Democratic Institutions and Exchange Rates 77 in the legislature.Committees have the resources,including research capabilities and access to the legislative agenda,to offer alternatives to the government's proposals and to monitor the government's policy choices.Since politicians can influence policy even while serving in opposition,politicians in the governing party(ies)will be less unwilling to lose some policy discretion with a fixed exchange rate. To test the role of electoral decisiveness and opposition influence over policy,we classify systems based on their electoral and committee systems.22 For the electoral system,we distinguish between majoritarian or proportional systems based on the work of Arend Lijphart.23 To examine opposition influence over policy,we classify systems according to the "strength"and "inclusiveness"of legislative committees, using a classification developed by G.Bingham Powell and Guy Whitten and Kaare Strom.24 The presence of a strong and inclusive committee system indicates that opposition parties have the ability to influence policy.Strong committee systems possess at least two of the three following characteristics:more than ten committees, specialization to match the government bureaucracy,and limitations in the number of committee memberships held by legislators.Inclusive committee systems require that committee chairmanships be distributed proportionally among all parties,regard- less of their participation in government. We combined these two measures to characterize different systems:majoritarian- low opposition influence,proportional-low opposition influence,and proportional- high opposition influence.25(There were no cases of majoritarian-high opposition influence.)26 We then included dummy variables for majoritarian-low opposition systems and proportional-low opposition systems in our analysis.We expect that the majoritarian-low opposition influence systems will be least likely to participate in a fixed exchange-rate regime,that proportional-low opposition influence systems will be somewhat more likely to fix the exchange rate,and that proportional-high opposi- tion influence systems will be most likely to participate in a fixed exchange-rate regime. We contend that another feature of electoral systems also affects the incentives of the governing party(ies)over the exchange-rate regime:the exogeneity of electoral timing.In most parliamentary systems the governing parties have the discretion to call for an election at any time,up to a specified maximum term.The government 22.See Powell 1989:and Strom 1990b. 23.Lijphart 1984. 24.See Powell and Whitten 1993:and Strom 1990a. 25.Majoritarian-low opposition influence systems include Australia,Canada,France,New Zealand, the United Kingdom,and the United States.Proportional-low opposition influence systems include Ire- land,Israel,Italy,Japan,and Spain.Proportional-high opposition influence systems include Austria,Bel- gium,Denmark.Finland,Germany.Netherlands,Norway.Sweden,and Switzerland. 26.It could be argued that the United States should be classified as a majoritarian-high opposition influence system.Congressional committees are relatively strong vis-a-vis the executive,but since the majority party dominates leadership posts,they fail to meet Powell and Whitten's inclusiveness criteria. The possibility of divided government,however,means that the party that controls the presidency (that is, the government)does not necessarily hold leadership positions in the committee system.As a check on the influence of the U.S.case,we reran our analysis without the United States in the majoritarian-low opposi- tion influence category.Dropping the U.S.case from this category did not substantially affect the results.Democratic Institutions and Exchange Rates 77 in the legislature. Committees have the resources, including research capabilities and access to the legislative agenda, to offer alternatives to the government's proposals and to monitor the government's policy choices. Since politicians can influence policy even while serving in opposition, politicians in the governing party(ies) will be less unwilling to lose some policy discretion with a fixed exchange rate. To test the role of electoral decisiveness and opposition influence over policy, we classify systems based on their electoral and committee systems.22 For the electoral system, we distinguish between majoritarian or proportional systems based on the work of Arend Lij~hart.~~ To examine opposition influence over policy, we classify systems according to the "strength" and "inclusiveness" of legislative committees, using a classification developed by G. Bingham Powell and Guy Whitten and Kaare Str~m.~~ The presence of a strong and inclusive committee system indicates that opposition parties have the ability to influence policy. Strong committee systems possess at least two of the three following characteristics: more than ten committees, specialization to match the government bureaucracy, and limitations in the number of committee memberships held by legislators. Inclusive committee systems require that committee chairmanships be distributed proportionally among all parties, regard￾less of their participation in government. We combined these two measures to characterize different systems: majoritarian￾low opposition influence, proportional-low opposition influence, and proportional￾high opposition influence.25 (There were no cases of majoritarian-high opposition infl~ence.)~~ We then included dummy variables for majoritarian-low opposition systems and proportional-low opposition systems in our analysis. We expect that the majoritarian-low opposition influence systems will be least likely to participate in a fixed exchange-rate regime, that proportional-low opposition influence systems will be somewhat more likely to fix the exchange rate, and that proportional-high opposi￾tion influence systems will be most likely to participate in a fixed exchange-rate regime. We contend that another feature of electoral systems also affects the incentives of the governing party(ies) over the exchange-rate regime: the exogeneity of electoral timing. In most parliamentary systems the governing parties have the discretion to call for an election at any time, up to a specified maximum term. The government 22. See Powell 1989; and Strom 1990b. 23. Lijphart 1984. 24. See Powell and Whitten 1993; and Strom 1990a. 25. Majoritarian-low opposition influence systems include Australia. Canada, France. New Zealand, the United Kingdom. and the United States. Proportional-low opposition influence systems include Ire￾land, Israel, Italy, Japan. and Spain. Proportional-high opposition influence systems include Austria, Bel￾gium, Denmark. Finland. Germany, Netherlands. Norway. Sweden, and Switzerland. 26. It could be argued that the United States should be classified as a majoritarian-high opposition influence system. Congressional committees are relatively strong vis-a-vis the executive, but since the majority party dominates leadership posts, they fail to meet Powell and Whitten's inclusiveness criteria. The possibility of divided government, however, means that the party that controls the presidency (that is, the government) does not necessarily hold leadership positions in the committee system. As a check on the influence of the U.S. case, we reran our analysis without the United States in the majoritarian-low opposi￾tion influence category. Dropping the U.S. case from this category did not substantially affect the results