Coalition theory is central to our understanding of the nexus between party system development, party government composition and the relationship between the executive and legislature. I argue that government formation is crucial for understanding the life cycle of party government. I consider the relations between parties in parliament and parties in government as principal-agent relations, signifying the indirect character of representative governance. The study of (coalition) government should not be a one-shot game and not be conducted without taking into account its contextual variation or the time dimension: the coalition praxis to form a new government is not only a post-electoral 'game' conducted within parliament and government between parties, but also a serious exercise by parties to translate policy preferences into a viable agreement that honours, by and large, the voters' choices. The comparative analysis of 17 established parliamentary democracies after 1990 serves to illustrate these points. © The Author(s) 2011.