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This paper studies the stability of the coalition government formed in 1993 in Japan, called the Hosokawa government, by using a dynamic coalition formation model presented in Fukuda and Muto (2). Ono and Muto (6) studied the stability of the same coalition government by applying the static coalition formation model of Hart and Kurz (4), which employed Owen's (7) coalition value to measure parties' power, and showed that the Hosokawa government was the unique stable coalition government. In this paper, we take into account a negotiation process when parties form a coalition government and apply the dynamic model of Fukuda and Muto (2). We show that coalition governments that include the Liberal Democratic Party (LDP) could form as stable coalition structures if the LDP took the initiative in negotiation, and that the Hosokawa government was stable only when a minor party (other than the LDP) had the initiative in the negotiation.

DYNAMIC ANALYSIS OF STABILITY OF COALITION GOVERNMENTS IN JAPAN 1993