Do rival political parties enforce government efficiency? Evidence from Canada 1867–2021

This paper investigates the role of inter-party rivalry in enhancing federal government efficiency in post-Confederation Canada. It tests and finds confirmation in the data for two hypotheses. The first is that the ex post size of the first versus second seat share margin is a useful metric for the ineffectiveness of political parties in policing the incumbent's spending behaviour over its period of tenure. The second is the hypothesis that shirking by the incumbent governing party is decreased by greater expected electoral contestability and expected contestability is related to the effective number of competing parties (ENPSeats) nonmonotonically. In this regard the results suggest that contestability in Canada reaches a maximum when the incumbent faces a value of ENPSeats that is closer to 2.5 than Duverger's 2.