Varieties of helping capitalism: politico-economic determinants of bank rescue packages in the EU during the recent crisis

Weber, Beat; Schmitz, Stefan W.

doi:10.1093/ser/mwr009

Cited by 60 publications

(16 citation statements)

References 20 publications

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“…7 Although commitment is not a measure of actual spending of the public budget, the choices of this containment level are not 'trivial' (Gandrud and O'Keeffe 2017, p. 394). Because it cannot be adjusted without undermining market confidence, a higher level of budgetary commitment may pose large and long-lasting effects on public finance (Gandrud and O'Keeffe 2017), also by enhancing banks' moral hazard and undermining their incentive to be prudent during the same crisis (Weber and Schmitz 2011). Accordingly, that this index assesses the extent of a given government's informative capacity in assessing the severity of a financial crisis and responding proportionally to it.…”

Section: Designing Indexes Of Macroeconomic Policy Responsementioning

confidence: 99%

Assessing disproportionality: indexes of policy responses to the 2007–2008 banking crisis

Francesco

Maggetti

2017

Policy Sci

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Contemporary theories of the policy process typically assume that policy responses tend to go through long periods of stasis alternated with occasional bursts of intense activity. The concept of policy punctuations has been put forward to denote largescale changes in public policies that take place in crisis moments. However, research on the dynamics of policy overreaction and underreaction is still in its infancy. It has mostly focused on either small-n cross-sectional analysis of government spending or case studies of single events. A comparative assessment of the extent of disproportionate responses in a crisis is still lacking. To fill this gap, in this paper we develop a framework to conceptualize, operationalize, and ultimately assess disproportionate policy responses systematically from a cross-sectional perspective. We create a series of indexes to measure policy over-and underreactions among the EU member states that experienced the 2007-2008 banking crisis. We found that a large majority of EU countries overreacted through public liability guarantee and budget commitment. On the other hand, regulatory responses are characterized by a greater variation.

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Section: Designing Indexes Of Macroeconomic Policy Responsementioning

confidence: 99%

Assessing disproportionality: indexes of policy responses to the 2007–2008 banking crisis

Francesco

Maggetti

2017

Policy Sci

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“…Weber and Schmitz (2011) explore the determinants and nature of bank rescue packages in the EU during the crisis and seek to locate them in countries' different institutional, economic and political characteristics. Lallement (2011: 627) examines the effect of the crisis on employment in Europe and concomitant adjustment mechanisms in the labour market and argues that different types of adjustment 'reflect the persistence of three varieties of capitalism in Europe'.…”

Section: Theorising Neoliberalismmentioning

confidence: 99%

Deepening Neoliberalism, Austerity, and Crisis

Mercille

Murphy

2015

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“…Our article makes an important contribution to the growing literature on the political economy of public responses to banking crises (see Alesina and Drazen, 1991;Grossman and Woll, 2014;Keefer, 2007;Pepinsky, 2014;Rodrik, 1999;Rosas, 2006Rosas, , 2009Weber and Schmitz, 2011;Woll, 2014). We use a signalling game framework to understand how information asymmetries between political decisionmakers and bureaucrats shape initial crisis responses.…”

Section: Introductionmentioning

confidence: 93%

Information and financial crisis policy-making

Gandrud

O'Keeffe

2016

Journal of European Public Policy

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This is the accepted version of the paper.This version of the publication may differ from the final published version. Permanent repository link AbstractThe degree to which governments intervene to contain financial crises varies considerably. We aim to understand why policymakers choose the level of intervention they do to contain financial shocks.In particular, we want to understand why policymakers may choose policies that create outcomes they do not want. We focus on a defining feature of financial crisis policymaking that has been largely unaddressed in the literature on policy responses to crises: policymakers lack good information about the health of their banking systems. So, they rely on their bureaucrats and other actors for necessary information. However, information providers may have di↵erent policy preferences. To understand the interactions between these actors and the implications for policy choice, we advance a signalling game of financial crisis containment. We use comparative statics and a case study of the recent Irish crisis to demonstrate how information asymmetries can have a significant impact on bailout choices.

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Varieties of helping capitalism: politico-economic determinants of bank rescue packages in the EU during the recent crisis

Cited by 60 publications

References 20 publications

Assessing disproportionality: indexes of policy responses to the 2007–2008 banking crisis

Assessing disproportionality: indexes of policy responses to the 2007–2008 banking crisis

Deepening Neoliberalism, Austerity, and Crisis

Information and financial crisis policy-making

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