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The effects of political institutions during the crisis of 2007-2012

This study examines the impact of political institutions on policy responses during the 2007-2012 crisis. It highlights the role of actors, changes in institutions, and the need for analyzing conflicts and compromises between elites and socio-economic groups.

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The effects of political institutions during the crisis of 2007-2012

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  1. The effectsofpoliticalinstitutionsduringthecrisisof 2007-2012 Klaus Armingeon Institute of Political Science Universität Bern Hans Keman Symposium, 2013 09 27

  2. The puzzle • Our theories suggest that the policies and policy outcomes differ by political institutions. • The main argument: Institutions constrain political actors and create specific political opportunities. • One major example: Fritz W. Scharpf: Crisisand Choice in European Social Democracy. Ithaca, N.Y., Cornell University Press. • Duringthepresentcrisis, policyresponsesseemtobesimilarbetween countries. However, these countries differenormeouslywithregardtoinstitutions.

  3. The argument • (1) A cautious preliminary remark: In ten years we could see differences, which we cannot see today. • (2) The ‘constant structure and coefficient’ fallacy: We assume that institutions hardly change and that assignment to a specific institution (e.g. consociational democracy) has the same effect irrespective of time and circumstances. However, we observe considerable path-dependent changes of institutions and their socio-cultural foundations during the past 40 years. Their effects may vary. • (3) Actors may create, change, and ignore institutions – in particular in hard times. They have primacy over institutions – while we implicitly assumed a balance or even an institutional primacy in our various versions of the ‘actor-centered institutionalism’.

  4. Structure • A stylizeddescriptionofpolicies in thecurrentcrisis in maturedemocracies (OECD/EU). • Whatinstitutionaleffectswouldweexpect? • The constantstructureandcoefficientfallacy: Institutionalchange • Actorshaveprimacyoverinstitutions

  5. A stylized description of policy responses during the crisis • (1) Very different fiscal responses 2008-2010. • (2) Similar policies since 2010: Austerity programs (with the Japanese exception) and differences in implementation of austerity programs. • (3) Path-dependent policy development: Liberalization. Sound fiscal policy. No major new social policies.

  6. Whatdidweexpect? • Lesspolicyinnovation/expansive fiscalpolicy in federalist countries • More liberalization/austerity in • LMEs; • liberal welfarestates; • pluralistsystemsofcollectivelabourrelations • Lessradicalchanges in • consociationaldemocracies • systemswith strong constitutionalcourts/a particularemphasis on theruleofthelaw • The centralbankfocusses on pricestability, andavoidsany ‚active‘ monetarypolicy • None ofthishappened

  7. Constant structureandeffect? • Federalism • The declineoftheunitarystate • The declining power ofthe subnational politicalsystems (EU-integration) • Constitutional courtsandtheruleofthelaw • Art 267 Treaty oftheFunctioningofthe EU. Preliminaryrulingofthe Court ofJustice. The hiddencentralizationofthe legal system • Landmark rulings: e.g. Cassis de Dijon (1979) theprimacyof negative integration; Laval , Viking (2008), theprimacyoffreemarketsover national welfarestates

  8. Constant structureandeffect? • The changeofconsociationaldemocracy • Little changeofLijphart‘sindicators • The erosionofthesocio-culturalfoundationsoftheconsociationaldemocracy • The erosionofthesocio-economicfoundationsofthe Westminister democracy • Convergencetowardsfragmentedpoliticalsystemsandtheneedforpolicydevelopmentbynegotiation – whichis not necessarilybased on elitessocialised in theDutch/Swiss-way

  9. Constant structureandeffect?Welfarestates (left: expenditures, rightentitlements & benefits)

  10. Constant structureandeffect?Corporatismandcollectivelabourrelations

  11. Constant structureandeffect?Corporatismandcollectivelabourrelations

  12. Primacyofactorsoverinstitutions • Threestrategies • Stretching theboundaries: • Active: The redefinitionoftheStabilityand Growth Pact 2002/2003 • Passive: Federalismthatdid not impedeexpansionaryfiscalpolicy 2008-2010 (Australia, USA, Spain) • Ignoringtherules • The No-Bail-Out rule • An activistmonetarypolicy • Creatingnewrules. Six-pack. The hiddentransferunionwithoutdemocraticcontrol • Actorsshapetheinstitutionswhichtheywishtohave

  13. Conclusions • Ifthisiscorrect, whatshouldbedone? • (1) Shiftingtheemphasisfrominstitutionstoactors • (2) Shiftingtheemphasisfrom ‚worlds‘ to ‚processes‘ • More emphasis on theanalysisofconflictsandcompromisesbetweenelitesandbetweenpoliticallymobilisedsocio-economicandsocio-culturalgroups

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