Financial Crises and the Politics of Adjustment and Reform

Over the past couple of months, I have been working on an essay entitled “Financial Crises and the Politics of Adjustment and Reform.” It is slated to appear in the forthcoming Research Handbook for International Monetary Relations, edited by two members of the IPE@UNC team. The working draft is now available (PDF).

In lieu of the abstract, which is just descriptive, here an excerpt from the conclusion which characterizes the main lessons that I have drawn from this exercise.

There just are not enough country-year observations available for cross-national regressions that investigate the complex, conditional, and endogenous relationships that characterize financial crisis politics. It is striking, in this regard, to observe that most of the standard references on financial crises and post-crisis politics and policy—in economics as well as in political science—are primarily qualitative in orientation (e.g. Gourevitch 1986; Eichengreen 1992; Haggard 2000b; Kindleberger 2000). The same is true of the most important new contributions to understanding the Global Financial Crisis and its political consequences (e.g. Bermeo and Pontusson 2012; Kahler and Lake 2013; Streeck and Schafer 2013). These are works which cannot, by design, test causal claims across time and space. They do, however, combine theory, history, contextual understanding, and frequently statistical data as well to make bounded inferences about the political effects of financial crises, recognizing the inherent complexity and indeterminacy of crisis situations. The result is less a comprehensive and progressive research program where findings build upon one another, and more an increasingly rich understanding of how and when financial crises affect politics.