Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-28T02:42:12.896Z Has data issue: false hasContentIssue false
  • English
  • Français

The Political Geography of the Eurocrisis

Published online by Cambridge University Press:  09 September 2020

Pablo Beramendi  and
Daniel Stegmueller
Get access

Abstract

The European Union provided a mixed response to the 2008 financial crisis. On the one hand, it refused to pursue fiscal integration through a common budget; on the other, it introduced significant transfers between countries that were designed to produce financial stabilization. The authors analyze this response as the outcome of democratic constraints on EU leaders. Given the EU’s current institutional structure, citizens’ preferences pose a binding constraint on what leaders can do as these preferences limit the scope of risk-pooling among members and the degree of political tolerance for different courses of action. The authors show that citizens’ preferences reflect differences in the geography of income, production regimes, and institutional organization. The heterogeneity of constituencies’ redistribution preferences combined with a diverse economic geography helps to explain why political constraints on national governments prevent them from engaging in further fiscal integration. By contrast, externalities among member states shift the preferences of citizens who may experience negative effects and make international redistribution politically feasible. The authors analyze these two mechanisms and present novel empirical results on the determinants of preferences for fiscal integration and international redistribution in the aftermath of the eurocrisis.

Keywords

eurozone crisispolitical integrationpreferencesredistribution
Type
Research Article
Information
World Politics , Volume 72 , Issue 4 , October 2020 , pp. 639 - 678
Copyright
Copyright © Trustees of Princeton University 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, Daron, Philippe, Aghion, and Zilibotti, Fabrizio. 2006. “Distance to Frontier, Selection, and Economic Growth.” Journal of the European Economic Association 4, no. 1: 37–74. doi: 10.1162/jeea.2006.4.1.37.CrossRefGoogle Scholar
Aghion, Philippe, and Howitt, Peter. 2006. “Appropriate Growth Policy: A Unifying Framework.” Journal of the European Economic Association 4, no. 2-3: 269314. doi: 10.1162/jeea.2006.4.2-3.269.CrossRefGoogle Scholar
Alesina, Alberto, and Perotti, Roberto. 1998. “Economic Risk and Political Risk in Fiscal Unions.” EconomicJournal108, no. 449: 989–1008. doi: 10.1111/1468-0297.00326.Google Scholar
Melinda, Altamirano, Rueda, David, and Wibbels, Erik. 2015. “The Origins of Dualism.” In Pablo, Beramendi, Silja, Hausermann, Herbert, Kitschelt, and Kriesi, Hanspeter, eds., The Politics of Advanced Capitalism. Cambridge, UK: Cambridge University Press. doi: 10.1017/CBO9781316163245.004.Google Scholar
Atkinson, Anthony Barnes. 1995. Incomes and the Welfare State: Essays on Britain and Europe. Cambridge, UK: Cambridge University Press.Google Scholar
Bechtel, Michael M., Jens, Hainmueller, and Margalit, Yotam. 2014. “Preferences for International Redistribution: The Divide over the Eurozone Bailouts.” American Journal of Political Science 58, no. 4: 835–56. doi: 10.1111/ajps.12079.CrossRefGoogle Scholar
