European countries have been required to formulate a national preference in relation to the EU Financial Transaction Tax. The two leading approaches to explaining how the financial sector makes its views felt in the political process the structural power of the financial services sector based on potential disinvestment, and its instrumental power arising from direct political lobbyingfall short of providing a comprehensive account. The missing link is how and why policy-makers might be willing to adopt the priorities of key sectors of the financial services industry. We outline how three levels of ideational power might be at work in shaping outcomes, using Ireland as a case study. We argue that background systems of shared knowledge that are institutionalised in policy networks generated broad ideational convergence between the financial sector and policymakers, creating a policy paradigm over the priorities of industrial policy in general. Against that backdrop, debate over specific policy choices (policy instruments and policy settings) can leave room for a wider range of disagreement and indeed political and ideational contestation. Irish policymakers proved responsive to industry interests in the case of the FTT, but not for the reasons normally given.
This article discusses the International Monetary Fund’s recent effort to garner legitimacy by incorporating the reduction of economic inequality in its lending programs. It argues that the impact of the US as a major shareholder on conditionality and geopolitical considerations beyond objective and measurable economic necessities detract from these efforts to expand legitimacy. Using a panel data analysis of International Monetary Fund programs between 1980 and 2013, the article shows that US-allied left-wing governments receive a larger number of labor conditions in their programs compared to non-allied and right-wing governments. The article argues that this is part of left-wing governments’ strategy of maintaining their alliance with the US and demonstrating ideological proximity. In exchange, the US uses its influence to secure fewer conditions in total for its allied governments. This not only shifts the burden of adjustment on labor groups but also harms the Fund’s procedural legitimacy, as conditions are not objectively determined. It also has adverse implications for outcome legitimacy by distorting economic policies and outcomes and increasing income inequality.
This commentary for the “Political Economy Section COVID-19 Collection’’ discusses ideational continuity and change at the International Monetary Fund (IMF) in the context of the COVID-19 pandemic. It argues that, despite an initial advice to increase the government spending, the Fund has later reverted back to the market orthodoxy recommending fiscal discipline and balanced government budget in the longer-term. The piece argues that, although a global crisis and increased government spending by influential member states such as the United States might have prompted an ideational shift at the Fund, a lack of clear theorization of longer-term Keynesian policies in academic circles and in the economics profession, prevented a paradigmatic change at the Fund.
This introductory article outlines how Global Political Economy and the nuanced perspectives of scholars from this interdiscipline navigate claims about the origins and consequences of, as well as responses to, the COVID-19 pandemic. Emerging social scientific assessments have tended to understand the pandemic as either an entirely novel crisis (“everything has changed”) or one merely extending preexisting economic and political tensions (“nothing has changed”). Early analyses of political-economic aspects of the crisis assembled in this collection instead highlight both patterns of continuity and change—and the importance of situating changes within prepandemic continuities—that have emerged during the first year of the global pandemic. This introductory article brings together suggestions by and for Global Political Economy scholars, as well as social scientists more generally, for further researching key dynamics shaping the global political economy in the COVID-19 era as it keeps unfolding and evolving.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.