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Begin New Search Publishing Institution Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo) Publication Year within 5 Years

21. Proportionality and Karlsruhe’s Ultra Vires Verdict: Ways Out of Constitutional Pluralism?

Author:
Martin Höpner
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
In May 2020, for the first time in its history, the Federal Constitutional Court (FCC) of Germany declared Union acts as being ultra vires. According to the FCC, the European Central Bank (ECB) and the Court of Justice of the European Union (CJEU) had acted beyond their mandates because they did not apply strong proportionality standards to the ECB’s Public Sector Purchase Programme (PSPP). The resulting stalemate within constitutional pluralism has revived the discussion about the possible introduction of an Appeal Court with the “final say” over constitutional conflict. As the analysis of the PSPP conflict shows, such a judicial authority would reach its limits the more we move from the surface to the core of the struggles between European and national constitutional law. The different readings of proportionality are difficult to bridge, and the mutually exclusive claims about the nature of the supremacy of European law are not accessible to compromise at all. We should therefore not expect too much from an Appeal Court, if it were introduced.
Topic:
Law, European Union, Constitution, Conflict, European Monetary Union, Court of Justice of the EU (CJEU), and Proportionality
Political Geography:
Europe

22. 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

23. 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

24. The Great Separation: Top Earner Segregation at Work in High-Income Countries

Author:
Olivier Godechot, Paula Apascaritei, István Boza, Lasse Folke Henriksen, and Are Skeie Hermansen
Publication Date:
06-2020
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Analyzing linked employer-employee panel administrative databases, we study the evolving isolation of higher earners from other employees in eleven countries: Canada, Czechia, Denmark, France, Germany, Hungary, Japan, Norway, Spain, South Korea, and Sweden. We find in almost all countries a growing workplace isolation of top earners and dramatically declining exposure of top earners to bottom earners. We compare these trends to segregation based on occupational class, education, age, gender, and nativity, finding that the rise in top earner isolation is much more dramatic and general across countries. We find that residential segregation is also growing, although more slowly than segregation at work, with top earners and bottom earners increasingly living in different distinct municipalities. While work and residential segregation are correlated, statistical modeling suggests that the primary causal effect is from work to residential segregation. These findings open up a future research program on the causes and consequences of top earner segregation.
Topic:
Economics, Political Economy, Labor Issues, Income Inequality, Class, and Labor Market
Political Geography:
Europe

25. Growth Models and the Footprint of Transnational Capital

Author:
Patrick Kaczmarczyk
Publication Date:
06-2020
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The definition of various growth models is the latest innovation of comparative capitalism (CC) research. Yet, the literature has its weaknesses in explaining the dynamics within and the interdependencies between different growth models. I argue that this weakness stems inter alia from an inadequate conceptualization of transnational corporations (TNCs). I provide empirical evidence on the footprint of international capital in the global economy and outline how including TNCs as a unit of analysis can help us to better understand economic outcomes. This leads to several implications for the growth models literature, which I conclude my argument with.
Topic:
Economics, International Political Economy, Global Political Economy, Economic Growth, Transnational Actors, Multinational Corporations, and Macroeconomics
Political Geography:
Global Focus

26. Primary Dealer Systems in the European Union

Author:
Jenny Preunkert
Publication Date:
06-2020
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
States require money to function and therefore every government has to continuously raise new funds. On the financial markets, governments cannot be sure that auctions of their debt will be sufficiently attractive to financial investors, which is why governments usually enter into cooperative agreements with selected banks. The best known and most widespread form of cooperation is the primary dealer system. Primary dealers are banks that agree to participate regularly in government debt auctions and to act as formalized market makers on government debt markets. The article analyzes European primary dealer systems and asks why banks are willing to participate in these systems. I will show that both domestic and foreign banks use their status as primary dealers to build long-term relationships with one or more European governments and to gain an advantage on the global stage. In Bourdieu’s terms, primary dealer banks use their financial capital to accumulate social and symbolic capital.
Topic:
Debt, Economics, International Political Economy, International Trade and Finance, Financial Markets, Banks, and Macroeconomics
Political Geography:
Europe and European Union