Bellucci, Paolo, Marina Costa, Lobo, and Lewis-Beck, Michael S., eds. 2012. “Economic Crisis and Elections: The European Periphery.” Special Symposium. Electoral Studies 31, no. 3: 469–71. doi: 10.1016/j.electstud.2012.02.009.CrossRefGoogle Scholar
Beramendi, Pablo. 2012. The Political Geography of Inequality: Regions and Redistribution. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Beramendi, Pablo, Silja, Hausermann, Herbert, Kitschelt, and Kriesi, Hanspeter, 2015. “Introduction.” In Pablo, Beramendi, Silja, Hausermann, Herbert, Kitschelt, and Kriesi, Hanspeter, eds., The Politics of Advanced Capitalism. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Beramendi, Pablo, and Stegmueller, Daniel. 2020a. “Replication files for The Political Geography of the Eurocrisis.” Harvard Dataverse, V1. doi: 10.7910 /DVN/P5HVGW.CrossRefGoogle Scholar
Beramendi, Pablo, and Stegmueller, Daniel. 2020b. “Supplementary material for The Political Geography ofthe Eurocrisis.” doi: 10.1017/S0043887/120000118.CrossRefGoogle Scholar
Besley, Timothy, and Persson, Torsten. 2011. Pillars of Prosperity: The Political Economics of Development Clusters. Princeton, N.J.: Princeton University Press.Google Scholar
Blyth, Mark. 2013. Austerity: The History of a Dangerous Idea. Oxford, UK: Oxford University Press.Google Scholar
Bolton, Patrick, and Roland, Gerard. 1996. “Distributional Conflicts, Factor Mobility, and Political Integration.” American Economic Review 86, no. 2: 99–104. At https://www.jstor.org/stable/2118104, accessed July 21, 2020.Google Scholar
Bordo, Michael D., Lars, Jonung, and Markiewicz, Agnieszka. 2013. “A Fiscal Union for the Euro: Some Lessons from History.” CESifo Economic Studies 59, no. 3: 449–88. doi: 10.1093/cesifo/ift001.CrossRefGoogle Scholar
Bosco, Anna, and Susannah, Verney, eds. 2012. “Electoral Epidemic: The Political Cost of Economic Crisis in Southern Europe, 2010-11.” Special Issue. South European Society and Politics 17, no. 2, 129–54. doi: 10.1080/13608746.2012.747272.CrossRefGoogle Scholar
Bowers, Jake, and Drake, Katherine W.. 2005. “EDA for HLM: Visualization When Probabilistic Inference Fails.” Political Analysis 13, no. 4: 301–26. doi: 10.1093 /pan/mpi031.CrossRefGoogle Scholar
Cai, Hongbin, and Treisman, Daniel. 2005. “Does Competition for Capital Discipline Governments? Decentralization, Globalization, and Public Policy.” American Economic Review 95, no. 3: 817–30. doi: 10.1257/0002828054201 314.CrossRefGoogle Scholar
Alessandra, Casella. 2005. “Redistribution Policy: A European Model.” Journal of Public Economics 89, no. 7: 1305–31. doi: 10.1016/j.jpubeco.2003.09.008.Google Scholar
Lars-Erik, Cederman, Gleditsch, Kristian Skrede, and Buhaug, Halvard. 2013. Inequality, Grievances, and Civil War. Cambridge, UK: Cambridge University Press.Google Scholar
Cleveland, William S. 1993. VisualizingData. Summit, N.J.: Hobart.Google Scholar
Cremer, Jacques, and Palfrey, Thomas R.. 1999. “Political Confederation.” American Political Science Review 93, no. 1: 69–83. doi: 10.2307/2585761.CrossRefGoogle Scholar
Paul, De Grauwe. 2012. “The Governance of a Fragile Eurozone.” Australian Economic Review 45, no. 3: 255–68. doi: 10.1111/j.1467-8462.2012.00691.x.Google Scholar
Paul, De Grauwe. 2013. “The Political Economy of the Euro.” Annual Review of Political Science 16: 153–70. doi: 10.1146/annurev-polisci-060911-085923.Google Scholar
Paul, De Grauwe. 2014. Economics of Monetary Union. Oxford, UK: Oxford University Press.Google Scholar
