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1. Firm Foundations: The Statistical Footprint of Multinational Corporations as a Problem for Political Economy

Author:
Timur Ergen, Sebastian Kohl, and Benjamin Braun
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The discipline of comparative political economy (CPE) relies heavily on aggregate, country- level economic indicators. However, the practices of multinational corporations have increasingly undermined this approach to measurement. The problem of indicator drift is well-documented by a growing critical literature and calls for systematic methodological attention in CPE. We present the case for a rocky but ultimately rewarding middle road between indicator fatalism and indicator faith. We illustrate our argument by examining two important cases – Sweden’s recent export success and the financialization of non-financial corporations in France. A careful parsing of the data suggests corrections to common characterizations of the two cases. Swedish exports have been reshaped by intragroup trade among foreign subsidiaries of domestic corporations. The growth of financial assets held by French firms is attributable to the growth of foreign direct investment and to cumulative revaluation effects, while what remains of financialization is concentrated among the very largest firms. Based on these findings, we propose a methodological routine that parses data by zooming in on the qualitative specifics of countries, sectors, and firms, while using all available options for disaggregation.
Topic:
Political Economy, Economic Growth, Multinational Corporations, and Financialisation
Political Geography:
Europe, France, and Sweden

2. An Obituary for Austerity Narratives? An Experimental Analysis of Public Opinion Shifts and Class Dynamics during the Covid-19 Crisis

Author:
Emanuele Ferragina and Andrew Zola
Publication Date:
06-2020
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The Covid-19 pandemic is disrupting the international political economy context unlike any event since World War II. As a consequence, the French government has, at least momentarily, reversed decades of fiscal consolidation policies sedimented around austerity narratives by instating a costly emergency furlough scheme for a third of the workforce. This crisis provides a natural setting to investigate the relations among an emerging “critical juncture” in political economy, public preferences, and the salience of austerity narratives. We collected panel data and administered two experiments to test if citizens’ viewpoints are sensitive to the trade-off between health and economics, still receptive to austerity narratives, and conditioned by socioeconomic status in supporting them. We find public viewpoints were highly swayable between health and economic concerns at the first peak of the epidemic outbreak in April 2020, but they were not influenced by the austerity narratives during the phase-out of the lockdown in June, with the exception of the upper class. Overall, public support is shifting in favor of increased social spending, and austerity might no longer inhabit the majority’s “common sense.” We conclude with further implications for the study of class and conflict in a post-pandemic world.
Topic:
Economics, Political Economy, Public Opinion, Class, Macroeconomics, and Austerity
Political Geography:
Europe and France

3. The Ambiguous Consensus on Fiscal Rules: How Ideational Ambiguity Has Facilitated Social Democratic Parties’ Support of Structural Deficit Rules in the Eurozone

Author:
Andreas Eisl
Publication Date:
06-2020
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
In recent years, all eurozone member states have introduced national fiscal rules, which put limits on public deficits and debt. Fiscal rules reduce the fiscal policy discretion of politicians and affect their capacity to use public budgets for macroeconomic steering and redistribution. While such institutional discretion constraints run against the traditional policy preferences of social democratic parties, it is puzzling why they supported national fiscal rule reforms during the European debt crisis. This paper argues that the concept of structural deficit rules, central to reform efforts across the eurozone, allowed for the formation of an ambiguous consensus between center-right and center-left parties. While conservative and liberal parties are generally supportive of institutional discretion constraints, structural deficit rules – in contrast to nominal deficit rules – allowed social democratic and other left-wing parties to link such rules with their broader policy preferences of Keynesian countercyclical policymaking and the protection of tax revenues across the economic cycle to ensure the state’s capacity for redistribution. Drawing on three country case studies (Germany, Austria, France), this paper shows how the concept of structural deficit rules facilitated – at least discursively – the support for discretion-constraining institutions among social democratic and other left-wing parties. In theoretical terms, this study also advances research on the role of ambiguity in political decision-making, (re-)conceptualizing three forms of ambiguity underlying ambiguous consensus: textual ambiguity, institutional ambiguity, and ideational ambiguity
Topic:
Economics, Macroeconomics, Fiscal Policy, Eurozone, Political Parties, Public Debt, and Fiscal Deficit
Political Geography:
France, Germany, and Austria

