How We Count Counts: The Empirical Effects of Using Coalitional Potential to Measure the Effective Number of Parties

Despite its conceptual centrality to research in comparative politics and the fact that a single measure—the Laakso-Taagepera index (LT)—is nearly universally employed in empirical research, the question of what is the best way to “count” parties is still an open one. Among other alleged shortcomings, LT has been criticized for over-weighting small parties, especially in the case of a one-party majority. Using seat-shares data from over 300 elections, I have calculated LT as well as an alternative measure (BZ) which employs normalized Banzhaf scores rather than simple party seat shares, as weights. The Banzhaf index is a voting power index which calculates a party’s voting power as a function of its coalitional potential. Though the two measures are highly correlated, I identify three particular party constellations in which the differences between LT and BZ are systematic and statistically significant. In all of these cases, and especially in the case of a one-party majority, I argue that BZ is a more accurate representation of the actual party system, after any given election, while LT is perhaps better interpreted as a measure of the shape of the party system more generally. These findings have many implications, including with respect to the categorization of party systems and the empirical validity of Duverger’s Law