Constitutional structures and regime performance in 18 industrialized democracies: A test of Olson's hypothesis

According to Olson's concept of encompassing organizations, strong two-party, plurality oriented political systems should create more 'responsible' public policies than 'weak' multi-party governments based on proportional representation. An empirical measure of 'encompassment', termed popular cabinet support, is developed and tested in a multivariate controlled statistical analysis of 18 industrialized democracies. While Olson's theoretical concept of encompassing organizations appears to hold, his empirical operationalization, namely, strong two-party systems based on plurality electoral rules, does not. The findings reveal that the alternative measures of 'encompassment', popular cabinet support, significantly reduces the rate of unemployment and inflation, indicating that the wider the popular support base of government, the more responsibly these governments behave.