party, together with its regional branches, has obtained 69 seats, while Ciudadanos, a liberal-democrat party got 40. These two parties have come to replace two other ones which are, arguably, the most notorious losers of the night. The historical communist party, and the coalition it had built around itself barely managed to obtain sufficient support to enter the chamber and fell below the threshold needed to have a parliamentary group. UPyD, a center party that emerged one decade ago in an attempt to break the two party system, did not make it into the parliament and will probably dissolve. Nationalist parties obtained a largely standard result as Catalan conservative obtained 8 seats (compared to 16 in previous election in which they concurred with the christian democrats which did not get a single seat this time), Catalan republican left (ERC) got 9 seats (a substantial increase in comparison to the 2011 election) and the basque nationalists got 6 seats, largely the same.
The situation in the senate is different: the conservative party obtained an absolute majority. The surprising contrast with the congress is due to the fact that the Senate is elected through a baroque system that include senators elected by the regions and an open list ballot. The result is also largely irrelevant, since in what concerns budget approval or passing bills, the senate has no veto power. The only domain in which the Senate has veto power is constitutional reform.
All in all, we are in the domain of the unknown. Of the four national parties, only a grand coalition of PP-PSOE is large enough to gather enough votes, and this is probably highly unlikely given the lack of convergence of the electorates, the rivalry between both parties and the absence of any tradition of pacts of this sort in Spanish democracy -let alone that, imho, it would be strategically disastrous for the junior partner who would neither get credit for governmental action, nor for being a credible opposition party.
Political scientist are often blamed for not making any predictions. While point predictions are really hard, I would like engage in a number of interdependent predictions that can help to draw some bounds on the distribution of outcomes. I will try to reason each of them to make them as reproducible as possible by the reader.
Prediction 1: Spain will resume to a two-party system in the medium run.
This is a consequence of (a) the electoral system as it currently exists and (b) the distribution of voters along the ideological space.
The electoral system has a number of biases (see here for an explanation in Spanish). In a nutshell, it reduces proportionality favoring the concentration of vote as well as rural districts.
Moreover, the space of Spanish parties to grow is largely bounded. Consider the case of Ciudadano’s (C’s). C’s has managed to grow in the center of the political spectrum (it gets most of its support in the 5 and 6 positions of a 1-10 political spectrum, and very few elsewhere), based on a discourse of transparency, economic efficiency, fight against corruption, etc. It has often been the behavior of these voters (either by voting for an option or not voting at all) what has made the difference for one of the two large parties. But it is difficult to see how C’s could forge a durable coalition that would go from the center right (left) to the beginning of the far left (right).
The only possibility of a substantial medium run change in the Spanish party system would need, as a precondition, a reform of the electoral system. However, electoral reforms are zero sum games, but would need the support of at least three out of four parties -particularly given the veto power for constitutional reform of the PP. The only party that has a real interest in electoral reform is probably C’s -this will become clear below- while others has interest in playing the «winner takes all game».
Prediction 2: Podemos won’t support any government in which it is not the senior partner/impose its agenda
Podemos has made clear in many interviews (for example) that it won’t support a government led by the PSOE government- or any other party, for that matter. Arguably, they could be bluffing, but I believe there are reasons to believe that they aren’t.
Firstly, if Podemos could reach an agreement to support a government, it could only be one including the socialdemocrats because other forces either do not have enough votes to form a majority or are too far away in terms of policy.
Secondly, there is the fact that members of a coalition have to govern and be accountable together, but compete separately against each other in elections. A strong force driving coalition government is that, as it was recently the case in UK, junior partner get the worse part. Senior partners gets the credit for policy, the opposition party presents itself as the main alternative for government, while the junior partner of the coalition is typically left without nothing. If this was the only force at play, we would never observe coalition governments, which is absurd, but in the case of Spain and Podemos I think this is particularly relevant.
In my opinion, the medium goal of Podemos and particularly of its leader, Pablo Iglesias, is that of replacing the PSOE as the main party of the left. He is well aware that the two can not survive as big parties in the medium run (as his experience in the communist party shows), and his aspiration is to locate Podemos as a party slightly to the left of where the PSOE currently stands and with a larger spectrum of voters that would go from the left to the fart left -thus forming an hegemonic hard left coalition. For Podemos and the PSOE, in the medium run, this is a zero sum game.
To erode the support of the PSOE, Podemos has played the card of being an «against-the-system-within-the-system» party. Their discourse is based upon the idea that parties of the old regime are corrupt and that «the regime» should be confronted and reformed in a «constituent process». This is hardly compatible with supporting the necessarily moderate policies induce by the experience of government and sharing its responsibility with one of the main old regime parties.
Finally, Podemos is currently not a unified party, but 27 of its 69 seats depend on regional «civic platforms» that would be, probably, hard to discipline if they make it into any agreement.
All this suggests that we are unlikely to see an agreement between the PSOE and Podemos. This is reflected by the harsh speech given by Pablo Iglesias (Podemos’ leader) tonight which enumerated a number of hard to assume red lines («including public health as a constitutional right»): either they can visibly get credit for a set of (probably infeasible, given the commitment to European stability) popular high spending policies, or they control the government without the threat of the PSOE, or otherwise their dominant strategy is to remain out of government.
