Showing papers on "Retrenchment published in 2011"

Capital Flow Waves: Surges, Stops, Flights and Retranchment

Abstract: This paper analyzes the drivers of international waves in capital flows. We build on the literature on “sudden stops” and “bonanzas” to develop a new methodology for identifying episodes of extreme capital flow movements using quarterly data on gross inflows and gross outflows, differentiating activity by foreigners and domestics. We identify episodes of “surge”, “stop”, “flight”, and “retrenchment” and show how our approach yields fundamentally different results than the previous literature that used measures of net flows. Global factors, especially global risk, are the most important determinants of these episodes. Contagion, especially through trade and the bilateral exposure of banking systems, is important in determining stop and retrenchment episodes. Domestic macroeconomic characteristics are generally less important, although changes in domestic economic growth influence episodes caused by foreigners. We find little role for capital controls in reducing capital flow waves. The results help provide insights for different theoretical approaches explaining crises and capital flow volatility.

The great retrenchment: international capital flows during the global financial crisis

Abstract: The current crisis saw an unprecedented collapse in international capital flows after years of rising financial globalization. We identify the stylized facts and main drivers of this development. The retrenchment in international capital flows is a highly heterogeneous phenomenon: first, across time, being especially dramatic in the wake of the Lehman Brothers’ failure; secondly, across types of flows, with banking flows being the hardest hit due to their sensitivity of risk perception; and thirdly, across regions, with emerging economies experiencing a shorter-lived retrenchment than developed economies. Our econometric analysis shows that the magnitude of the retrenchment in capital flows across countries is linked to the extent of international financial integration, its specific nature – with countries relying on bank flows being the hardest hit – as well as domestic macroeconomic conditions and their connection to world trade flows. — Gian-Maria Milesi-Ferretti and Cedric Tille

The electoral consequences of welfare state retrenchment: Blame avoidance or credit claiming in the era of permanent austerity?

Abstract: This article challenges the dominant assumptions in the literature that cutting social policy incurs voter wrath and that political parties can efficiently internalise electoral fallout with blame avoidance strategies. Drawing on the diverse literature on the role of partisanship in the period of permanent austerity, several partisan hypotheses on the rela- tionship between social policy change and electoral outcomes are posited.The results indi- cate that religious and liberal parties gain votes, and thereby are able to 'claim credit', for retrenching social policy. None of the other coefficients for the effect of social policy cuts reach significance, raising the question of whether parties excel at blame avoidance or the public fails to place blame in the first place.

Do Powerful Politicians Cause Corporate Downsizing

Abstract: This paper employs a new empirical approach for identifying the impact of government spending on the private sector Our key innovation is to use changes in congressional committee chairmanships as a source of exogenous variation in state-level federal expenditures We show that fiscal spending shocks appear to significantly dampen corporate investment activity This retrenchment occurs within large and small states and is most pronounced among geographically concentrated firms The effects are economically meaningful, and the mechanism—entirely distinct from interest rate and tax channels—suggests new considerations in assessing the impact of government spending on private-sector economic activity

Graceful Decline?: The Surprising Success of Great Power Retrenchment

Abstract: There is broad scholarly consensus that the relative power of the United States is declining and that this decline will have negative consequences for international politics. This pessimism is justified by the belief that great powers have few options to deal with acute relative decline. Retrenchment is seen as a hazardous policy that demoralizes allies and encourages external predation. Faced with shrinking means, great powers are thought to have few options to stave off decline short of preventive war. Contrary to the conventional wisdom, however, retrenchment is not a relatively rare and ineffective policy instrument. A comparison of eighteen cases of acute relative decline since 1870 demonstrates that great powers frequently engage in retrenchment and that retrenchment is often effective. In addition, we find that prevailing explanations overstate the importance of democracies, bureaucracies, and interest groups in inhibiting retrenchment. In fact, the rate of decline can account for both the extent a...

To What Extent Did the Financial Crisis Intensify the Pressure to Reform the Welfare State

Abstract: If ever there was momentum to roll back the welfare state, it is the (aftermath) of the financial crisis of 2008-09. All theoretical perspectives within comparative welfare state research predict radical reform in this circumstance, but does it also happen? Our data indicate that - at least so far - it does not. Focusing on a selection of advanced welfare states (the UK, the USA, Germany, the Netherlands, Denmark and Sweden), we find that these countries face similar problems and that their initial response to these problems is also similar. The latter is surprising because, theoretically, we would expect varying responses across welfare state regime types. Rather than retrenchment, we observe a first phase of emergency capital injections in the banking sector and a second of Keynesian demand management and labour market protection, including the (temporary) expansion of social programmes. Continuing public support for the welfare state was a main precondition for this lack of immediate radical retrenchment. However, the contours of a third phase have become apparent now that budgetary constraints are forcing political actors to make tough choices and introduce austerity policies. As a result, the question of who pays what, when, and how will likely give rise to increasingly sharp distributional conflicts. © 2011 Blackwell Publishing Ltd.