4. Towards a Political Economy of Monetary Dependency: The Case of the CFA Franc in West Africa

Author:
Kai Koddenbrock and Ndongo Samba Sylla
Publication Date:
06-2019
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper focuses on the most neglected case of monetary dependency: the CFA franc. This currency arrangement was born in 1945, during the colonial era, but it still operates in the same ways more than 70 years later in fourteen countries in Africa, mostly former French colonies. Engaging with the seminal African scholarship by Joseph Pouemi on internal and external monetary repression and the emergent literature on “financial subordination,” we introduce the notion of the “chain of monetary dependency,” consisting of an external and an internal part. We argue that the CFA franc provides an extreme but paradigmatic example of this chain. The CFA franc is paradigmatic because of the very strong external repression of monetary and financial policy through US dollar and euro dependence. Internally, the CFA franc arrangement radicalizes the constraints imposed on all central bank policies and bank-firm relations in the Global South and makes it more difficult to pursue growth strategies geared towards the well-being of the broader population.
Topic:
Economics, International Political Economy, Monetary Policy, and Currency
Political Geography:
France

5. How to Make a Deal: The Role of Rankings and Personal Ties in Creating Trust in the M&A Market

Author:
Valérie Boussard, Olivier Godechot, and Nicolas Woloszko
Publication Date:
06-2016
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper examines the selection of intermediaries in the French mergers and acquisitions (M&A) market, which is an opaque environment. Buyers and sellers cope with uncertainty as to the value of exchanged assets. They thus rely on the help of experts in order to secure deals. But as the valuators might be prone to opportunism, firms need to find a way to trust them. We identify two trust devices: social ties and public rankings. We explore whether these personal and impersonal devices are substitutes, independent or complementary. We study the French M&A market through a mixed-method approach, with both an ethnographic study (76 interviews) and the statistical analysis of 694 M&A deals in France in 2010. We show that both previous contacts and league table rankings of firms contribute to trust and to dealmaking. These trust devices are all the more likely to be used if the deal is risky, especially within the sell side (more at risk). We also find that firms tend to make deals only with other firms at the same level in the league tables: high-status firms tend to make deals together. Finally, we find some evidence of substitution between rankings and personal ties, especially for low-value deals.
Topic:
Economics, International Political Economy, Macroeconomics, and Corporations
Political Geography:
France

6. A Relationship and a Practice: On the French Sociology of Credit

Author:
Laure Lacan and Jeanne Lazarus
Publication Date:
02-2015
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper aims to describe the social studies of credit developed in France over the past dozen years. We argue that this French sociology of credit, mostly centered on France, can be useful for researchers analyzing other countries, with other institutional particularities, because it proposes a specific method and a specific way to raise questions: credit is mostly understood as a result of social interactions embedded in organizational and legal structures. French researchers also deeply analyze the consequences of the organization of the credit market for inequalities, social stratification, and people’s life experiences. The first part of the paper focuses on works that have examined credit as a social test, looking at the institutional, technical, and social frameworks of money lending. Then, credit is understood as a sociological experiment: how is it integrated into household economies? How do people use forms of credit? Finally, the third part concentrates on credit failure, when a bank loan becomes a debt. This aspect is mostly framed in French sociology as “over-indebtedness,” which is an administrative and a social category. Throughout the paper, we address credit as both a relationship and a practice. This approach is heuristic, as we seek to demonstrate, because it enables us to show that credit is a social and political issue.
Topic:
Debt, Economics, Sociology, Inequality, and Credit
Political Geography:
Europe and France

7. Governance by Labels

Author:
Henri Bergeron, Patrick Castel, and Dubuisson-Quellier
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Many of today’s public policies aimed directly or indirectly at regulating the behaviors of individuals and organizations provide for the implementation of a certain type of instrument which can be qualified as a label. They share some features with what the literature tends to identify as proper standards (e.g., they aim at defining the best practices, they may represent – at least – a symbolic resource for those who adopt them), but they also have some peculiarities, which we will present here. In this paper, we propose to analyze the characteristics and dynamics underpinning this mode of governance as part of a study of two particular public policy domains chosen for their complementarity as well as their contrasts: the fight against obesity, and sustainable consumption. In both of these fields, labels have become a preferred mode of governance – and even, we might say, a kind of standard. Based on Foucault (2004), we emphasize the fact that the logics of distinction, which regulate utilities and sanctions in a particular social field, are instrumentalized by public policy as an incentive to the actors to deliberately take action whose value is endorsed by a label. Hence, the aim and outcome of this mode of governance are not the uniformity of a field, but the ongoing creation of increasingly demanding labels that only some of the participants can hope to obtain.
Topic:
Governance, Regulation, Public Policy, Public Health, and Consumption
Political Geography:
Europe and France