This project examines the effects of political institutions on the ability of political parties and interest organizations to resolve distributional conflicts that prevent governments from adopting policies that would increase overall welfare. The three specific objectives of the project are: (1) To develop a new theoretical analysis of the problem of reform capacity, generating testable propositions about the conditional effects of political institutions on the ability of governments to adopt policies that would, at least in principle, make everyone better off (especially when such policies are associated with distributional conflicts among political parties and interest groups). (2) To collect pooled time series data on policy reforms in selected policy areas, and to analyze these data with statistical methods, in order to test the theoretical propositions. (3) To analyze qualitative evidence on decision-making processes in the same set of policy areas, in order to increase the understanding of the causal mechanisms by which institutions influence the reform capacity of governments, and to suggest new hypotheses for future research. The main contribution of the project is that it will develop a new account of the relationship between institutions and reform capacity, offering an alternative to the dominant theoretical approach to institutions in contemporary political science: the veto player approach. According to veto player models, institutionalized power sharing (that is, having many veto players) limits the set of policy changes that are feasible at any given point in time, rendering governments less decisive than they would be if power were concentrated in a smaller number of political parties and institutions. This project, in contrast, is based on the idea that power sharing may enable governments to do things they would not otherwise be able to do.