Search

Begin New Search Topic Economics Political Geography Europe

411. After the Crash: A Perspective on Multilevel European Democracy

Author:
Fritz W. Scharpf
Publication Date:
12-2014
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
At the end of the postwar period, the politically shaped configurations of normatively integrated European political economies differed greatly among “social-market” and “liberal market economies.” Such differences persist even though the characteristic achievements of social market economies have since eroded under the pressures of global capitalism and of European integration. Focusing on European integration from a social-market perspective, there is no question that it has widened the range of individual options. But it has also reduced the capacity of democratic politics to deal with the challenges of global capitalism, and it has contributed to rising social inequality and the erosion of public services and transfers. This paper will first summarize those asymmetries of European integration which have done the most to constrain democratic choices and to shift the balance between capital, labor, and the state by establishing an institutional priority of negative over positive integration and of monetary integration over political and social integration. It will then explain why efforts to democratize European politics will not be able to overcome these institutional asymmetries and why politically feasible reforms will not be able to remove the institutional constraints. The changes that would be required to restore democratic capacities to shape the political economy could only have a chance if present veto positions were to be fundamentally shaken. On the speculative assumption that the aftermath of a deep crisis might indeed create the window of opportunity for a political re-foundation of European integration, the concluding section will outline institutional ground rules that would facilitate democratic political action at both the European and national levels.
Topic:
Economics, Markets, Politics, Labor Issues, Democracy, and Capitalism
Political Geography:
Europe

412. No Exit from the Euro-rescuing Trap?

Author:
Fritz W. Scharpf
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper attempts a normative assessment of the input and output-oriented legitimacy of the present euro-rescuing regime on the basis of policy analyses examining the causes of present crises, the available policy options, and the impact of the policies actually chosen. Concluding that the regime lacks input-oriented legitimacy and that its claim to output-oriented legitimacy is ambivalent at best, the paper explores potential – majoritarian or unilateral – exits from the present institutional constellation that is characterized by the synthesis of a non-democratic expertocracy and an extremely asymmetric intergovernmental bargaining system.
Topic:
Economics, Politics, Financial Crisis, and Democracy
Political Geography:
Europe

413. Challenging Varieties of Capitalism's Account of Business Interests: The New Social Market Initiative and German Employers' Quest for Liberalization, 2000–2014

Author:
Daniel Kinderman
Publication Date:
11-2014
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Do employers in coordinated market economies (CME’s) actively defend the non-liberal, market-constraining institutions upon which their strategic coordination and competitive success depends? This paper revisits the debate over firms’ employer preferences with an in-depth examination of employers in Germany – a paradigmatic CME and crucial “test case” for Varieties of Capitalism. It is based on interviews with key officials and an in-depth examination of a large-scale campaign – the New Social Market Initiative or INMS – founded and funded by German metalworking employers to shape public opinion. The paper argues that German employers have a strong preference for liberalization: they have pushed hard for the liberalization of labor markets, the reduction of government expenditures, the expansion of market-oriented freedoms, and cuts to social protection, employment protection and benefit entitlements. I find no empirical support for the claim that the INSM is an attempt to appease discontented firms within employers’ associations. On the contrary: for many employers, the Agenda 2010 reforms did not go far enough. Following the discrediting of the Anglo-American model in the financial crisis, far-reaching concessions by employees, and the unexpected revitalization of the German economy, employers have moderated their demands – but liberalization remains their default preference. This paper also addresses the role of ideas and the conditions under which employer campaigns can influence policy.
Topic:
Economics, Markets, Labor Issues, and Capitalism
Political Geography:
Europe and Germany

