Harper’s Big Mistake: Modelling the Coalition Crisis Using Extensive-Form Games

Apr

2009

Written by Jesse W Kline

Introduction

At the end of November, 2008, Canada’s political system was thrown into disarray. One month after the federal election, the Government of Canada announced a fiscal update that, among other things, would have ended public subsidies to political parties. As the opposition parties rely heavily on public subsidies, they quickly formed a coalition and threatened to topple the minority Conservative government. In the end, the crisis was averted when Prime Minister Stephen Harper prorogued parliament and bowed to Liberal demands that his government introduce massive fiscal stimulus measures in the budget. Looking back on these events, it seems as though the Harper government’s fatal flaw was to directly attack the finances of the opposition parties. So why did Harper make this mistake, and why did he chose to prorogue parliament as a way to deal with the situation? An analysis of these events using models based on game-theoretic concepts reveals that Harper initially misjudged the situation.