de Vries, Catherine E. 2018. Euroscepticism and the Future of European Integration. Oxford, UK: Oxford University Press.CrossRefGoogle Scholar
Dixit, Avinash K. 1998. The Making of Economic Policy: A Transaction-Cost PoliticsPerspective. Cambridge, Mass.: MIT Press.Google Scholar
Allan, Drazen. 2000. Political Economy in Macroeconomics. Princeton, N.J.: Princeton University Press.Google Scholar
Eichengreen, Barry, Jeffry, Frieden, and Von Hagen, Jurgen. 1995. Monetary and Fiscal Policy in an Integrated Europe. Berlin, Germany: Springer.CrossRefGoogle Scholar
Enderlein, Henrik, Peter, Bofinger, Jean-Claude, Piris, Paul De, Grauwe, Maria João, Rodrigues, Jean Pisani-Ferry, Andres Sapir, and Vitorino, Antonio. 2012. Completing the Euro: A Road Map towards Fiscal Union in Europe. Paris, France: Jacques Delors Institute.Google Scholar
Esping-Andersen, Gosta. 2002. Why We Need a New Welfare State. Oxford, UK: Oxford University Press.CrossRefGoogle Scholar
Fernández-Villaverde, Jesus, Luis, Garicano, and Santos, Tano. 2013. “Political Credit Cycles: The Case of the Eurozone.” Journal of Economic Perspectives 27, no. 3: 145–66. doi: 10.1257/jep.27.3.145.CrossRefGoogle Scholar
Frieden, Jeffry, and Walter, Stefanie. 2017. “Understanding the Political Economy of the Eurozone Crisis.” Annual Review of Political Science 20: 371–90. doi: 10. 1146/annurev-polisci-051215-023101.CrossRefGoogle Scholar
Fujita, Masahisa, Paul, Krugman, and Venables, Anthony J.. 2001. The Spatial Economy: Cities, Regions, and International Trade. Cambridge, Mass.: MIT Press.Google Scholar
Gancia, Gino, Ponzetto, Giacomo A. M., and Ventura, Jaume. 2016. “Globalization and Political Structure.” NBER Working Paper no. 22046. Cambridge, Mass.: National Bureau of Economic Research. doi: 10.3386/w22046.Google Scholar
Gelman, Andrew, and Hill, Jennifer. 2007. Data Analysis Using Regression and Multilevel/Hierarchical Models. Cambridge, UK: Cambridge University Press.Google Scholar
Gill, Jeff. 2001. “Whose Variance Is It Anyway? Interpreting Empirical Models with State-Level Data.” State Politics & Policy Quarterly 1, no. 3: 318–38. doi: 10.1177/153244000100100305.CrossRefGoogle Scholar
Jeff, Gill. 2014. Bayesian Methods: A Social and Behavioral Sciences Approach, 3rd ed. Hoboken, N.J.: CRC Press.CrossRefGoogle Scholar
Grossman Gene, M., and Helpman, Elhanan. 1994. “Protection for Sale.” American Economic Review 84, no. 4: 833–50. At https://www.jstor.org/stable/2118033, accessed July 21, 2020.Google Scholar
Guiso, Luigi, Helios, Herrera, Massimo, Morelli, and Sonno, Tommaso. 2019. “Global Crises and Populism: The Role of Eurozone Institutions.” Economic Policy 34, no. 97: 95–139. doi: 10.1093/epolic/eiy018.CrossRefGoogle Scholar
Hale, Galina, and Obstfeld, Maurice. 2014. “The Euro and the Geography of International Debt Flows.” NBER Working Paper no. 20033. Cambridge, Mass.: National Bureau of Economic Research. doi: 10.3386/w20033.Google Scholar
Hall, Peter A. 2012. “The Economics and Politics of the Euro Crisis.” German Politics 21, no. 4: 355–71. doi: 10.1080/09644008.2012.739614.CrossRefGoogle Scholar
Hall, Peter A. 2014. “Varieties of Capitalism and the Euro Crisis.” West European Politics 37, no. 6: 1223–43. doi: 10.1080/01402382.2014.929352.CrossRefGoogle Scholar