State Retrenchment and the Exercise of Citizenship in Africa

Abstract: What explains the varied ways that Africans practice citizenship on an everyday basis? And how does the extent of state building (or neoliberal unbuilding) in a particular context affect the way in

Why Did Estonia Choose Fiscal Retrenchment after the 2008 Crisis

Abstract: The budgetary response of Estonia to the 2008 global financial crisis poses a puzzle. While many other countries increased public expenditure and ran high deficits in 2009, the Estonian government was different: it undertook fiscal retrenchment, combining expenditure cuts and tax increases, despite a large drop in economic output. This article explains why the Estonian government opted for fiscal consolidation during the crisis. The ideological position of the governing parties and their desire the join the euro-zone played an important role in driving fiscal discipline. It also argues that the key to understanding Estonia's fiscal decisions in 2009 is what happened in the 1990s: fiscal policy choices became path-dependent as a result of positive feedback loops from previous periods of fiscal consolidation. Path-dependency was further reinforced by institutional capabilities (or lack thereof) created by initial macroeconomic policy choices.

Political Strategies and Fiscal Retrenchment: Evidence from Four Countries

Abstract: Political strategy matters – especially in the case of unpopular reforms This is the main argument of this article It shows that the analysis of political strategies gives complementary insights into the causal mechanisms of reform politics It helps us to understand how political actors successfully implement unpopular reforms The article provides empirical evidence for this claim by means of an analysis of adjustment efforts in Sweden, Belgium, Canada and France during the 1990s It is shown that governments acted strategically in two areas: they used strategic manoeuvres in the political sphere in order to circumvent veto players And they employed strategic organisation and communication in the public sphere in order to dampen the risk of being punished by voters for the implemented policies

Austerity and Anarchy: Budget Cuts and Social Unrest in Europe,

Abstract: Does fiscal consolidation lead to social unrest? Using cross-country evidence for the period 1919 to 2008, we examine the extent to which societies become unstable after budget cuts. The results show a clear correlation between fiscal retrenchment and instability. We test if the relationship simply reflects economic downturns, and conclude that this is not the case. While autocracies and democracies show a broadly similar responses to budget cuts, countries with more constraints on the executive are less likely to see unrest after austerity measures. Growing media penetration does not strengthen the effect of cut-backs on the level of unrest.

Uneven public transportation development in neoliberalizing Chicago, USA

Abstract: This paper examines how neoliberal urbanization has transformed the role of public transportation into an entrepreneurial tool that creates place-based advantages for capital in global cities. Using Chicago, USA as a case study, I examine new transit-construction projects focused on Chicago's downtown Central Area—the Express Airport Service and Circle Line—to demonstrate how public transit infrastructure is increasingly deployed as a means to attract global capital as well as enhance affluent residents' and tourists' rights to the city. I contrast these projects to the lack of new public transit investment for areas outside of Chicago's downtown global city showcase zone. Declining service levels and unreliable transit infrastructure due to the neoliberal retrenchment in the public sector are also constricting working people's right to the city. Taken together, these trends express the nature of uneven public transit development emerging in the neoliberal city of Chicago.

Maneuvers of Whiteness: ‘Diversity’ as a Mechanism of Retrenchment in the Affirmative Action Discourse:

Abstract: Through a discourse analysis of three textual sources within elite law schools, we suggest that the white racial frame and the diversity construct are key mechanisms in the process of stalling racial reform by imposing tacit boundaries around the discourse surrounding progressive racial policies. We contend that this limits their effectiveness, resulting in the retrenchment of white racial privilege and power and that this happens without any explicit expression of racial animosity by whites participating in the discourse. To illustrate this process, we analyze the discourse concerning affirmative action, a policy designed to end racial discrimination in and redistribute resources related to employment and education. We focus on the institutional setting of elite law schools both because of its socializing influence on those who will make and interpret affirmative action law and because it represents an institution in which the policy may be utilized in student selection and faculty hiring.