27. Resilience or Relocation? Expectations and Reality in the City of London since the Brexit Referendum

Author:
Manolis Kalaitzake
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The fate of British finance following the Brexit referendum revolves around the “resilience or relocation” debate: will the City of London continue to thrive as the world’s leading financial centre, or will the bulk of its activity move to rival hubs after departure from EU trading arrangements? Despite extensive commentary, there remains no systematic analysis of this question since the Leave vote. This paper addresses that lacuna by evaluating the empirical evidence concerning jobs, investments, and share of key trading markets (between June 2016 and May 2020). Contrary to widely held expectations, the evidence suggests that the City has been remarkably resilient. Brexit has had no significant impact on jobs and London has consolidated its position as the chief location for financial FDI, FinTech funding, and attracting new firms. Most unexpectedly, the City has increased its dominance in major infrastructure markets such as (euro-denominated) clearing, derivatives, and foreign exchange – although it has lost out in the handling of European repurchase agreements. Based upon this evidence, the paper argues that the UK’s negotiating position is stronger than typically recognised, and outlines the competitive ramifications for both the UK and EU financial sector.
Topic:
European Union, Brexit, Resilience, Financial Services, and Relocation
Political Geography:
United Kingdom, Europe, and London

28. From Industrial Citizenship to Private Ordering? Contract, Status, and the Question of Consent

Author:
Ruth Dukes and Wolfgang Streeck
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper revisits the notions of contract and status found in classical sociology, legal theory, and labour law. Adopting an historical perspective, it explores the fragmentation of the status of industrial citizenship during the neoliberal period and discusses the enduring usefulness of the status/contract distinction in analyzing current trends in the regulation of working relations, including the spread of “gig” or platform-mediated work. Elements of status, it is argued, must always be present if work is to be performed and paid for as the parties require it. Claims to the contrary – for example, that the gig economy creates a labour market without search frictions and only minimal transaction costs: contracts without status – assume an undersocialized model of (monadic) social action that has no basis in the reality of social life (Durkheim, Weber). Still, status may come in a variety of forms that are more or less desirable from the perspective of workers, businesses, and society at large. The paper traces what it conceives as the privatization of status via contracts between employers and workers under the pressure of marketization and dominated by corporate hierarchies. Towards the end of the twentieth century, sociologists observed the division of workers into two groups or classes – core (with relatively well-paid and secure employment) and peripheral (low-paid and insecure). Thirty years later, gross inequalities of wealth and conceptions of the neoliberal self as ever-improving, everperfectible, are combining to create novel forms of status not fully anticipated by the literature.
Topic:
Democracy, Entrepreneurship, Citizenship, Economy, Industry, Contracts, Precarity, and Corporatism
Political Geography:
Global Focus

29. The Political Economy of Industrial Policy in the European Union

Author:
Fabio Bulfone
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The Great Recession renewed calls for a return of state activism in support of the European economy. The widespread nationalization of ailing companies and the growing activism of national development banks led many to celebrate the reappearance of industrial policy. By reviewing the evolution of the goals, protagonists, and policy instruments of industrial policy since the postwar period, this paper shows how state intervention never ceased to be a crucial engine of growth across the EU. It argues that the decline of the Fordist wage-led production regime marked a turning point in the political economy of industrial policy with the transition from inward-looking to open-market forms of state intervention. The main features of open-market industrial policy are then discussed referring to the cases of the internationalization of national champions in public service sectors and the proliferation across the EU of industrial clusters. Finally, the paper reviews postcrisis instances of state intervention and highlights how, rather than breaking with past tendencies, the Great Recession further accelerated the shift towards open-market industrial policy.
Topic:
Development, Industrial Policy, European Union, Capitalism, Regional Integration, and Banks
Political Geography:
Europe and Germany

30. Scaling Up Alternatives to Capitalism: A Social Movement Approach to Alternative Organizing (in) the Economy

Author:
Simone Schiller-Merkens
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
In these times of crises, capitalism and the far-reaching marketization of our societies has again become a subject of contestation and critique. Alternative organizing is one response to the critique of capitalism. As an embodied and constructive form of critique it takes place in prefigurative organizations and communities on the ground that experiment with alternative forms of organizing economic exchanges and lives. These prefigurative initiatives are seen as central actors in a social transformation toward an alternative economy. However, they oftentimes remain autonomous and disconnected, questioning their potential to contribute to a broader social change. This paper sets out to explore how and when alternative organizing as practiced in communities and organizations can scale upwards to lead to a more profound social transformation of our societies. Building on insights from scholarship on social movement outcomes, I discuss the collective actions, contextual conditions, and social mechanisms that are likely to allow an upward scale shift of alternative organizing.
Topic:
Economics, Social Movement, Capitalism, Marketization, Policy Diffusion, Post-Capitalism, and Prefiguration
Political Geography:
Global Focus