Hernandez, Enrique, and Kriesi, Hanspeter. 2016. “The Electoral Consequences of the Financial and Economic Crisis in Europe.” European Journal of Political Research 55, no. 2: 203–44. doi: 10.1111/1475-6765.12122.CrossRefGoogle Scholar
Hix, Simon, and Hyland, Bjrn. 2011. The Political System of the European Union. New York, N.Y.: Palgrave Macmillan.CrossRefGoogle Scholar
Hobolt, Sarah, and de Vries, Catherine E.. 2016. “Public Support for European Integration.” Annual Review of Political Science 19: 413–432. doi: 10.1146/annu rev-polisci-042214-044157.CrossRefGoogle Scholar
Hobolt, Sarah, and Tilley, James. 2015. “Fleeing the Centre: The Rise of Challenger Parties in the Aftermath of the Euro Crisis.” Paper prepared for the European Election Studies Conference, Mannheimer Zentrum fur Europaische Sozialforschung, University of Mannheim, November 6-8.Google Scholar
Hooghe, Liesbet, and Marks, Gary. 2001. Multi-Level Governance and European Integration. Lanham, Md.: Rowman & Littlefield.Google Scholar
Hooghe, Liesbet, and Marks, Gary. 2009. “A Postfunctionalist Theory of European Integration: From Permissive Consensus to Constraining Dissensus.” British Journal of Political Science 39, no. 1: 1–23. doi: 10.1017/S0007123408000409.CrossRefGoogle Scholar
Hoover, Edgar M. 1948. The Location of Economic Activity. New York, N.Y.: McGraw-Hill.Google Scholar
Chen, Hsiao. 2003. Analysis of Panel Data. Cambridge, UK: Cambridge University Press.Google Scholar
Iversen, Torben, and Soskice, David. 2001. “An Asset Theory of Social Policy Preferences.” American Political Science Review 95, no. 4: 875–93. doi: 10.1017 /S0003055400400079.CrossRefGoogle Scholar
Iversen, Torben, and Soskice, David. 2013. “A Structural-Institutional Explanation of the Eurozone Crisis.” Manuscript. Harvard University.Google Scholar
Iversen, Torben, and Soskice, David. 2019. Democracy and Prosperity: Reinventing Capitalism through a Turbulent Century. Princeton, N.J.: Princeton University Press.Google Scholar
Simon, Jackman. 2009. Bayesian Analysis for the Social Sciences. New York, N.Y.: Wiley.Google Scholar
Jackman, Simon, and Western, Bruce. 1994. “Bayesian Inference for Comparative Research.” American Political Science Review 88, no. 2: 412–23. doi: 10.2307 /2944713.Google Scholar
Jones, Erik R. Daniel Kelemen, and Sophie Meunier. 2016. “Failing Forward? The Euro Crisis and the Incomplete Nature of European Integration.” Comparative Political Studies 49, no. 7: 1010–34. doi: 10.1177/0010414015617966.CrossRefGoogle Scholar
Kelemen, R. Daniel, and McNamara, Kathleen R.. 2017. “How Theories of State-Building Explain the EU.” Paper presented at the European Union Studies Association Biennial Conference, Miami, Florida, May 4-6.Google Scholar
Kelemen, R. Daniel, and Pavone, Tommaso. 2018. “The Political Geography of Legal Integration: Visualizing Institutional Change in the European Union.” World Politics 70, no. 3: 358–97. doi: 10.1017/S0043887118000011.CrossRefGoogle Scholar
Kitschelt, Herbert, and Wilkinson, Steven I., eds. 2007. Patrons, Clients and Policies: Patterns of Democratic Accountability and Political Competition. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Paul, Krugman. 1991. Geography and Trade. Cambridge, Mass.: MIT Press.Google Scholar
Paul, Krugman. 2012. End This Depression Now! New York, N.Y.: W. W. Norton.Google Scholar
