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

1. The Sunshine Problem: Climate Change and Managed Decline in the European Union

Author:
Timur Ergen and Luuk Schmitz
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Decarbonization requires the winding down of – economically – fully viable, if not highly prosperous, lines of economic activity. Different from past episodes of industrial restructuring revolving around the managed decline of sunset industries, accelerating climate change requires reallocation away from economic activities where the metaphorical sun is still shining. Firms, owners, workers, regions, and polities structurally rely on these sources of prosperity and have interwoven their past and future lives with them. We argue that this problem has created a space for state actors to experiment with vertical industrial policies to manage the reallocation of resources from polluting to non-polluting activities. We illustrate this dynamic by investigating the least-likely case of the European Union, a polity heavily tilted towards market governance. European climate policymakers, we argue, have incrementally moved away from the primacy of regulatory, market-making tools and have introduced a plethora of vertical instruments to shift resources away from climate-harming fields. This experimentation with vertical policies unfolds against the backdrop of a thirtyyear institutional legacy of single market-oriented policy in the energy field.
Topic:
Climate Change, Industrial Policy, European Union, Social Cohesion, and Green Transition
Political Geography:
Europe

2. A Bitter Adjustment for German Family Capitalism: Succession and a Changing Ownership Transfer Regime

Author:
Isabell Stamm and Allan Sandham
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Germany is known for its family-owned businesses that transfer ownership across generations. However, business owners in Germany increasingly envision selling their business beyond the family, which fundamentally changes the institutionalized way private ownership of businesses is transferred. In this paper, we analyze and explain this fundamental change in German family capitalism since the 1990s. Drawing on a sociology of ownership, we view family succession as a transfer regime and show how this regime has been problematized and gradually reframed. Based on analysis of a rich corpus of documents, archival materials, and twenty-seven expert interviews, we show how a new transfer regime – the exit regime – emerges, which coordinates ownership transfer among founders through matchmaking. Our study contributes to research on family capitalism and succession by demonstrating how family capital moves toward the financial sector without becoming financial capital as it loses the family and gains the founder as personalized points of reference.
Topic:
Regime Change, Capitalism, Family, Succession, and Ownership
Political Geography:
Europe and Germany

3. What Growth Strategies Do Citizens Want? Evidence from a New Survey

Author:
Lucio Baccaro, Bjorn Bremer, and Erik Neimanns
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
While research on the economic characteristics of growth models across countries is now extensive, research on the politics of growth models is still in its infancy, even though governments routinely pursue different strategies to generate growth. In particular, we lack evidence on (1) whether citizens have coherent preferences towards growth strategies, (2) what growth strategies citizens prefer, and (3) what shapes their preferences. We address these questions through a new survey of public opinion in Germany, Italy, Sweden, and the United Kingdom, which exemplify different models. We find that preferences for growth strategies are consistent with other policy preferences and are meaningfully structured by class and retirement status, and to a lesser extent by sector of employment. At the same time, differences across class and sector are small, and a large majority of respondents across countries favor wage-led growth. This suggests there is a “representation gap,” since this particular growth strategy is in crisis everywhere.
Topic:
Public Opinion, Economic Growth, Representation, Macroeconomics, Comparative Capitalism, and Growth Models
Political Geography:
United Kingdom, Europe, Germany, Italy, and Sweden

4. Paradigm Shifts in Macrosociology

Author:
Renate Mayntz
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper looks at changes in macrosociological paradigms for social development that traditionally stretch from the primitive society through the stratified medieval society to the image of a functionally differentiated modern society. Changing the perspective from a systems theoretical view of societies to an actor perspective, I focus on populations of individual actors and organizations as collective actors. Over recent decades, important structural changes in the nature of populations and of organizations have taken place in the Western world. The most important relate to economic globalization and financial internationalization. An increasingly flexible population and narrowly goal-specific organizations produce a situation of societal instability that appears to characterize the present, though its causes reach back half a century.
Topic:
Development, Conflict, Integration, and Financial Globalization
Political Geography:
Global Focus

