When are parties punished for serving in a coalition government?

Many empirical studies find that parties in government on average lose votes. However, few studies take into account that this cost of ruling may not be uniform across parties. Those that do present dissimilar results. We investigate whether characteristics of parties and coalitions mediate the effect of party incumbency on local election results. Using a large panel data set on municipal elections in the Netherlands enables us to control carefully for omitted variables. We find that the cost of ruling decreases with the number of coalition parties, and after four or more consecutive terms in office. These results are consistent with the grievance asymmetry theory. However, other results remain unexplained by existing theories. One example is the finding that some (niche) parties actually gain seats after incumbency. Thus, there seems to be a need for more refined theorizing.