Prediction 3: There will be new elections before two budgets are approved with p>0.75
Starting tomorrow, parties will have to play against the clock to form a government. If no agreement is reached, then elections will take place again, most likely in March. At the moment, if as I tried to justify above, Podemos will vote against any government including PP or PSOE. If we assume that PP and PSOE vote against each other, and that Podemos will vote against both, there is probably no feasible winning coalition. I think these assumption are pretty safe ones, therefore I attribute a substantial probability to this scenario- let’s say, 0.5.
If the above assumptions as wrong, there are three possible scenarios that are feasible. Firstly, of a left wing coalition (PSOE+Podemos+IU(Communists)) with the abstention of all other groups except the catalan nationalists (ERC and and Conservative) and the PP. This is unlikely, for it would require to somehow buy the abstention of the Basque nationalist too. A variant could be a left wing coalition including the three above and the support of the Catalan nationalist. Something like this could be built, perhaps, around an agreement for a referendum in Catalonia about independence, which Podemos support, that has been a lasting demand of the nationalists, and that the catalan section of the PSOE has flirted with. This is would be very risky for the PSOE, and to some extent for Podemos, whose constituency in the rest of Spain strongly opposes a referendum.
The second big scenario would be a «grand coalition» of PSOE and PP. This would be very risky for the socialist party -and arguably the ideal scenario for Podemos- who would be the junior partner of the coalition and see its policy position shifted to the right, thus leaving the opposition to the two new parties. The only case in which this could happen, I believe, would be as an interim scenario to ensure government until new election are held.
If any of the three above possibilities takes place, which is unlikely, I believe the agreement would be very fragile and presumably very short-lived. A left wing deal would only last until the first slightly unpopular measure have to be taken. A grand coalition would be intrinsically interim. And a left-nationalist coalition would, at most, last until the referendum is held. Currently, the 2016 budget has already been approved. Let’s assume that a coalition agreement includes the approval of the 2017 budget with relatively high probability. It is highly unlikely such a fragile contract would not be broken by 2018, so overall I would bound the probability of survival beyond that point at 0.25 being conservative.
Prediction 4: C’s will be irrelevant in the short run and is likely to lose support in the next election
Before the election, the prospects of C’s were pretty optimistic. The party had emerged in the center and therefore a highly likely scenario was that it would be pivotal in any agreement. If one of the two big parties (presumably the PP) could reach an absolute majority with C’s support, then it, use it, along with the threat of supporting the other could as a bargaining chip to impose an agenda of reforms on the government and make its support contingent on the fulfillment of an agreement.
But if you followed the previous analysis, you may have noticed that C’s doesn’t show up. In my view, C’s is likely to be an irrelevant player in the coming government. The conservative party is unlikely to govern except in the scenario of a grand coalition with the support of the PSOE, and if it has the support of the PSOE, it won’t need the support of C’s. On the other hand, since an agreement including C’s, Podemos and PSOE is in my view not feasible, and PSOE and C’s alone do not have enough seats to form a majority, there is essentially no way in which C’s can make a difference in the Spanish policy space, and the above strategy won’t take place.
Given this, C’s will not manage to take any credit in front of the citizenry for anything they could do in terms of policy. At the same time, if elections are prematurely repeated, it is my belief that the vote will become more concentrated. Podemos and C’s have grown out of their opposition to current scandals, lack of popularity and discontent with mainstream parties. But if the economic recovery is sustained at least in the short run, this tactic is likely to have a limit. Unless something catastrophic (corruption scandal, internal rebellion and scission, …) happens to either PSOE or PP, C’s will have a hard time growing.
Perhaps, the only scenario in which C’s could do better would be one in which the PSOE would form one of the three coalitions above. In the case of a left nationalist, C’s would gather non-nationalist votes; for a left-wing coalition, C’s could erode the center-left pool of the PSOE and in the case of a grand coalition, it could take position as an alternative. None of these scenarios is, however, very likely, in my view.
C’s has also other weaknesses as well that make its current position highly unstable. The party started enjoying a sharp increase following its takeover of UPyD and its positioning a liberal-democrat party with a focus on good economic policy (LSE professor Luis Garicano campaigned for them and directed the economic team). However, during the whole campaign the party only lose support in one poll after another. The internal growth of the party took place in a context of very few months and its members seemed to be, to a large extent, more conservative than its voters -this was embarrassingly apparent when they took position on issues related to gender, for example- or inexperienced in government. Moreover, Garicano, one of the main assets of the party to make its economic policy appealing to the educated elites of the countries, is likely to return to academia after the election, which suggest that the comparative advantage of the party as a guarantee of economic performance is likely to fade.
With this in mind, it is likely that many center-right C’s voters who prefer a PP government to anything involving Podemos will perhaps put their vote into a better use shifting it for the PP and some of its center left voters who wish to see the PSOE freed from their dependence on Podemos will shift to the PSOE.
The December 20 events provided much less information about the future of Spanish politics than any previous election of the last three decades. Beyond the fading of UPyD and the communist, which seem to be pretty definitive, almost nothing is certain. Eventually, all the above may not happening -imagine that Podemos and PSOE may agree to enter a coalition government with the nationalist that some lasts for four years and C’s emerges as the main alternative- but if probabilities represents states of subjective belief, the above predictions are all relatively high probability events in my view.