5. Turning No Tides: Union Effects on Partisan Preferences and the Working-Class Metamorphosis

Author:
Sinisa Hadziabdic
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Relying on panel data for Germany, Switzerland, the United Kingdom, and the United States, the paper examines the impact of union membership on partisan preferences. By leveraging panel data to control for time-invariant selection effects, we show that unions exert a small consistent left‑wing influence on the average wage earner who becomes affiliated, but they are no longer able to modify the preferences of working-class members. A longitudinal approach reveals that changes in partisan preferences can be linked to members’ preexisting predispositions and to the prevalent political views within unions. Unions mainly attract individuals who already share their political inclinations before joining. These preexisting left-wing convictions allow an additional left-wing shift to take place through a value congruence mechanism provoked by interactions with long-term union members who are even more left-wing oriented than the newcomers. Symmetrically, working-class joiners exhibit less pronounced left-wing inclinations before becoming affiliated, a gap that widens further after they join as a consequence of their unmet expectations.
Topic:
Politics, Class, Political Parties, Data, and Trade Unions
Political Geography:
Europe and North America

6. Top Wealth and Its Historical Origins: An Analysis of Germany’s Largest Privately Held Fortunes in 2019

Author:
Daria Tisch and Emma Ischinsky
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Rising wealth inequality is both a topic in recent policy discussion and in the social sciences. Despite the general interest in wealth concentration, we know only little about the largest privately held fortunes. To help fill this gap we analyze the historical origins of Germany’s 1,032 largest fortunes in 2019. In particular, we identify the share of entrenched fortunes – fortunes which date back to the beginning of the twentieth century – and ask to what extent they differ from more recently established ones. Furthermore, we examine in an exploratory way if entrenched fortunes are connected to fortunes with more recent origins through family lines. We use a journalistic rich list published by the manager magazin in 2019, which we link with both rich lists from 1912/1914 and Wikidata. We find that about eight percent of today’s fortunes can be traced back to fortunes held by the same families in 1913. Regression analyses show that entrenched fortunes rank on average higher on the rich list than the remaining ones. Descriptive network analyses indicate that some of today’s largest fortunes are intertwined through marital lines, hinting at social closure at the top. Our findings indicate that the accumulation and perpetuation of fortunes over many generations is an important feature of top wealth in Germany.
Topic:
Inequality, Family, Elites, Wealth, Inheritance, and Network Analysis
Political Geography:
Europe and Global Focus

7. From Media-Party Linkages to Ownership Concentration Causes of Cross-National Variation in Media Outlets’ Economic Positioning

Author:
Erik Neimanns and Nils Blossey
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
A sizable literature on media bias suggests that media coverage is frequently biased towards certain political and economic positions. However, we know little about what drives variation in political and ideological bias in news coverage across countries. In this paper, we argue that increasingly commercialized and concentrated media markets are likely to be associated with media coverage leaning more favorably towards economically more rightwing positions. Media bias should reflect the preferences of media owners and should be a result of a reduced diversity of news media content. In contrast, where media outlets continue to be oriented more closely along partisan lines, often referred to as political parallelism, bias on economic issues should be more likely to cancel out at the aggregate level. To test these claims, we combine expert survey data on partisan attachments of media outlets, party ideologies, and media ownership concentration for twenty-four European countries. Results from multilevel regression models support our theoretical expectations. With media framing potentially affecting individual-level preferences and perceptions, high and rising levels of media ownership concentration may help to explain why governments in the affluent Western democracies often do remarkably little to counter trends of rising income inequality.
Topic:
Politics, Media, News Analysis, and Bias
Political Geography:
Europe

