What You Gonna Do When They Come For You? Network Effect Of Information Exposure On Coalition Formation

Most of the existing literature on legislative networks has been largely focused on the strength, formation, and nature of ties amongst legislators. Since most of such studies have been focused on the U.S. political context, it has become customary to address the legislative behavior of MPs and how they align with the ideological boundaries. Concurrently, little research has been conducted on the formation and dissolvement of stable political alliances, such as coalitions. Moreover, most of the existing studies assume that legislative behavior is based on signaling effects. Yet, the effect of information exposure (i.e. signals) and the trail of legislative behavior based on such information, however, has received scant attention. Our aim is to address that lacuna by investigating the network effect of information exposure on coalition formation and legislative behavior through data from a natural experiment. In 2015, after one year of the Ukrainian Parliament procedures, new legislation was enforced on MPs, which required them to declare all their assets publicly. Despite such an abrupt (and unpleasant for them) change, most MPs filled the declarations demonstrating their wealth to the public for the first time. This event was clearly unexpected and was received as similar to a natural or social disaster. Within a few months, the exposure of information turned many MPs from “perhaps rich” to “definitely rich”. We base our analysis on the—strong, but demonstratively justified—assumption that the wealth of MPs became public for the first time through their declarations (it was the first time in history that the actual magnitude and variation of assets were revealed to the public). If there is indeed an effect of signaling, then network effects should have become stronger, since the social theory of homophily predicts that similar actors will form ties and behave similarly (i.e. rich MPs will have similar behavior, and rich and not-so-rich MPs will have a different one). On the other hand, one could hypothesize that the revelation of the information of wealth could make the less wealthy MPs aware of the benefits they can get if they behave in certain ways. Thus, they could replicate the behavior of their wealthy colleagues to accumulate wealth. We investigate how the behavior of MPs actually changed after the declarations became public, and we further explore the effect of declarations on coalition formation. We employ autologistic actor attribute models (ALAAMs)—which represent a variation of exponential random graph models (ERGMs), where the dependent variable is a behavior—to investigate the social influence of wealth revelation in the legislating behavior of Ukrainian MPs after the event of information exposure. Our findings enhance understandings on the organizational processes within networks and elucidate the mechanisms of homophily on the event of information exposure.