See here for an update on negotiations to form the postelection Israeli coalition government. As I predicted in my previous post on the subject, Prime Minister Ehud Olmert and his Kadima Party are trying to form a coalition with the left-wing parties. Free market advocates, however, may be heartened by Kadima's refusal (so far) to let the socialistic Labor Party have the Finance Ministry and its rejection of Labor's proposal for a massive increase in the minimum wage.

At the same time, Olmert says he's leaving open the possibility of allying with the right-wing parties instead. I suspect that he's bluffing. As I noted in my earlier post, these parties categorically oppose Kadima's main policy objective: unilateral Israeli withdrawal from much of the West Bank.

Whether I'm right about Olmert or not, the fact remains that Israeli party leaders have a strong incentive to keep their true coalition preferences secret, or at least be highly ambiguous about them. If, for example, Olmert were to reveal that he prefers a coalition with Labor, that would greatly increase Labor's bargaining power in the negotiations and weaken Kadima's. Such incentives for secrecy make it even more difficult for voters to accurately predict what kind of coalition government is likely to result from an election. This problem further exacerbates the knowledge burdens that a PR system imposes on voters.