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

11. The Rise and Fall of Social Housing? Housing Decommodification in Long-Run Perspective

Author:
Konstantin A. Kholodilin, Sebastian Kohl, and Sarah Hellmüller
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The comparative study of housing decommodification lags behind classical welfare state research, while housing research itself is rich in homeownership studies but lacks comparative accounts of private and social rentals due to missing comparative data. Building on existing works and various primary sources, this study presents a new collection of up to forty-eight countries’ social housing shares in stock and new construction since the first housing laws around 1900. The interpolated benchmark time series generally describe the rise and fall of social housing across a residual, a socialist, and a Northern-European housing group. The decline was steeper than for the classical welfare state, but the degree of erosion was surprisingly small in some countries where public housing associations remained resilient. Within the broader housing welfare state, social housing correlates positively with rent regulation and allowances, but negatively with homeownership subsidies and liberal mortgage regulation. A multivariate analysis shows that social housing is rather explained by housing shortages and complementarities with rental and welfare policies than by typical welfare state theories (GDP, political parties). Generally, the paper shows that conventional housing typologies are difficult to defend over time and argues more generally for including housing decommodification in welfare state research.
Topic:
Public Policy, Housing, and Welfare State
Political Geography:
Europe and Global Focus

12. No Strings Attached: Corporate Welfare, State Intervention, and the Issue of Conditionality

Author:
Fabio Bulfone, Timur Ergen, and Manolis Kalaitzake
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper contributes to Comparative Political Economy (CPE), developing an analytical concept of corporate welfare. Corporate welfare — the transfer of public funds and benefits to corporate actors with weak or no conditionality — is a prominent form of state-business relations that CPE scholarship regularly overlooks and misinterprets. Such transfers should be understood as a structural privilege of business in a globalized post-Fordist capitalism, and an increasingly common strategy through which states attempt to steward national economic dynamism within a highly constrained range of policy options. However, without a well-developed concept of corporate welfare – premised upon the key criterion of conditionality – studies that identify a “return” of the state in industrial planning misrepresent these transfers to business as a reassertion of state influence and control, rather than a reflection of state weakness and subordination. The paper provides the analytical building blocks to properly conceptualize transfers to business, works out the core challenges for empirical research, and provides empirical illustrations of this burgeoning phenomenon from the fields of unconventional monetary policy, privatization, and urban political economy.
Topic:
Industrial Policy, Political Economy, Privatization, Monetary Policy, and Subsidies
Political Geography:
Global Focus

13. The Instability of Preferences: Uncertain Futures and the Incommensurable and Intersubjective Nature of Value(s)

Author:
Richard Bronk and Jens Beckert
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The default assumption of standard economics is to treat preferences as exogenously ‘given’, consistent with one another, ‘revealed’ by past choices, and context independent. There has been increased interest recently (within behavioural economics) in the impact of inconsistent or irrational preferences and (more broadly) in dynamic and endogenous preferences. This paper builds on these challenges to standard assumptions by analysing the pivotal role of three aspects of preference formation in explaining capitalist dynamics and market instability. These are the constant creation of new preferences and the indeterminacy of choice sets in the context of widespread product innovation; the moral indeterminacy implied by conflicting and incommensurable social norms attaching to market goods where there is no single scale of value and hence no unique set of rational trade-offs; and, lastly, the contingent social and market construction of the product differentiation, quality attribution, and value assessments central to preference formation. The paper concludes by considering implications for economics as a discipline.
Topic:
Economics, Values, Endogenous Factors, and Preference Formation
Political Geography:
Global Focus

14. The Political Economy of Law Enforcement

Author:
Matías Dewey, Cornelia Woll, and Lucas Ronconi
Publication Date:
01-2021
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The legal order is the legitimate foundation of liberal democracy. Its incomplete enforcement of the law can therefore appear dysfunctional, reflecting weak institutions, state capture, and corrupt practices. This paper casts doubt on such categorical assessments by systematically examining the reasons for and intentions behind incomplete enforcement. It argues that law enforcement is part of the political process that is deeply affected by the constellation of actors concerned. Choices over law enforcement produce social order that is analytically distinct from the production of legal norms and their formal implementation. By analyzing different types of partial enforcement, its rationales, and intended effects, we propose an approach that studies law enforcement as an integral part of public policy analysis and of the study of socioeconomic orders.
Topic:
Economics, International Political Economy, Law Enforcement, Law, Police, and Legal Sector
Political Geography:
Europe and Global Focus