414. Monetary Disunion: The Domestic Politics of Euroland

Author:
W. Streeck and L. Elsässer
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Regional disparities within the European Union have always been perceived as an impediment to monetary integration. This is why discussions on a joint currency, from their very beginning, were linked to compensatory payments in the form of regional policy payments. Structural assistance to poor regions and member states increased sharply at the end of the 1980s. Today, however, fiscal support has to be shared with the new member states in the East. Moreover, due to the financial crisis, the cheap credit that poor EMU member countries enjoyed as a result of interest rate convergence is no longer available. We predict that in the future, some sort of financial aid will have to be provided by rich member countries to poor ones, if only to prevent a further increase in economic disparities and related political instability. We also expect long-lasting distributional conflict between payer and recipient countries far beyond current rescue packages, together with disagreement on the extent of aid required and the political control to be conceded by receiving countries to giving countries. We illustrate the dimension of the distributional conflict by comparing income gaps and relative population size between the center and the periphery of Europe on the one hand and on the other, between rich and poor regions in two European nation-states characterized by large regional disparities, Germany and Italy. While income gaps and population structures are similar in the two countries to those between Northern Europe and the Mediterranean periphery, regional redistribution is much more extensive in the two nation-states. We conclude that this presages a difficult future for the domestic politics of Euroland.
Topic:
Economics, Politics, Financial Crisis, and European Union
Political Geography:
Europe

415. Europe Meets Asia: The Transnational Construction of Access and Voice from Below

Author:
Sabrina Zajak
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper contributes to the debate on the role of democratic participation in complex systems of governance. It takes a process-oriented constructivist approach asking how transnational activism over time contributes to the construction of access and voice from below and uses the Asia-Europe Meetings (ASEM) to analyze how interactions between civil society and global governance institutions shape concrete forms of participation. The paper shows that transnational activism triggers both discursive and institutional changes within the official ASEM process leading to an informal, fragmented, and fragile institutionalization of civil society participation. However, the paper reveals a division between civil society organizations with some, such as business representatives, having preferential access and voice in comparison to more contentious organizations. The paper explains this fragmented form of democratization as the result of three interrelated processes: the particular history and economic origins of the ASEM; international developments particularly in the ongoing economic crisis; and domestic developments within individual countries (in particular China) which have begun to favor controlled access for civil society participation.
Topic:
Civil Society, Democratization, Economics, History, Governance, and Developments
Political Geography:
Europe and Asia

416. International in Life, National in Death? Banking Nationalism on the Road to Banking Union

Author:
Martin Rhodes and Rachel A. Epstein
Publication Date:
12-2014
Content Type:
Working Paper
Institution:
The Kolleg-Forschergruppe (KFG)
Abstract:
European states have a long history of banking sector nationalism. Control over credit allocation is believed to contribute to economic development and competitiveness goals, insulation from external economic shocks, and control over monetary policy. This paper explains the potentially dramatic loss in domestic control over banks created by the European Banking Union (EBU). First, we argue that ongoing liberalization in the global and European economies has made banking sector protectionism both more costly and conflictual. Second, we contend that because many of the biggest banks have internationalized their operations, they now prefer centralized European regulation and supervision. Third, supporting a modified neofunctionalist argument, we find that behind the sometimes frenetic intergovernmental bargaining in 2012-14, it is primarily the European Commission and the European Central Bank that have pushed Banking Union ahead. Supranational institutions have argued, with some success, that they have unique capacity to solve collective action and prisoners' dilemma problems. Contrary to accepted wisdom, Germany has not set or limited the Banking Union agenda to a great extent, in part because of its own internal divisions. Moreover, the Commission and the ECB have managed at critical junctures to isolate Germany to secure the country's assent to controversial measures.
Topic:
Economics, Government, and Monetary Policy
Political Geography:
Europe and Germany

417. The Situation of Roma between Human Rights and Economics

Author:
Eben Friedman
Publication Date:
03-2014
Content Type:
Policy Brief
Institution:
European Centre for Minority Issues (ECMI)
Abstract:
If the dominant focus of documents on Roma published by intergovernmental organizations in the 1990s was on providing redress for past violations of human rights and protection fromfuture discrimination, this is no longer the case as of early 2014. Over the last decade, it has become increasingly common for calls to improve the situation of Roma to be justified in terms of economic benefits for society as a whole.
Topic:
Civil Society, Economics, Human Rights, Minorities, and Protected People
Political Geography:
Europe

