The effects of political institutions during the crisis of 2007-2012

Klaus ArmingeonInstitute of Political ScienceUniversität Bern

Hans Keman Symposium, 2013 09 27

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The puzzle

> Our theories suggest that the policies and policy outcomes differ by political institutions.

> The main argument: Institutions constrain political actors and create specific political opportunities.

> One major example: Fritz W. Scharpf: Crisis and Choice in European Social Democracy. Ithaca, N.Y., Cornell University Press.

> During the present crisis, policy responses seem to be similar between countries. However, these countries differ enormeously with regard to institutions.

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The argument

> (1) A cautious preliminary remark: In ten years we could see differences, which we cannot see today.

> (2) The ‘constant structure and coefficient’ fallacy: We assume that institutions hardly change and that assignment to a specific institution (e.g. consociational democracy) has the same effect irrespective of time and circumstances. However, we observe considerable path-dependent changes of institutions and their socio-cultural foundations during the past 40 years. Their effects may vary.

> (3) Actors may create, change, and ignore institutions – in particular in hard times. They have primacy over institutions – while we implicitly assumed a balance or even an institutional primacy in our various versions of the ‘actor-centered institutionalism’.

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Structure

> A stylized description of policies in the current crisis in mature democracies (OECD/EU).

> What institutional effects would we expect?

> The constant structure and coefficient fallacy: Institutional change

> Actors have primacy over institutions

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A stylized description of policy responses during the crisis

> (1) Very different fiscal responses 2008-2010.

> (2) Similar policies since 2010: Austerity programs (with the Japanese exception) and differences in implementation of austerity programs.

> (3) Path-dependent policy development: Liberalization. Sound fiscal policy. No major new social policies.

>

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What did we expect?

> Less policy innovation/expansive fiscal policy in federalist countries

> More liberalization/austerity in — LMEs; — liberal welfare states;— pluralist systems of collective labour relations

> Less radical changes in — consociational democracies— systems with strong constitutional courts/a particular emphasis

on the rule of the law> The central bank focusses on price stability, and avoids any

‚active‘ monetary policy

> None of this happened

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Constant structure and effect?

> Federalism— The decline of the unitary state— The declining power of the subnational political systems (EU-

integration)

> Constitutional courts and the rule of the law— Art 267 Treaty of the Functioning of the EU. Preliminary ruling

of the Court of Justice. The hidden centralization of the legal system

— Landmark rulings: e.g. Cassis de Dijon (1979) the primacy of negative integration; Laval , Viking (2008), the primacy of free markets over national welfare states

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Constant structure and effect?

> The change of consociational democracy

— Little change of Lijphart‘s indicators

— The erosion of the socio-cultural foundations of the consociational democracy

— The erosion of the socio-economic foundations of the Westminister democracy

— Convergence towards fragmented political systems and the need for policy development by negotiation – which is not necessarily based on elites socialised in the Dutch/Swiss-way

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Constant structure and effect?Welfare states (left: expenditures, right entitlements & benefits)

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Constant structure and effect?Corporatism and collective labour relations

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Constant structure and effect?Corporatism and collective labour relations

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Primacy of actors over institutions

> Three strategies

> Stretching the boundaries:— Active: The redefinition of the Stability and Growth Pact

2002/2003— Passive: Federalism that did not impede expansionary fiscal

policy 2008-2010 (Australia, USA, Spain)> Ignoring the rules

— The No-Bail-Out rule— An activist monetary policy

> Creating new rules. Six-pack. The hidden transfer union without democratic control— Actors shape the institutions which they wish to have

>

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Conclusions

> If this is correct, what should be done?

> (1) Shifting the emphasis from institutions to actors

> (2) Shifting the emphasis from ‚worlds‘ to ‚processes‘

> More emphasis on the analysis of conflicts and compromises between elites and between politically mobilised socio-economic and socio-cultural groups

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Hinweise

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