15. Gauging the Gravity of the Situation: The Use and Abuse of Expertise in Estimating the Economic Costs of Brexit

Author:
Christoph Semken and Colin Hay
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
HM Treasury’s estimation of the economic consequences of Brexit – using standard macroeconomic models – during the EU referendum campaign represents a remarkable intervention in a highly politicized public debate. It raises a series of questions about the use of economic expertise. Through a detailed theoretical and empirical critique of the Treasury’s methodology – and a reassessment of the likely effects of Brexit in light of this – we cast doubt on the utility of their approach, highlighting methodological issues, unrealistic assumptions, and misrepresentations of established facts. In the process we seek to identify some of the wider implications for the use and potential abuse of economic expertise in highly charged political contexts, such as the EU referendum debate.
Topic:
European Union, Economy, Brexit, and Methodology
Political Geography:
Britain and Europe

16. Ups and Downs in Finance, Ups without Downs in Inequality

Author:
Olivier Godechot, Nils Neumann, Paula Apascaritei, István Boza, and Martin Hällsten
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The upswing in finance over the past several decades has led to rising inequality, but do downswings in finance lead to a symmetric decline in inequality? In this paper, we analyze the asymmetry of the effect of ups and downs in financial markets, as well as the effect of increased capital requirements and the bonus cap on national earnings inequality. We use administrative employer–employee linked data on earnings from 1990 to 2017 for twelve countries. Additionally, we use data on earnings from bank reports, from 2009 to 2017 in thirteen European countries. We find a strong asymmetry in the effects of financial ups and downs on earnings inequality, a mitigating effect of rising capital requirements on the contribution of finance to inequality, and a restructuring effect of the bonus cap for the earnings of financiers, while neither policy affects absolute levels of earnings inequality.
Topic:
Financial Crisis, Regulation, Inequality, and Finance
Political Geography:
Europe

17. The Organizational Roots of Market Design Failure: Structural Abstraction, the Limits of Hierarchy, and the California Energy Crisis of 2000/01

Author:
Georg Rilinger
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Economic sociologists have rarely studied organizational reasons why market design processes fail. Drawing on the organizational literature on mistakes and accidents, the paper identifies such reasons for a fatal design decision during the creation of California’s first electricity markets. Designers proposed weak oversight structures even though their models called for active and permanent regulatory control. Sellers like Enron could therefore manipulate the market without fear of detection, prolonging the western energy crisis. A process of “structural abstraction” explains this mistake. Designers were split into three groups that worked in different divisions and relied on local frames to understand the oversight requirements. Each group missed information the others were aware of and arrived at the conclusion that minimal oversight would suffice. Higher levels of the hierarchy should have discovered and resolved these discrepancies. However, these levels considered the issue at a higher level of abstraction. Such structural abstraction made room for ambiguities that obscured the local disagreements.
Topic:
Economics, Markets, Sociology, Hierarchy, and Energy Crisis
Political Geography:
California, North America, and United States of America

18. 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

19. The Constrained Politics of Local Public Investments under Cooperative Federalism

Author:
Bjorn Bremer, Donato Di Carlo, and Leon Wansleben
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Public investment spending declined steadily in advanced economies during the last three decades. Germany is a case in point where the aggregate decline coincided with growing inequality in investments across districts. What explains variation in local investment spending? We assembled a novel dataset to investigate the effects of structural constraints and partisanship on German districts’ investment spending from 1995 to 2018. We find that the lack of fiscal and administrative capacity significantly influences local investment patterns. Yet, within these constraints, partisanship matters. Conservative politicians tend to prioritize public investment more than the left. This is especially the case when revenues from local taxes are low. As the fiscal conditions improve, left-wing politicians increase investment more strongly and hence the difference between the left and the right disappears. Our findings are indicative of how regional economic divergence can emerge even within cooperative federalist systems and show that, despite rigid fiscal rules, partisanship matters when parties face trade-offs over discretionary spending.
Topic:
Politics, Fiscal Policy, Federalism, and Public Investment
Political Geography:
Europe and Germany

20. Determinants of Wage (Dis-)Satisfaction: Trade Exposure, Export-Led Growth, and the Irrelevance of Bargaining Structure

Author:
Lucio Baccaro and Erik Neimanns
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Although the determinants of wage militancy and moderation have been studied extensively by comparative political economists, so far the literature has focused on the macro level of analysis. As a result, there has been no attempt to analyze the determinants of individual-level attitudes towards wages. Based on two waves of the International Social Survey Programme, in this paper we fill this gap. We examine to what extent workers internalize the imperatives of competitiveness, and whether wage bargaining institutions facilitate this internalization, as suggested by a large literature on neocorporatism. Surprisingly, we find that the structure of wage bargaining (more or less coordinated or centralized) has no relationship with wage satisfaction or dissatisfaction at the individual level. Instead, wage dissatisfaction decreases strongly when workers are individually exposed to trade and countries rely heavily on export-led growth. Our results point to the need to rethink the determinants of wage moderation.
Topic:
Exports, Trade, Collective Bargaining, and Wages
Political Geography:
Global Focus