The Dual Transformation of Social Protection and Human Capital: Comparing Britain and Germany

Abstract: Britain and Germany have been experiencing significant changes in the nature of work and welfare since the 1990s. Although important differences have remained, there have been compelling indications of a dual transformation of welfare constituted not only by a far-reaching retrenchment in unemployment insurance but also by a remarkable expansion in family policy. These developments have their functional underpinnings in accelerating de-industrialization with a declining proportion of the male workforce with specific skills as well as in service sector growth and rising female labor market participation characterized by an increase in general skills. As the aggregate effect of economic fluctuations in industrial production has diminished over time, the relative incidence of work disruptions which have arisen from maternity and child-rearing has increased substantially. This dual transformation in welfare and employment patterns suggests that the process of de-industrialization has initiated significant path adjustments unanticipated in the existing comparative political economy literature.

Business, skills and the welfare state: the political economy of employment-oriented family policy in Britain and Germany

Abstract: Family policies have been expanded in many OECD countries, whilst developments along other welfare state dimensions have been characterized by retrenchment. Although the contribution of gender analyses of the welfare state to a better understanding of family policies is widely acknowledged, the literature so far has largely failed to provide a comparative account explaining the recent expansions of employment-oriented family policies in countries that were previously categorized as pursuing policies in accordance with the strong male breadwinner model. This article aims to make a contribution to the comparative literature by investigating the socioeconomic conditions and politics of employment-oriented family policy expansions in Britain and Germany since the 1990s. We pay special attention to processes of post-industrialisation and especially changed skill compositions as well as the role of key policy actors, with a special focus on organized business.

Postretrenchment Politics: Policy Feedback in Chile's Health and Pension Reforms

Abstract: Through a comparison of three periods of health and pension reform in Chile, this article develops an explanation for the incremental form of social policy change that some Latin American nations have witnessed in recent years, despite the dramatic rise of left governments. It describes “postretrenchment politics,” which constitutes a realignment in the way politics plays out in countries that have undergone social policy retrenchment. In postretrenchment politics, the strengthened position of private business interests, combined with political learning legacies and lock-in effects generated by reforms, results in incremental political change, despite renewed efforts by left parties to address inequality. Global capital also plays an important contextual role, and may influence postretrenchment politics. In postretrenchment politics, newly reformed systems may achieve greater equity, but they do so in fragmented form.

East Nashville skyline

Abstract: This article examines a familiar urban dynamic — gentrification — in the less familiar setting of Nashville, Tennessee. In recent years, gentrification processes are accompanied by legitimating appeals to civic design trends and new cultural dynamics, particularly those associated with the New Urbanism and the promotion of ‘‘creative’’ city environments nurturing educated and culturally savvy residents. These discourses have increasingly come to define contemporary ‘‘progressive’’ urban policy, promoting values of diversity and cosmopolitanism while eliding standard concerns over displacement and the retrenchment of state services. Beginning with a dramatic street-level encounter between old and new styles of urban development, this account addresses the juxtaposition of a low density district targeted for redevelopment on Nashville’s East Side with the obdurate presence of neighboring public housing projects, inscribing competing political and cultural imaginaries in the built environment. It contributes...

The Political Economy of Pension Reform in Europe

Abstract: Publisher Summary Pension reform has become central to the European social policy agenda—first in terms of construction and expansion, then increasingly in terms of consolidation and retrenchment. Thus, pension systems (both public and private) need to be viewed in a broader political economy framework. Their major purpose is to provide income security to retirees. Pension systems form a major part of the political economy of current societies. In the political economy of European welfare states, both the Bismarckian and Beveridgean types of pension systems were used for similar purposes, such as for the institutionalization of retirement and the management of the labor market. There is broad agreement on the list of challenges that pension schemes now face, but disagreement on how these challenges should be interpreted, what impetus for reform they should provide, and, most of all, what the reforms should be. The willingness of citizens to pay taxes still varies widely among nation-states. Pensions have a peculiar place in as they are the one policy area where a productivist emphasis seems inappropriate and income protection remains paramount. As pension reforms have strengthened the link between contribution history and benefits, the impact of working careers on future entitlements has become more salient.

