From Bad to Worse: Financial Crises, Polarization, and Inequality
- Exzellenz-Cluster 2035 The Politics of Inequality
|(2022): Keeping a Watchful Eye : Parliamentary Oversight of EU institutions during Crises The Political Economist
dc.contributor.author: Genovese, Federica; Schneider, Gerald
|(2020): Smoke with fire : Financial crises and the demand for parliamentary oversight in the European Union The Review of International Organizations. Springer. 2020, 15(3), pp. 633-665. ISSN 1559-7431. eISSN 1559-744X. Available under: doi: 10.1007/s11558-020-09383-0
The handling of the 2008 financial crisis has reinforced the conviction that the European Union (EU) is undemocratic and that member states are forced to delegate overwhelming power to a supranational technocracy. However, European countries have engaged with this alleged power drift differently, with only a few member states demanding more parliamentary scrutiny of EU institutions. This article develops a political economy explanation for why only some states have enforced mechanisms to monitor the EU more closely. Our theory focuses on the role of the crisis and the impact of fiscal autonomy in countries outside and inside currency arrangements such as the European Economic and Monetary Union (EMU). We argue that, in the aftermath of a severe economic shock, member states outside the EMU possess more monetary and fiscal resources to handle the crisis. These would then demand oversight of EU decision-making if their fiscal sustainability depends on the Union. By contrast, Eurozone states that need policy changes cannot address the crisis independently or initiate reforms to scrutinize the EU. Hence, we argue that during the heated moments of severe economic downturns, parliaments in Eurozone countries discuss supranational supervision rarely. As these legislatures have nevertheless to give in to the popular demand for EU control, they express support for more EU supervision in the infrequent times of debate. We provide evidence for our theory with a cross-national analysis of EU oversight institutions, and a new original dataset of parliamentary debates during the Eurozone crisis. Our findings highlight the political consequences that financial nosedives have across the diverse membership of a supranational organization.
|(2020): Explaining the uneven demand for EU parliamentary oversight during the Eurozone crisis LSE EUROPP blog
The Eurozone crisis increased calls for institutional reform and closer parliamentary oversight of the EU’s crisis managers. As Federica Genovese and Gerald Schneider show, the national demand for increased parliamentary scrutiny crucially hinged on the exposure to the crisis and the domestic leeway in fighting it.
|(2020): Casino Capitalism? : The Impact of Financial Crises on Inequality, 1970 to 2016
The ways in which countries have reacted to financial crises varies considerably. While income inequality has grown in more than half of the EU member states after the Great Recession, some countries such as the United States have experienced a significant increase in wealth inequality. A number of countries, by contrast, was able to keep these inequities at bay. We argue in this paper that the impact of financial crises on inequality differ between the type and severity of these economic shocks and that sovereign debt and exchange rate rather than banking crises increase the economic inequities. The paper also examines the extent to which fiscal constraints of governments and membership in the Eurozone mediate these effects. We examine the diverse income and wealth inequality effects to more than 50 financial crises across the OECD member states from 1970 to 2010. The empirical evidence gathered so far supports our conjecture of different distributive effects of varying types of crises.
|(2020): Falling Apart or Flocking Together? : Financial Crises, Inequality and Left-Right Polarization in the OECD
Falling Apart or Flocking Together? : Financial Crises, Inequality and Left-Right Polarization in the OECD
According to the conventional wisdom, political polarization has been growing in the past few decades, and increasing inequality and financial crises have fuelled this trend. Making use of new measures and differentiating between parliamentary and electoral polarization across the left-right cleavage, this article offers a comparative evaluation of this claim for the OECD countries. The results show that the electorates in the European Union have become more conflictive, while the political parties represented in the national parliaments have moved in opposite direction. The statistical analysis demonstrates in line with the theoretical expectations that currency crises have increased mass polarization. The article also offers some tentative support for the hypothesis that increased levels of income inequality enhance this trend and that growing elite discord increases the left-right confrontation in the electorate.
|01.10.2019 – 31.03.2024