As Timor-Leste heads towards it parliamentary elections on 7 July, it is increasingly likely that no single party will receive sufficient votes to hold an absolute majority in parliament in its own right. Despite claims by some parties’ leaders about the extent of their impending victory, none is likely in the manner in which it is being touted. As a result, the next government can be expected to be formed through an alliance or coalition of parties. While the terminology is not the determining factor, within Timor-Leste, it is commonly assumed that a ‘coalition’ is a political agreement reached between two or more parties prior to an election. An ‘alliance’, on the other hand, is understood to be where two or more parties enter into a partnership following an election. The term ‘alliance’ has particular resonance within Timor-Leste, reflecting Article 106.1 of the Constitution, which specifies that the President must appoint as the Prime Minister either the head of the party that receives the most votes or the head of an alliance of parties that are able to form a majority in parliament. The idea of a coalition has the immediate appeal of showing voters what sort of political deals their preferred party will make prior to them voting. There is a transparency in this that is not available to post-election deal-making that can form alliances. Coalitions also come to act more like a single party, if with internal factions, which is how most political parties operate in any case. The advantage of a coalition, tending towards being a larger single party, is that it creates a more stable political environment through consistency of ideological alignment and by helping to consolidate voting around larger blocs rather than a less coherent fracturing of smaller parties. More and smaller parties may represent specific political interests more accurately. But they also tend to become compromised by having to do deals with other parties in order to achieve a degree of political power. It is also a truism in democratic politics that while a two-party political system can narrow potential political options, it tends to offer voters a fairly clear either/or voting proposition, which in turn implies greater political stability. One need only look at the outcome of the 2012 elections in Greece to see the type of political impasse that can arise when there are a number of smaller parties that are deeply divided over key political issues. It is such chaotic political circumstances in the past that have led, in Weimar Germany in the 1930s, to an increase in presidential control over the political process, ending up with the suspension of civil liberties and the ascension of a dictator. Similarly, as a consequence of political incoherence in France in the 1950s, it changed its constitution to increase the powers of the president from being largely ceremonial to making the system semi-presidential, with extensive presidential powers for the first years of the transition. It is unlikely that Timor-Leste will fall into political chaos as a result of its numerous small parties, primarily because it is not facing a major crisis over which the parties do not agree. But the potential for political chaos does remain larger rather than smaller while numerous parties exist. The reason for Timor-Leste’s numerous small parties is its proportional representation political system. This ensures that voters do not feel disenfranchised by being forced to vote for one of a smaller number of larger parties they might not feel political sympathy for. But this system does encourage the existence of more and necessarily smaller parties than is otherwise politically ideal. The main driver for maintaining a proportional representation system is to ensure that local political control does not consolidate in the hands of local power holders, as is possible under a direct representation system. But the leaders of the smaller parties also have a much greater chance of being elected under a proportional model. This self-interest is also the main driver behind party leaders not wanting to enter into coalitions ahead of elections. Party leaders believe that if they commit prior to an election, their supporters may come to believe they are not voting for their favourite party but, in effect, from the major party in the coalition. There is an element of accuracy to this assumption. As part of a pre-arranged coalition, the party leaders would also lose their capacity to bargain for ministerial positions and other influence following an election. So they tend to want to wait and then, they hope, capitalise on their vote. However, being in a coalition means that the bargaining for post-election position takes place not on the basis of votes, but on the basis of agreement. In 2007, based on the first round presidential election results, the Democratic Party, for example, looked as though it would have a strong bargaining position after the parliamentary elections. However, its vote significantly declined in the parliamentary elections, along with some of its bargaining power. The real question in 2012 will be, however, not how well presidential representatives did in the first round of voting, but what deals can be offered by the larger parties as they try to bring together a majority of seats in the new parliament. The two, or possibly three, main parties will each have their own agenda which, depending on the final alignment of parties in parliament, will produce very different political outcomes for Timor-Leste. It may be, as some observers, think, that there will be few surprises arising from the parliamentary elections and that the shape of the next government is relatively predictable. However, numerous smaller parties and the potential for opportunism, shifting loyalties and political revenge, Timor-Leste’s political process may yet throw up a surprise outcome.