Shifting subjects of health‐care: Placing ‘medical tourism’ in the context of Malaysian domestic health‐care reform

Abstract: ‘Medical tourism’ has frequently been held to unsettle naturalised relationships between the state and its citizenry. Yet in casting ‘medical tourism’ as either an outside ‘innovation’ or ‘invasion’, scholars have often ignored the role that the neoliberal retrenchment of social welfare structures has played in shaping the domestic health-care systems of the ‘developing’ countries recognised as international medical travel destinations. While there is little doubt that ‘medical tourism’ impacts destinations' health-care systems, it remains essential to contextualise them. This paper offers a reading of the emergence of ‘medical tourism’ from within the context of ongoing health-care privatisation reform in one of today's most prominent destinations: Malaysia. It argues that ‘medical tourism’ to Malaysia has been mobilised politically both to advance domestic health-care reform and to cast off the country's ‘underdeveloped’ image not only among foreign patient-consumers but also among its own nationals, who are themselves increasingly envisioned by the Malaysian state as prospective health-care consumers

Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2008

Abstract: Does fiscal consolidation lead to social unrest? Using cross-country evidence for the period 1919 to 2008, we examine the extent to which societies become unstable after budget cuts. The results show a clear correlation between fiscal retrenchment and instability. We test if the relationship simply reflects economic downturns, and conclude that this is not the case. While autocracies and democracies show a broadly similar responses to budget cuts, countries with more constraints on the executive are less likely to see unrest after austerity measures. Growing media penetration does not strengthen the effect of cut-backs on the level of unrest.

Nationalism, development, and social policy: The politics of nation-building in sub-Saharan Africa

Abstract: This article examines the relationship between nation-building and social policy in post-independence sub-Saharan Africa (SSA). It argues that post-independence nationalist leaders used health, housing, and education programmes to foster a sense of national unity that would transcend the existing ethnic divisions created by the arbitrary drawing of state boundaries during colonization. Yet, in SSA, the neo-liberal turn of the 1980s favoured the decline of state-level integration and solidarity, which helped trigger territorial mobilization and fragmentation. As a consequence, the politics of welfare retrenchment in SSA does more than simply reduce benefits and increase inequalities; it also potentially weakens national unity.

Conditional contraction: Globalisation and capitalist systems

Abstract: The effect of globalisation on social spending is one of the most intensely studied issues in the political economy literature. Until recently, conventional wisdom held that globalisation leads governments to expand social spending to compensate workers for increasing risk exposure. The latest research shows, however, that globalisation has become strongly associated with spending cutbacks since the late 1980s. This article adds to this research by arguing that the negative impact of globalisation is conditioned on the capitalist system in different countries. In coordinated market economies (CMEs), employers are dependent on the willingness of the workforce to invest in specific skills and therefore become supportive of extensive social spending. Not so in liberal market economies (LMEs), where employers are much less dependent on social spending because the workforce in general invests less in specific skills. Employers in LMEs are therefore likely to use increasing globalisation as a means to push through retrenchment, whereas employers in CMEs are not. This argument is tested in a time-series cross-section regression analysis, which clearly supports it.

The Risk of Social Policy?: The electoral consequences of welfare state retrenchment and social policy performance in OECD countries

Abstract: 1 Introduction 2Welfare State Research: The Theoretical Background for the Research Question 3 Electoral Research and Issue Voting: The Theoretical Background for the Analyses 4 The Context: More Theoretical Background for the Analyses 5 Research Strategy, Design and Method 6 The Salience and Performance of Social Policy in Times of Permanent Austerity 7 The Impact of Social Policy Attitudes on the Incumbent Vote 8 Welfare State Retrenchment and the Incumbent Performance on Social Policy 9 Re-Election at Stake? The Impact of Social Policy on the Election Outcome 10 Discussion of Results and Conclusion

Crisis and Welfare State Change in the Netherlands

Abstract: The current economic crisis is assumed to create new pressures for the welfare state. In this article we investigate to what extent the crisis leads to changes in Dutch welfare state policies and institutions. Usually these changes are operationalized in terms of retrenchment (cost reduction) or restructuring (institutions). We focus, however, on developments in social rights in the hope of gaining better insight into the content and extent of policy change. This perspective combines attention for costs and institutional structure with attention for the content and substance of social rights. We start by analyzing the development of social rights in the Dutch welfare state as a reaction to the economic crisis of the 1970s and 1980s. Consequently, we will analyze current perceptions of social risks and social rights as well as how we think these perceptions will be affected by the pressures brought on by the economic crisis of 2008–09. Using an institutional perspective, we examine the consequences of the current economic crisis for perceptions of social citizenship and entitlement to social risk protection within the welfare state.

Social partners and the welfare state: Recalibration, privatization or collectivization of social risks?

Abstract: What has been the extent of welfare state retrenchment? One strand of the comparative political economy literature argues that welfare states have not undergone outright retrenchment, but recalibra...

