Electoral Coalitions and Policy Reversals in Portugal and Italy in the Aftermath of the Eurozone Crisis

Abstract

This paper links patterns of deregulatory reforms and postcrisis reversals in Italy and Portugal with the electoral constituencies of political parties. Combining insights from the social coalitions and electoral behaviour debates, we link reform outcomes to the class setup of the electorate in the two countries by using the class schema developed by Daniel Oesch. We find that governments in both countries reversed austerity measures in order to protect core groups of voters within their electorate in spite of wide ideological differences between governing coalitions in the two countries. There is, however, some variation in the extent of the reversals across policy areas.

Beyond Conditionality: Policy Reversals in Southern Europe in the Aftermath of the Eurozone Crisis

“…This is confirmed by the articles in this volume, which show that reversals are a common occurrence in the aftermath of the crisis; but that governments are selective in their choices. The contributions of Branco et al (2019), Afonso and Bulfone (2019) and show that reversals are observed across all policy areas, by both the left and the right, and in all countries. For example, Branco et al (2019) count a total of 17 reversals of structural reforms: five in Spain, and six each in Portugal and Italy.…”

“…Another similarity with Portugal's neighbour is that new job creation compensated for only half of the job losses during the crisis; and part time employmentwhich was almost nonexistent in 2008reached nine per cent in 2017 (one third of which is involuntary). Despite this relative lack of success of the internal devaluation strategies, most of the labour markets reforms were kept, with the exception of measures on the extension of collective agreements (that was requested by employers) and on extra working hours in the private sectorwhich had the agreement of employers and the smaller trade unions (Afonso & Bulfone 2019).…”

“…In line with our theoretical framework, contributions in this volume show that the distribution of costs and benefits matters to explain policy reversals. , Branco et al (2019) and Afonso and Bulfone (2019) describe the costs associated with reversals in terms of lack of budgetary revenues, damaged credibility or the possibility of sanctions by the EC. They show that, given these costs, governments have a choice to make and are more likely to reverse reforms when there is a strong possibility they will bring an electoral payoff.…”

“…Indeed, demonstrate that reversals become more likely when the benefits of these reversals are concentrated and visible, in contrast to cases where the benefits are diffuse. Similarly, Afonso and Bulfone (2019) show that the nature and occurence of reversals is also shaped by the social constituencies that constitute the support base of parties in power. For instance, pensions are a particularly important issue for the Portuguese Communist Party and the Italian Lega because of the sizeable share of older voters within their electorate; in contrast, labour regulations are more salient to the Portuguese Bloco and the 5-star Movement, which have a younger electoral clientele.…”

“…Instead, most of the contributions herein look at policy reversals. Some articles focus only on structural reforms in Italy, Spain and Portugal (Branco et al 2019;Afonso & Bulfone 2019), whereas another observes all kinds of policies triggered by conditionality in Spain and Portugal. Finally, Perez and Matsaganis (2019) analyse the social effects of reforms of the labour market passed during the crisis in both these countries and Greece.…”