8. Operationalizing Growth Models

Author:
Lucio Baccaro and Sinisa Hadziabdic
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
We present a new methodology for operationalizing growth models based on importadjusted demand components. Applying the methodology to the latest release of OECD Input-Output Tables, we calculate the growth contributions of consumption, investment, government expenditures, and exports for sixty-six countries in the periods 1995 to 2007 and 2009 to 2018 and identify the respective growth models. We find that most countries are export-led or domestic demand-led and that other forms of growth are rare. Our results corroborate previous classifications in comparative political economy but also differ from them in significant respects. Importantly, our classification improves on previous ones by covering not just the advanced capitalist economies but also Central and Eastern European and South-East Asian and Latin American countries. In a further step, we illustrate how the new indicators can be used to analyze the “drivers” of different types of growth. This examination reveals that there is a clear trade-off between consumption- and export-led growth in advanced Western economies in the period 1995 to 2007 and a dependence of export-led growth in these countries on real exchange rate devaluation in the same period, while export complexity is not a significant predictor of export-led growth.
Topic:
Political Economy, Economy, Economic Growth, Exports, and Emerging Economies
Political Geography:
Europe, Latin America, and Southeast Asia

9. Signaling Virtue or Vulnerability? The Changing Impact of Exchange Rate Regimes on Government Bond Yields

Author:
Zsófia Barta, Lucio Baccaro, and Alison Johnston
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Do exchange rate regimes affect the conditions under which developed countries borrow? This paper argues that they do, but their impact on yields depends on the prevailing macroeconomic context. When investors regard inflation as the most relevant risk to bond holdings, monetary union has a distinct advantage over floating and fixed exchange rates because of its credible in-built mechanism to control inflation. However, once default is seen as the most relevant risk, exchange rate rigidity becomes a liability due to its constraining effect on governments’ ability to respond to adverse shocks. We test our argument with a moving window panel analysis for twenty-three OECD countries from 1980 to 2017. We find that before the late 2000s, inflation was penalized under floating and (to a lesser extent) fixed exchange rate regimes, but not in countries in monetary union. Since the 2010s, inflation carries no penalty under any exchange rate regime. Variables linked to default risk (debt and entitlement spending) did not affect yields under any exchange rate arrangements until the mid-2000s. Afterwards, countries in monetary union (and to a lesser extent in fixed exchange rate regimes) were significantly penalized for public debt and entitlement spending, whereas countries with floating regimes were not. Our results speak to the literatures on governments’ institutional commitments and “room to move.”
Topic:
International Political Economy, Financial Markets, Bonds, Exchange Rates, and Euro
Political Geography:
Global Focus

10. Private Insurance, Public Welfare, and Financial Markets: Alpine and Maritime Countries in Comparative-Historical Perspective

Author:
Arjen van der Heide and Sebastian Kohl
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Contemporary capitalist societies use different institutions to manage economic risks. While different public welfare state and financial institutions (banks, capital markets) have been studied across coordinated and liberal market economies, this paper adds the private insurance sector to the study of countries’ security arrangements, following up on Michel Albert’s classical distinction between Alpine and Maritime insurance cultures. Building on extensive new insurance data collections (1880–2017) and institutional analysis, this paper corroborates the long-run historical existence of two worlds of private insurance. Maritime countries (USA, GBR, CAN) developed much bigger life and non-life insurance earlier, with no state-associated insurance enterprises and riskier investments steered towards financial markets. Alpine insurance (AUT, DEU, CHE), by contrast, was initially smaller, with strong state involvement, a significant reinsurance tradition and relatively heavy investments in mortgages and property, due to economic and financial backwardness. We argue that the larger and more “Maritime” the insurance sector, the more it made welfare states liberal and securities markets large. Insurance is thus a hidden factor for countries’ varieties of capitalism and world of welfare. The recent convergence on the Maritime model, however, implies that the riskier and risk-individualizing type of private insurance has added to privatization and securitization trends everywhere.
Topic:
History, Capitalism, Welfare, Insurance, and Financial Development
Political Geography:
Global Focus