Institutions and the stabilization of party systems in the new democracies of Central and Eastern Europe

• Institutions impact elite coordination incentives, and thus party system stability.
• Powerful, directly elected presidents predict increased electoral volatility.
• Absent directly elected presidents, high district magnitude predicts high volatility.
• Bicameralism and concurrence of elections decrease electoral volatility.
• Our model explains party system stability and instability in Eastern and Western Europe, respectively.

Most explanations of party system stability focus on the strength of mass-elite linkages. We highlight the role of institutions, focusing on how electoral rules and elected institutions, especially the presidency, impact elites' incentives to coordinate on a stable set of parties or to form new parties, thus affecting electoral volatility. Using Central and Eastern European elections data, we find that directly elected presidents increase volatility and that presidential power magnifies this effect. Absent a directly elected president, high district magnitude is associated with increased volatility, but district magnitude dampens the impact of an elected president on volatility; hence, our findings underscore the interactive impact of institutions on party systems. We also find evidence that bicameralism and concurrence of presidential and parliamentary elections decrease electoral volatility. Our model not only explains persistently high electoral volatility in Eastern Europe, but the extreme stability of Western European party systems.