Page last updated at 14:50 GMT, Friday, 7 May 2010 15:50 UK

Lessons from New Zealand in art of coalition building

By Nick Bryant
BBC News, New Zealand

New Zealand, which switched to proportional representation in the 1990s, may be able to teach the UK some useful lessons in coalition government.

It is a far-flung outpost of the Westminster system, with a capital that bears the name of a former British Prime Minister and a parliamentary chamber adorned still with the British coat of arms.

Winston Peters
Winston Peters, kingmaker in 1996, may have overplayed his hand

But Wellington, New Zealand, deviated from Westminster in the mid-1990s when it adopted a system of proportional representation, known as the Mixed Member Proportional system or MMP for short.

Since the 1996 election, the first under the new system, no single party in New Zealand has been able to command a majority.

So Kiwis have come to regard elections as a two-phase affair: first, the voting; and second, the period of government formation that follows afterwards which often takes weeks.

So are there lessons to learn from New Zealand if the UK election fails to produce a clear-cut result?

Horse-trading

Senior British civil servants appear to think so. In Wellington for a recent gathering of public servants from Australia, Canada, Ireland, Britain and New Zealand, the British Cabinet Secretary Sir Gus O'Donnell paid very close attention to a document called the Cabinet Manual.

The new system because has generated a better policy process, a more representative parliament and probably better policy outcomes
Professor Jonathan Boston, director of the Institute of Policy Studies

It lays down the procedures and conventions which come into effect in the event of no single party gaining a majority.

So important has the document become that in a land bereft of a written constitution it is treated as a quasi-constitutional document, though it is not legally binding.

Some of the key elements of the Cabinet Manual are:

• It emphasises that the politicians should be left to their own devices to bargain and horse-trade, without outside interference. Civil servants can assist the negotiation, but usually to provide advice on areas of policy where they may be potential conflict or potential convergence.

• It stresses that there should be a level playing field. That is to say, silver and bronze can band together to beat gold, and the party with the biggest number seats does not get to go first in attempting to form a government.

• It also lays down very clear procedures for the operation of a caretaker government, for the weeks that it normally takes to strike a deal.

The New Zealand civil service does not like to use the terminology hung parliament because it implies paralysis. It believes that it has come up with a workable model which ensures smooth transitions.

Professor Jonathan Boston, who is the director of the Institute of Policy Studies, is adamant that the new electoral system has produced stable governments.

"We've managed perfectly well with our new electoral system, and many would say that it's been an advantage to have that system because it has generated a better policy process, a more representative parliament and probably better policy outcomes," he says.

There is PR and there is PR - you can design it to increase the chance of single-party government
Professor Simon Hix, LSE

He says that the Cabinet Manual, which has caught the eye of Whitehall, has provided a useful guide.

"It's helpful. It provides the rules around what caretaker governments can do for example and has some general principles around government formation. But the art and craft of government formation is a primarily a political art rather than a constitutional art.

"The New Zealand rules around government formation are very loose. They have been described in the international literature as freestyle bargaining. We have very few constraints on what the party leaders can do on the way they go about shaping a new government."

After the 1996 election, the period of uncertainty dragged on for more than a month, as the kingmaker, Winston Peters of the New Zealand First party, continued parallel negotiations with the two major parties, the National Party and Labour.

Since then, the periods of governmental transition have been smoother and less troubled.

Bumpy ride

Rodney Hide, the leader of the small libertarian party, the ACT, which helps keep the present government in power, says that politicians now act in a more grown-up manner.

They know that leaders who overplay their hands eventually get punished by the electorate.

We have learned some lessons as politicians, that the the country expects you when you are elected into a position of influence to use it well
Rodney Hide, ACT Party

"In the early days, it was tough," says Mr Hide, who has a ministerial post in the government, though not a seat in Cabinet.

"We went from one-party rule to parties actually having to work with a third party. They hated it, and the third party loved it, and played their hands as big kingmakers, and there were a few problems.

"It took a while for it to settle down. It was a bit bumpy. But they got punished for that experience.

"Since then we have learned some lessons as politicians, that the the country expects you when you are elected into a position of influence to use it well and to use it wisely and respectfully."

Even though elections under the new system have always produced hung parliaments, New Zealand does not always end up with coalition governments.

Sometimes it produces looser arrangements. At the moment, Prime Minister John Key of the conservative National Party remains in power because of what's called a confidence and supply agreement with two smaller parties, the ACT and Maori Party.

It guarantees that the budget gets passed, and that it will survive motions of no confidence.

At the next election in 2011, New Zealanders will also get to vote in a referendum whether they want to persist with the present system. The expectation at the moment is that they will.

In the meantime, the common-heard message from New Zealand in the event that the UK election produces no clear winner is curiously British: Stay calm and carry on.



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