Lange, Kenneth L., Little, Roderick J. A., and Taylor, Jeremy M. G.. 1989. “Robust Statistical Modeling Using the t-Distribution.” Journal of the American Statistical Association 84, no. 408: 881–96. doi: 10.1080/01621459.1989.10478852.Google Scholar
McNamara, Kathleen R. 2015. “The Forgotten Problem of Embeddedness: History Lessons for the Euro.” In Matthias, Matthijs and Blyth, Mark, eds., The Future of the Euro. Oxford, UK: Oxford University Press.Google Scholar
Moene, Kark Ove, and Wallerstein, Michael. 2001. “Inequality, Social Insurance and Redistribution.” American Political Science Review 95, no. 4: 859–74. doi: 10. 1017/S0003055400400067.CrossRefGoogle Scholar
Andrew, Moravcsik. 1998. The Choice for Europe: Social Purpose and State Power from Rome to Maastricht. Ithaca, N.Y.: Cornell University Press.Google Scholar
Morelli, Massimo, Huanxing, Yang, and Ye, Lixin. 2012. “Competitive Nonlinear Taxation and Constitutional Choice.” American Economic Journal: Microeconomics 4, no. 1: 142–75. doi: 10.1257/mic.4.1.142.Google Scholar
North, Douglass C., John Joseph, Wallis, and Weingast, Barry R.. 2006. “A Conceptual Framework for Interpreting Recorded Human History.” NBER Working Paper no. 12795. Cambridge, Mass.: National Bureau of Economic Research. doi: 10.3386/w12795.Google Scholar
Roberto, Perotti. 2001. “Is a Uniform Social Policy Better? Fiscal Federalism and Factor Mobility.” American Economic Review 91, no. 3: 596–610. doi: 10.1257 /aer.91.3.596.Google Scholar
Persson, Torsten, and Tabellini, Guido. 1996. “Federal Fiscal Constitutions: Risk Sharing and Moral Hazard.” Econometrica: Journal of the Econometric Society 64, no. 3: 623–46. doi: 10.2307/2171864.CrossRefGoogle Scholar
Pincus, Steven C. A., and Robinson, James A.. 2014. “What Really Happened during the Glorious Revolution?” In Sebastian, Galiani and Sened, Itai, eds., Institutions, Property Rights, and Economic Growth: The Legacy of Douglass North. Cambridge, UK: Cambridge University Press.Google Scholar
Pisani-Ferry, Jean, Erkki, Vihriala, and Wolff, Guntram B.. 2013. “Options for a Euro-Area Fiscal Capacity.” Bruegel Policy Contribution 2013/01. Saint-Josse-ten-Noode, Belgium: Bruegel. At https://www.bruegel.org/2013/01/options-for-a-euro-area-fiscal-capacity/, accessed July 25, 2020.Google Scholar
Plümper, Thomas, and Troeger, Vera E.. 2008. “Fear of Floating and the External Effects of Currency Unions.” American Journal of Political Science 52, no. 3: 656–76. doi: 10.1111/j.1540-5907.2008.00335.xCrossRefGoogle Scholar
Poirier, Dale J. 1995. Intermediate Statistics and Econometrics: A Comparative Approach. Cambridge, Mass.: MIT Press.Google Scholar
Johannes, Popitz. 1927. “Der Finanzausgleich.” In Wilhelm, Gerloff and Meisel, Franz, eds., Handbuch der Finanzwissenschaft, Band 2. Tubingen, Germany: J. C. B. Mohr.Google Scholar
Philipp, Rehm. 2016. Risk Inequality and Welfare States: Social Policy Preferences, Development, and Dynamics. Cambridge, UK: Cambridge University Press.Google Scholar
Rendon, Silvio R. 2012. “Fixed and Random Effects in Classical and Bayesian Regression.” Oxford Bulletin ofEconomics and Statistics 75, no. 3: 460–76. doi: 10.11 11/j.1468-0084.2012.00700.x.CrossRefGoogle Scholar
Rickard, Stephanie J. 2012. “Lending a Helping Hand: Public Opinion towards International Financial Rescues.” Manuscript. London School of Economics.Google Scholar
Riker, William H. 1964. Federalism: Origin, Operation, Significance. Boston, Mass.: Little, Brown.Google Scholar
