Borrowing for social security? Credit, asset-based welfare and the decline of the German savings regime

Mertens, Daniel

doi:10.1177/0958928717717658

Cited by 24 publications

(10 citation statements)

References 43 publications

(27 reference statements)

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“…Here, economic and social policies are pursued by quasi-fiscal institutions whose costs only materialize in public budgets in the case of severe crisis and risk exposure (cf. Mertens, 2017; Quinn, 2017). This means that besides defining the policy goals, the primary task for the state in such constructions is to manage this risk (Moss, 2002).…”

Section: Conceptualizing the Role Of Development Banks In Contemporarmentioning

confidence: 99%

Market-based but state-led: The role of public development banks in shaping market-based finance in the European Union

Mertens

Thiemann

2018

Competition & Change

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This paper examines the European Union's strategy of governing the economy through financial markets by focusing on the largely unacknowledged role of public development banks, including the multilateral European Investment Bank. It argues that these state-owned financial institutions have moved into a key position in the recent evolution of the European financial system and economic governance. Since the crisis, policy makers have used them to address the intrinsic volatility and excess liquidity of contemporary financial markets, as well as offset the constraints on public investment imposed by institutionalized fiscal austerity. The paper provides evidence for this claim through an analysis of the emergent policy nexus between the Investment Plan for Europe and the Action Plan on Building a Capital Markets Union. Based on official documents and interview data, it specifically traces the risk-sharing devices for small-and medium-sized enterprise and infrastructure finance set up by development banks within these initiatives. Equipped with public guarantees, they have been instrumental for the promotion of securitization markets and publicprivate partnerships through increased multilevel collaborations among development banks. The anchor role of such quasi-fiscal state actors in shaping capital markets, the paper concludes, has profound political implications, and therefore warrants further scholarly attention.

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Section: Conceptualizing the Role Of Development Banks In Contemporarmentioning

confidence: 99%

Market-based but state-led: The role of public development banks in shaping market-based finance in the European Union

Mertens

Thiemann

2018

Competition & Change

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“…Circumstances traditionally connected to poverty, such as low income levels, unemployment and poor health, are usually identified as factors that increase the risk for households to develop severe debt burdens (Caputo, 2012;Krumer-Nevo, Gorodzeisky, & Saar-Heiman, 2017;Patel, Balmer, & Pleasence, 2012;Russell, Maître, & Whelan, 2013). Increased levels of household indebtedness have also been linked to the recent decade's austerity-driven changes in social policy, where cutbacks of public programmes have given room for loans and credit as welfare-complementary components, thereby promoting a 'credit-based welfare' (Mertens, 2017).…”

Section: Introductionmentioning

confidence: 99%

Gendered debt – a scoping study review of research on debt acquisition and management in single and couple households

Callegari

Liedgren

Kullberg

2019

European Journal of Social Work

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“…The welfare-debt tradeoff theories focus too heavily on the Anglo-liberal experience and fail to acknowledge the high indebtment of Northern European welfare states (Figure 1). Likewise, the complementarity hypothesis does not clarify why some generous continental welfare states do not show higher levels of private debt, such as in Germany (Mertens 2017a(Mertens , 2017b or France, despite having the highest welfare spending out of all OECD countries. While welfaredebt tradeoff theories might explain the rise of private debt in Anglo-liberal countries, they fail to explain rising indebtedness in Europe.…”

Section: The Welfare Debt Tradeoff Hypothesis and Its Limitsmentioning

confidence: 93%

The impact of welfare on household debt

Comelli¹

2021

Sociological Spectrum

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This article aims to advance the theoretical understanding of how welfare affects household needs and willingness to take on debt across OECD countries. Previous sociological literature has attempted to explain indebtedness through the quantity of welfare spending, by searching for a tradeoff between the lack of welfare and the increase of household debt. Based on the "life cycle" hypothesis, according to which people take on debt when they are younger and pay it off as they age, this paper argues that divergence in household debt across countries is a function of the welfare state's orientation toward old-age provisions and the insider/outsider cleavage in the labor market. A welfare state that is generous toward the youth, facilitates the possibility for people to plan ahead in life and, by stabilizing financial expectations, makes people less risk averse. Higher debt ratios are more common in Northern countries as social protection is more extensive; while in continental countries, where welfare benefits are narrower and tend to target the already employed and the elderly, people are more riskaverse toward debt. The proposed theory is supported by an illustrative empirical analysis using data from the OECD SOCX, the Comparative Welfare Entitlements Dataset (CWED2) and the ECRI statistical package. Introduction: from a private trouble to a public issue Over the last 20 years, household debt relative to income has increased significantly in all Organization for Economic Cooperation and Development (OECD) countries, peaking around the 2007-2008 economic crisis. Since then, deleverage has been limited and, in many countries, household debt has continued to accumulate. Despite some common trends, the differences between countries remain significant. Before the crisis of 2008, household debt was considered a private trouble and received little sociological attention (Ritzer 2011). The crisis in the United States shifted the perception of household debt in the eyes of scholars and public institutions from a private to a public issue (Turner 2017). Personal debt has been seen as one of the leading causes of the crisis, not only because people were unable to repay their debts, but also because economic activity was absorbed in repaying any existing debts, thereby slashing growth (Jord a, Schularick, and Taylor 2015; Mian and Sufi 2015). Sociologists and political economists have begun investigating the relationship between credit and welfare spending. Many authors, especially Anglo-American scholars, argued that the rise of debt was the effect of welfare retrenchment or the lack of welfare protection (

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Borrowing for social security? Credit, asset-based welfare and the decline of the German savings regime

Cited by 24 publications

References 43 publications

Market-based but state-led: The role of public development banks in shaping market-based finance in the European Union

Market-based but state-led: The role of public development banks in shaping market-based finance in the European Union

Gendered debt – a scoping study review of research on debt acquisition and management in single and couple households

The impact of welfare on household debt

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