418. Evaluating Asset-Market Effects of Unconventional Monetary Policy: A Cross-Country Comparison

Author:
John Rogers, Chiara Scotti, and Jonathan H. Wright
Publication Date:
03-2014
Content Type:
Commentary and Analysis
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper examines the effects of unconventional monetary policy by the Federal Reserve, Bank of England, European Central Bank and Bank of Japan on bond yields, stock prices and exchange rates. We use common methodologies for the four central banks, with daily and intradaily asset price data. We emphasize the use of intradaily data to identify the causal effect of monetary policy surprises. We find that these policies are effective in easing financial conditions when policy rates are stuck at the zero lower bound, apparently largely by reducing term premia.
Topic:
Economics, Monetary Policy, Exchange Rate Policy, and Banking
Political Geography:
Japan, Europe, Asia, and England

419. Forecasting Financial Stress and the Economic Sensitivity in CEE Countries

Author:
Grzegorz Poniatowski and Maciej Krzak
Publication Date:
07-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This paper presents forecasts for the Financial Stress Index (FSI) and the Economic Sensitivity Index (ESI) for the period 2015-2015 for six countries in the region, namely the Czech Republic, Estonia, Hungary, Latvia, Lithuania and Poland. It is a continuation of the endeavor to construct synthetic indices measuring financial stress and economic sensitivity for twelve Central and East European countries using the Principal Component Analysis. In order to obtain forecasts of the FSI, we estimated Vector Autoregression (VAR) models on monthly data for the period 2001-2012 separately for all the countries. Using quarterly historical values of ESI and FSI, we estimated Dynamic Panel Data Model for the complete sample of countries. Parameters of the model were later used for forecasting the ESI. Obtained results suggest that the FSI will start to rise in 2014 in the Czech Republic, Lithuania, and Estonia. For Latvia and Hungary, we observed a conversion in the trend, i.e. at the beginning of 2015, when the index should start to fall. According to our forecasts, the ESI will be rising in the next two years, except for Hungary, where we predict a continuous decrease in economic sensitivity.
Topic:
Economics, Financial Crisis, and Macroeconomics
Political Geography:
Europe, Central Asia, Caucasus, Eastern Europe, Poland, Lithuania, Estonia, Hungary, Latvia, and Czech Republic

420. Measuring financial stress and economic sensitivity in CEE countries

Author:
Grzegorz Poniatowski, Katarzyna Waşik, and Maciej Krzak
Publication Date:
01-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report presents the methodology for the construction of the Financial Stress Index (FSI) and the Economic Sensitivity Index (ESI) and investigates the economic situation in twelve Central and East European Countries (CEECs) between 2001 and 2012. The objective of this paper was to capture key features of financial and economic vulnerability and examine the co-movement of economic turmoil and financial disturbances that strongly affected the CEECs in the last decade. The main finding is that the FSI can be used as a leading indicator and can be used to recognize changing trends in the index. A shift in the value of the index proves that EU accession has a positive, but minor influence on financial stability in the CEECs. On the other hand, the impact of the introduction of the euro in Estonia, Slovakia and Slovenia is ambiguous. For most of the countries in our sample, the FSI started to grow rapidly in 2007, reaching its peak around the third quarter of 2008. Consequently, financial stress remained high for a few quarters and started to fall gradually. For a number of countries, we observe higher financial stress in the latest period of our analysis, i.e. 2010-2012. However, the value of the FSI was significantly lower than three years earlier. The results show that indices might be helpful in predicting future recessions. Consequently, the model will be expanded by adding a forecasting module, the launch of which is planned for April 2014.
Topic:
Economics, Finance, Macroeconomics, and Trade
Political Geography:
Europe and Eastern Europe