Sargent, Thomas J. 2012. “Nobel Lecture: United States Then, Europe Now.” Journal of Political Economy 120, no. 1: 1–40. doi: 10.1086/665415.CrossRefGoogle Scholar
Satter, Marlene Y. 2011. “Strengthen Euro Bailout Fund: German Employers Group.” ThinkAdvisor, March 8. At https://bit.ly/3gmpx1Q, accessed July 22, 2020.Google Scholar
Scharpf, Fritz W. 2011. “Monetary Union, Fiscal Crisis and the Preemption of Democracy.” LEQS Paper no. 36. doi: 10.2139/ssrn.1852316.Google Scholar
Frank, Schimmelfennig. 2014. “European Integration in the Euro Crisis: The Limits of Postfunctionalism.” Journal of European Integration 36, no. 3: 321–37. doi: 10.1080/07036337.2014.886399.Google Scholar
Frank, Schimmelfennig. 2015. “Liberal Intergovernmentalism and the Euro Area Crisis.” Journal of European Public Policy 22, no. 2: 177–95. doi: 10.1080/1350 1763.2014.994020.Google Scholar
Schneider, Christina J. 2009. Conflict, Negotiation and European Union Enlargement. Cambridge, UK: Cambridge University Press.Google Scholar
Schneider, Christina J. 2018. The Responsive Union: National Elections and European Governance. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Schneider, Friedrich, Andreas, Buehn, and Montenegro, Claudio E.. 2010. “New Estimates for the Shadow Economies all over the World.” International Economic Journal 24, no. 4: 443–61. doi: 10.1080/10168737.2010.525974.CrossRefGoogle Scholar
Stiglitz, Joseph E. 2011. “What Can Save the Euro?” Project Syndicate, December 5. At https://www.project-syndicate.org/commentary/what-can-save-the-euro, accessed June 13, 2018.Google Scholar
Stone Sweet, Alec, and Sandholtz, Wayne. 1997. “European Integration and Supranational Governance.” Journal of European Public Policy 4, no. 3: 297–317. doi: 10.1080/13501769780000011.CrossRefGoogle Scholar
Stone Sweet, Alec, and Sandholtz, Wayne. 1998. “Integration, Supranational Governance, and the Institutionalization of the European Polity.” In Wayne, Sandholtz and Stone Sweet, Alec, eds., European Integration and Supranational Governance. Oxford, UK: Oxford University Press. doi: 10.1093/0198294646.001.0001.Google Scholar
Kathleen, Thelen. 2012. “Varieties of Capitalism: Trajectories of Liberalization and the New Politics of Social Solidarity.” Annual Review of Political Science 15: 137–59. doi: 10.1146/annurev-polisci-070110-122959.Google Scholar
Varian, Hal R. 1980. “Redistributive Taxation as Social Insurance.” Journal of Public Economics 14, no. 1: 49–68. doi: 10.1016/0047-2727(80)90004-3.CrossRefGoogle Scholar
Stefanie, Walter. 2016. “Crisis Politics in Europe: Why Austerity Is Easier to Implement in Some Countries Than in Others.” Comparative Political Studies 49, no. 7: 841–73. doi: 10.1177/0010414015617967.Google Scholar
Walter, Stefanie, Dinas, Elias, Jurado, Ignacio, and Konstantinidis, Nikitas. 2018. “Noncooperation by Popular Vote: Expectations, Foreign Intervention, and the Vote in the 2015 Greek Bailout Referendum.” International Organization 72, no. 4: 969–94. doi: 10.1017/S0020818318000255.CrossRefGoogle Scholar
Supplementary material: Link

Beramendi and Stegmueller Dataset

Dataset

https://doi.org/10.7910/DVN/P5HVGW
Link
Supplementary material: PDF

Beramendi and Stegmueller supplementary material

Beramendi and Stegmueller supplementary material

Download Beramendi and Stegmueller supplementary material(PDF)
PDF 236.4 KB