Progressive Policy Making in a Conservative Age? Civil Rights and the Politics of Federal Education Standards, Testing, and Accountability

Abstract: Recent research on the politics of contemporary policymaking has centered the contributions of diverse conservative forces. Conservatives are viewed as the chief proponents of marketizing reforms featuring retrenchment of social programs, privatization of social services, deregulation, and tax reduction, as well as of disciplining policies that impose more stringent behavioral requirements on beneficiaries, employ testing and reporting to monitor recipient performance, and impose sanctions for non-compliance. These developments are often viewed as fostering a less egalitarian politics, especially for historically disadvantaged groups. I examine the rise of standards, testing, accountability, and limited school choice policies in federal education policymaking, which are widely viewed as embodying the same conservative interests and ideologies that have shaped policymaking in other areas. Contrary to this conventional wisdom, I show that certain civil rights organizations, not conservative forces, provided much of the impetus for federal standards, testing, and accountability reforms, which they viewed as measures for raising the achievement of disadvantaged students. Tracing the origins and consequences of these policies, my research reveals that entrepreneurial progressives can achieve significant legislative successes that they believe will accomplish progressive objectives. However, these policy victories have yielded mixed substantive results, and they have also unleashed complex and unanticipated consequences.

Non-profit and Community-based Green Space Production in Milwaukee: Maintaining a Counter-weight within Neo-liberal Urban Environmental Governance

Abstract: This paper examines the rise of civic participation, a feature of neo-liberal privatisation, in the context of Milwaukee's urban green space management. Using in-depth semi-structured interviews and archival research, it presents the argument that civic organisations are not just ‘neo-liberal artifacts’ that facilitate trends of privatisation and commodification of and state retrenchment from urban environmental resources. Utilising a range of strategies, they simultaneously resist those trends, often ameliorating the socio-environmentally destructive effects of neo-liberal processes. Highlighting some of these strategies, this paper suggests that different kinds of non-profit organisations intersect with neo-liberalism differently to provide a variety of enabling opportunities for counter-neoliberalism.

Assessing civil society in Putin’s Russia: The plight of women’s crisis centers

Abstract: The article assesses civil society in Putin’s Russia through the lens of the small social movement working against gender violence. Based on questionnaires distributed to movement organizations in 2008–2009, we find significant retrenchment among the NGO segment of the movement, adding evidence to the claim of Russia’s turn toward authoritarianism. However, this innovative, midlevel analysis--not the typical society-wide surveys nor the small number participant observation--also shows that the women’s crisis center movement has made some in-roads in transforming the state, revealing that some democratic opportunities remain at the local level.

Capital Flow Waves: Surges, Stops, Flight, and Retrenchment

Abstract: This paper analyzes waves in international capital flows. We develop a new methodology for identifying episodes of extreme capital flow movements using data that differentiates activity by foreigners and domestics. We identify episodes of "surges" and "stops" (sharp increases and decreases, respectively, of gross inflows) and "flight" and "retrenchment" (sharp increases and decreases, respectively, of gross outflows). Our approach yields fundamentally different results than the previous literature that used measures of net flows. Global factors, especially global risk, are significantly associated with extreme capital flow episodes. Contagion, whether through trade, banking, or geography, is also associated with stop and retrenchment episodes. Domestic macroeconomic characteristics are generally less important, and we find little association between capital controls and the probability of having surges or stops driven by foreign capital flows. The results provide insights for different theoretical approaches explaining crises and capital flow volatility.

Economic Crisis and Welfare Retrenchment: Comparing Irish Policy Responses in the 1970s and 1980s with the Present

Abstract: This article juxtaposes the impact of the current economic crisis on the Irish welfare state with the impact of the international economic crisis of the 1970s which had a sustained effect in Ireland during much of the 1980s. The analysis focuses on the consequences for social security programmes during both crisis periods, each of which was marked by intractable socio-economic and budgetary pressures. However, while elements of welfare retrenchment can be observed during the economic crisis of the 1980s, these appeared more difficult to instigate and sustain in comparison to the present period. As an inter-temporal qualitative case study, this article aims to identify key drivers influencing why welfare retrenchment has more readily occurred and, it would appear so far, at a potentially deeper level than during the 1980s. As of yet the economic crisis is unabated, and as welfare state changes typically occur in relatively slow motion (Castles 2010), outcomes of the process remain uncertain. However, it seems that if Ireland continues on the path it has instigated, the liberal disposition of the Irish welfare state will intensify.