74 International Organization the electoral system to exchange-rate commitments.This link,however,is less clear, reflecting a lack of theoretical consensus among scholars First,recent literature argues that exchange-rate commitments can help stabilize the macroeconomy,providing an external source of policy discipline.12 A fixed ex- change rate,therefore,would provide greater social welfare gains where politicians are unable to pursue responsible monetary and fiscal policies.This argument implies that countries with weak and unstable governments will be more likely to adopt fixed exchange rates,since these governments are often unable to agree on stabilization programs.Given that proportional representation systems produce weaker,less du- rable governments more often than majoritarian systems,this argument suggests that countries with proportional representation electoral systems will be more likely to adopt fixed exchange rates than those with majoritarian systems. A second set of arguments focuses on the policymaking capabilities of the govern- ment to explain exchange-rate commitments.Weak or unstable governments lack the ability to implement the difficult domestic adjustments often necessary to sustain a fixed exchange rate.13 Strong,durable governments are able to pursue the policies required to maintain the fixed exchange rate.In contrast to the argument based on welfare gains,this argument implies that countries with majoritarian electoral sys- tems will be more likely to fix the exchange rate than countries with a proportional representation system.Majoritarian electoral systems usually produce single-party majority governments capable of decisive policy action.Proportional representation systems,on the other hand,typically produce coalition governments.These govern- ments may have difficulty shifting domestic policies to maintain the fixed exchange rate due to the bargaining and negotiation that must occur between the coalition parties.14 Consequently,they will be less able to sustain an exchange-rate commit- ment. Third,some political economists argue that exchange-rate commitments can serve to constrain the policy options of future governments.The "tying the hands"'argu- ment suggests that a government will fix the exchange rate if subsequent govern- ments are likely to possess different policy priorities.In systems where policy change is incremental across governments,politicians have fewer incentives to make an institutional commitment,since they can trust subsequent governments to pursue similar policies.Sharp policy breaks between governments are more likely in majori- tarian systems than in proportional representation systems.15 Consequently,the "ty- ing the hands"argument implies that politicians in majoritarian systems will be more likely to fix the exchange rate than politicians in proportional representation systems. Given the variety of predictions,it is unsurprising that the empirical work on the relationship between electoral institutions and exchange-rate commitments has also been inconclusive.Eichengreen,for instance,examines the influence of electoral 12.See Flood and Isard 1989;Giavazzi and Pagano 1988;and Rogoff 1985. 13.See Eichengreen 1992b;and Simmons 1994. 14.Roubini and Sachs 1989. 15.Rogowski 1987.74 International Organization the electoral system to exchange-rate commitments. This link, however, is less clear, reflecting a lack of theoretical consensus among scholars. First, recent literature argues that exchange-rate commitments can help stabilize the macroeconomy, providing an external source of policy discipline.12 A fixed ex￾change rate, therefore, would provide greater social welfare gains where politicians are unable to pursue responsible monetary and fiscal policies. This argument implies that countries with weak and unstable governments will be more likely to adopt fixed exchange rates, since these governments are often unable to agree on stabilization programs. Given that proportional representation systems produce weaker, less du￾rable governments more often than majoritarian systems, this argument suggests that countries with proportional representation electoral systems will be more likely to adopt fixed exchange rates than those with majoritarian systems. A second set of arguments focuses on the policymaking capabilities of the govern￾ment to explain exchange-rate commitments. Weak or unstable governments lack the ability to implement the difficult domestic adjustments often necessary to sustain a fixed exchange rate.13 Strong, durable governments are able to pursue the policies required to maintain the fixed exchange rate. In contrast to the argument based on welfare gains, this argument implies that countries with majoritarian electoral sys￾tems will be more likely to fix the exchange rate than countries with a proportional representation system. Majoritarian electoral systems usually produce single-party majority governments capable of decisive policy action. Proportional representation systems, on the other hand, typically produce coalition governments. These govern￾ments may have difficulty shifting domestic policies to maintain the fixed exchange rate due to the bargaining and negotiation that must occur between the coalition parties.14 Consequently, they will be less able to sustain an exchange-rate commit￾ment. Third, some political economists argue that exchange-rate commitments can serve to constrain the policy options of future governments. The "tying the hands" argu￾ment suggests that a government will fix the exchange rate if subsequent govern￾ments are likely to possess different policy priorities. In systems where policy change is incremental across governments, politicians have fewer incentives to make an institutional commitment, since they can trust subsequent governments to pursue similar policies. Shasp policy breaks between governments are more likely in majori￾tarian systems than in proportional representation systems.15 Consequently, the "ty￾ing the hands" argument implies that politicians in majoritarian systems will be more likely to fix the exchange rate than politicians in proportional representation systems. Given the variety of predictions, it is unsusprising that the empirical work on the relationship between electoral institutions and exchange-rate commitments has also been inconclusive. Eichengreen, for instance, examines the influence of electoral 12. See Flood and Isard 1989; Giavazzi and Pagano 1988; and Rogoff 1985 13. See Eichengreen 1992b; and Simmons 1994. 14. Roubini and Sachs 1989. 15. Rogowski 1987