Comparative Political Economy

For generations, Europeans have become accustomed to rising prosperity, an increasingly supportive social safety net and the expectation that each generation will fare better than the last. Europe has built a social model that is second to none, and fashioned a continent of disparate nations into a community that shares common values with democratic institutions that are the envy of the world. Yet, Europe, as a common project is increasingly questioned by its citizens. The emphasis on solidarity, the driving force behind the social and economic integration, has given way to suspicion and nationalism. Openness and tolerance are strained by xenophobic, anti-immigrant sentiments, while populists and extremists set the agenda and dominate the policy debate. European countries have borne the brunt of the global economic forces that have strained its institutions and capacity to respond appropriately. Characterised by uncertainty and delay both in handling the Euro crisis, Greece’s ongoing economic woes, Brexit and now a migrant crisis, Europe is at a crossroads in its development: a restructuring at the very least, if not a new settlement of power within the union, is on the cards. This book will attempt to understand what "post-crisis Europe" will look like, and what the opportunities are to rethink its economic, social and institutional architecture as well as to address the nagging democratic deficit that undermines its legitimacy as a democratic entity. George Papaconstantinou is uniquely placed to offer commentary on the machinations of the union and its internal behaviour. Appointed Greek Finance Minister by Papandreou in the newly formed government in 2009, he played a key role in the Greek crisis, negotiating the first bail-out with the Troika.

The European welfare systems, established after the Second World War, have been under sustained attack since the late 1970s from the neoliberal drive towards a small state and from the market as the foremost instrument for the efficient allocation of scarce resources. After the 2008 financial crash, Europe's high tax and generous benefits welfare states were, once again, blamed for economic stagnation and political immobilism. If anything, however, the long decade of the Great Recession proved that the welfare state remained a fundamental asset in hard times, stabilizing the economy, protecting households and individuals from poverty, reconciling gendered work and family life, while improving the skills and competences needed in Europe's knowledge economy and ageing society. Finally, the spread of the Covid-19 pandemic has, unsuprisingly, brought back into the limelight the productive role of welfare systems in guaranteeing basic security, human capabilities, economic opportunities, and democratic freedoms. In this important contribution, Anton Hemerijck and Robin Huguenot-Noël examine the nature of European welfare provision and the untruths that surround it. They evaluate the impact of the austerity measures that followed the Great Recession and consider its future design to better equip European societies to face social change, from global competition to accelerated demographic ageing, the digitalization of work and climate change.

The US subprime mortgage crisis, by nearly causing the collapse of the global financial system during the 2007—08 financial crisis, clearly revealed that household debt management is critical to the stability of the international economy. The configuration of mortgage finance systems of European economies, from the UK to Sweden to Spain, have profound effects on national macroeconomic and political outcomes. In this book, Gregory Fuller reveals how national housing systems diverge in terms of their commodification and financialization: mortgages are far more common in some systems than others; some encourage families to treat housing as a tradeable asset while others do not; and certain states provide extensive social housing programmes while others offer virtually none. These differences are shown to have an impact on households' economic precarity, macroeconomic volatility, and ultimately on their political preferences. Drawing on these comparisons, Fuller offers a number of policy suggestions intended to weaken the links between housing, economic instability, and inequality.

This lively and provocative look at the tension between economics and politics examines why so many mistakes in economic policy-making are made for political reasons and ignore the economic truths. Using short-term economic gains to ensure electoral success, argues Lorenzo Forni, inevitably spells macroeconomic disaster. Using the state budget, trade policy and monetary policy to prop up labour markets and the wider economy in order to boost voter approval ratings, while ignoring budget constraints can only result in longer recessions and economic downturns. Which then can incur the painful austerity measures needed to bring the economy back into balance. Forni looks at many unsustainable economic policies that have been implemented in parts of the world when the economic realities—there is no magic money tree!—would recommend a different and more prudent economic course.

The negotiation of international trade agreements has become the issue of the moment. With Brexit, a change in administration in the United States, a fragile economic recovery in the Eurozone and China facing a slowdown in its growth, nothing is more critical to the future global economy than the terms of trade between its largest economic blocs. The Transatlantic Trade and Investment Partnership (TTIP) is Europe's most controversial trade agreement ever. Aimed at reducing regulatory barriers between the United States and the EU, it was expected to be fairly straightforward given strong business support on both sides of the Atlantic. It has not been so. The negotiations have dragged on far longer than anticipated and now look set to fail altogether. Yet the process of its negotiation, the terms of the potential agreement and its sticking points provide valuable lessons for policy-makers and academics tasked to bring future trade deals and arrangements to successful conclusions. Alasdair Young offers a penetrating analysis of the complexities of the TTIP negotiations and explores why they have proved so difficult to conclude, what motivates the different parties concerned and what implications there are for politics and policy. Young throws light on the limits of the transatlantic cooperation and the processes of globalization and teases out the implications for the UK in its post-Brexit trade negotiations and for other nations now facing a more protectionist stance from the United States.

The implications of Brexit for Northern Ireland are profound, given its history and geographical position as a land border with the European Union. Four decades of sectarian violence have been replaced by a period of sustained peace, economic growth and development, yet the trenchant political divide remains. The ongoing fractious relations within the Northern Irish Assembly threaten to derail any hope the region might have on influencing the discussion and direction of the Brexit negotiations. Mary C. Murphy offers a detailed and in-depth analysis of Northern Ireland's relationship with the EU, the role the EU has played in rebuilding the region after the Troubles, and the challenges and opportunities that Brexit might offer Northern Ireland in terms of its fragile politics and economy. Northern Ireland has long occupied a greater political space than might seem warranted, given its size and relatively underdeveloped economy. This space may yet again become the most hotly contested and divisive topic in future Brexit negotiations, if it doesn't in fact prove to be the key to the successful UK withdrawal and future relations with our European neighbours.

Populism has become a significant feature of mature democracies in the twenty-first century and the rise of populist parties is proving a powerful and disruptive force. Catherine Fieschi offers a comparative analysis of the rise of populist parties in France, Italy, the Netherlands and the UK in the context of major digital and political transformations. Populism is effective, Fieschi shows, because it originates from within the democratic tradition and has been able to turn some of democracy’s key strengths against it – what she calls Jiu-jitsu politics. Populism needs to be understood not simply as a response to globalization by the “disillusioned” or “left behind”, but as a consequence of the digital revolution on our political and democratic expectations. She demonstrates how new dynamics unleashed by social media – the fantasy of radical transparency, the demand for immediacy and the rejection of expert truth and facts – have been harnessed by populism, enabling it to make unprecedented inroads into our political landscapes.

Current migration policy is based on a seemingly neutral accounting exercise, in which migrants contribute less in tax than they receive in welfare assistance. A “fact” that justifies increasingly restrictive asylum policies. Peo Hansen shows that this consensual cost-perspective on migration is built on a flawed economic conception of the orthodox “sound finance” doctrine prevalent in migration research and policy. By examining migration through the macroeconomic lens offered by modern monetary theory, Hansen is able to demonstrate sound finance’s detrimental impact on migration policy and research, including its role in stoking the toxic debate on migration in the European Union. More importantly, Hansen’s undertaking offers the tools with which both migration research and migration policy could be modernized and put on a realistic footing.