| Summary: | The present paper is concerned with the preconditions for ministerial government in Iceland and the role of parliament in sustaining it. Ministerial government is a form of coalition governance where the division of portfolios between parties functions as the basic mechanism of managing coalitions. Ministers are policy dictators in the sense that they control their ministries without interference from their coalition partners. Ministerial government is considered a weak form of coalition governance in the literature on account of its susceptibility to principal-agent problems, i.e., the temptation of ministers to adopt policies which are beneficial to their own party, or themselves, even if they are harmful to the coalition as a whole. We argue that ministerial government was the guiding principle of coalition governance in Iceland prior to the crash of 2008. We demonstrate that given a number of conditions, ministerial government can in fact function effectively in the sense of providing the necessary minimum of inter-coalition checks. Instead of the cabinet providing oversight, however, the parties and committees in parliament play a key role in controlling policy drift. For a number of reasons, the financial crash in Iceland undermined some of the features on which ministerial government rested and coalition co-ordination after the crash has diverged significantly from the preceding period. It is too early, however, to tell whether these represent a permanent shift in coalition management in Iceland.
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