A Coesian case for an MMP parliamentary system?

An Israeli writer makes a Coaseian case for an MMP parliamentary system over, say, the American presidential system ...

His primary argument is based on Ronald Coase's famous approach to so-called "missing markets": 

People can’t buy and sell pollution, national security etc. The political system creates markets in public policy, where constituencies trade policy preferences.

    The bottom line is that a parliamentary system has many more margins where preferences can be traded. It is a much richer market. There are more parties, and with a coalition virtually every decision is a compromise = a deal = a utility-promoting exchange....

Tough luck however if it's your ox being gored by the horse-trading! 

He also argues that the system offers some advantages to those favouring even a narrowly--focussed minor party , for example ...

In Israel, 16 seats in a parliament of 120 belong to ultra-Orthodox parties. Virtually everything these parties want is unpopular among all 104 other Knesset members. However, the price of these compromises is low for other Knesset members and these parties don’t make many demands beyond their narrow interests. They don’t have a huge amount of political capital but they spend it all on a few policies that are very important to them.

We might however also call this "the wail wagging the dog." And that would depend a great deal on whether or not you're in favour of a narrowly-focused minor party.

He also argues that the degree of "regulatory capture" is much less because ministers in a parliamentary system are politicians rather than from that same industry -- and so there is less chance emerging of the likes of the "Government-Sachs" revolving door that so plagues American administrations (But it does disregard how many lawyers there are in parliament, many adhering to what Dickens called "the one great principle of English law [which] is to make business for itself" -- and how many former schoolteachers...)

And there are two additional incentive for better government too, he argues, in that ...

every minister wants to be Prime Minister someday and has a very powerful incentive to make a successful reform that will make him/her memorable to voters. At the very least a successful reform will guarantee a high place in the list and an additional term.

And then there's the budgetary competition between ministries...

Every minister wants a lot of money and power for his ministry, but there is a government. There is only so much money and only so much power so these are also assigned by negotiation. Each minister has a powerful incentive to make the best possible case for his ministry. It’s like a court where good decisions are stimulated by division of labour between the defense and the prosecution who make carefully argued cases to the judge. (In this case the government and ultimately the public.)

Notably however, he provides no examples of these allegedly "good decisions." (There are few enough around our way, that's for certain! And there is a one-word response to the situation in which the Prime Minister also pulls all the budgetary strings, and that word is "Muldoon"!

Nonetheless, it is still superior he argues to the US system ...

[which] I see it more as a “market maker” model rather than an exchange model. The President decides all these margins him/herself. The problems with this are myriad. There is a cognitive issue – even if the President is politically accountable to the same spectrum of constituencies as a parliament, s/he has limited bandwidth. There is no wisdom of crowds. 

Second of all, the President is not accountable to everyone, there’s just a limit to who can have his/her ear. 

Finally, if you are a market maker you have market power. If there is a deal with surplus which will only get made if you broker it, you will be able to appropriate some of that surplus. This is a big drag on the market.

He makes some good arguments about the benefits of an MMP parliamentary system to a reforming government. He does miss however the primary virtue of the American system, with its separation of powers setting each of the branches of government against each other, with its Bill of Rights and Supreme Court as the ultimate restraint (albeit long breached) which is that they are intended to impede activist governments, not support them.

The tragedy is that this has only managed imperfectly.

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