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Comparative and international political economy (CPE and IPE) are justifiably obsessed with finance as a source of power and as a key causal force for domestic and international economic outcomes. Yet both CPE and IPE ignore the single largest asset in people's everyday lives and one of the biggest financial assets in most economies: residential property and its associated mortgage debt. This special issue argues that residential housing and housing finance systems have important causal consequences for political behavior, social stability, the structure of welfare states, and macroeconomic outcomes. The articles examine specific instances across a range of countries. This introduction has broader aims. First, it shows that housing finance systems are not politically neutral. We argue that the kind of housing people occupy and the property rights surrounding housing can constitute political subjectivities and objective preferences not only about the level of public spending, but also the level and nature of inflation and taxation. Second, like the varieties of capitalism literature, we show that housing finance systems also have important complementarities with the larger economy. But we diverge from the varieties literature, suggesting that 'varieties of residential capitalism' are not explained by domestic institutional complementarities alone. Rather, what we refer to as financially repressed and financially liberal systems are globally interdependent. While welfare and taxation systems show high degrees of path dependence, transnational trends in the deregulation of housing finance have altered incentives and preferences for financial institutions, home owners, and would-be home owners. Finally, the introduction offers some speculation about how pocketbooks will drive politics as the global housing busts tightens mortgage belts around the waists of average Organization for Economic Cooperation and Development home owners.

In Australia, Denmark, New Zealand, and Sweden in the 1980s, coalitions of politicians, fiscal bureaucrats, and capital and labor in sectors exposed to international competition allied to transform the largest single nontradables sector in their society: the state, particularly the welfare state. They exposed state personnel and agencies to market pressures and competition to reduce the cost of welfare and other state services. The impetus for change came from rising foreign public and private debt. Rising public debt levels and expensive welfare states interacted to create a tax wedge between employers' wage costs and workers' received wages. This undercut international competitiveness, worsening current account deficits and leading to more foreign debt accumulation. Two factors explain variation in the degree of reorganization in each country: differences in their electoral and constitutional regimes; and the willingness of left parties to risk splitting their core constituencies. Introduction of market pressures is an effort to go beyond the liberalization of the economy common in industrial countries during the 1980s, and both to institutionalize limits to welfare spending and to change the nature of statesociety relations, away from corporatist forms of interest intermediation. In short, not just less state, but a different state.

W killed the growth of the welfare state? Its seemingly inexorable budgetary, programmatic, and personnel growth in the 1960s and 1970s ground to a halt in the 1980s, accompanied by the mutilation of programmes and rising unemployment. Was it an external intruder-globalization of one sort or another? Was it an inside job-domestic politics and demography? Or, as public choice theory suggests, was death self-inflicted by a combination of producer and client groups? As if this richness of suspects were not problem enough, the identity of the victim is also uncertain. In fact, the central mystery in the relationship between globalization and the welfare state is accurately identifying the victim; it is a mystery of concept formation in which, prosaically, no one is quite sure which dependent variable matters and how it is changing. Spending levels? Policies? Institutions? Wage equality? Employment levels? National autonomy? Two academic deformations of reality obscure the politics at the heart of this specific mystery. First, the richness of prior research on the formal or overt welfare state-systems of tax funded transfers and state provided or funded social services ameliorating life and economic risks for workersprovides a lamppost around which enquiries naturally cluster, asking how 'globalization' has affected those programmes, but ignoring areas of darkness away from the lamp. Second, a profound normative bias favouring welfare in most welfare state research obscures the fact that not all welfare is for workers, that the welfare state was never simply an instrumental tool for advancing labour's interests, and that 'welfare'-understood much more broadly as 'social protection'-was about sheltering all income streams, I thank Aida Hozic and David Waldner, respectively, for many long discussions of the film industry and social sciences in which they raised this alarm. Other useful comments came from

This is the unspecified version of the paper.This version of the publication may differ from the final published version. Permanent repository link Declaration of Conflicting InterestsThe author declared no conflicts of interest with respect to the authorship and/or publication of this article.Financial Disclosure/funding: Some research for this article was facilitated by the Bankard and Sesquicentennial Funds of the University of Virginia. Keywords: Welfare state, deregulation, mortgages, pensions, securitizationHousing, the welfare state, and the global financial crisis: what is the connection? Abstract:Analyses of the global financial crisis that assign causality to the erosion of parts of the welfare state that protected individuals miss the importance of macro-level regulation that protected firms and the financial system from itself. Post-Depression macro-level regulation of finance prevented the emergence of mismatched maturities where deposits lacked state guarantees, and thus prevented runs on banks or near-banks. A balance sheet approach shows that macro-regulation linked long duration liabilities in housing finance (mortgages) to long duration assets (pensions). Deregulation permitted the reemergence of mismatched maturities, providing both a necessary and sufficient condition for the current financial crisis.