It has been found that economic difficulties may lead to a substantial change in the number of parties in a polity, the main aspect used to describe and classify party systems. When crisis strikes the economy, parliamentary representatives of the ruling party will leave it and either join the opposition or develop their own political milieus, forming new parties. In both cases the fragmentation is expected to rise. This hypothesis has been confirmed to be true in Latin America. In this paper I use data on parliamentary elections held from 1980 onwards in 34 European countries to explore whether the dynamics of economic development affects the number of parties. The fragmentation is positively linked with the inflation rate and negatively with the GDP growth. The post-communist context moderates the strength of this relationship. These findings are illustrated with case studies of Greek, Icelandic and Latvian party system dynamics.
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