"Globalizing the Long Intellectual History of International Political Economy" Eric Helleiner pe... more "Globalizing the Long Intellectual History of International Political Economy" Eric Helleiner penned a momentous book that stands to define the way the IPE community sees itself. This tour de force poses a dramatic and page-turning challenge to the memorialization of IPE in the existing classics (e.g. Cohen 2008) as a post-1945 field of Western academia organized intellectually around three orthodoxies: liberalism, neo-mercantilism and Marxism. While discussions of the blind spots in IPE led some to distinguish between conceptual and empirical blind spots (Pauly 2021), this books tells us we have had intellectual blind spots all along.
After the Great Financial Crisis the European Union forged a new economic governance (NEG) regime... more After the Great Financial Crisis the European Union forged a new economic governance (NEG) regime whose prescriptions were encased in a yearly country-specific policy prescriptions, surveillance, and enforcement known as the (European) Semester. A rich literature on the Semester showed that NEG was not an implacable revolution from above but an opportunity structure inviting local translations through technocratic appropriations, as well as labor union action and social movements. However, Politicising Commodification is the first book to systematically study the interplay between the national and transnational social and economic processes engendered by NEG across commodifying and decommodifying EU integration mechanisms. As such, the book refreshingly moves us beyond Fritz Scharpf's distinction of negative and positive integration to one comparing horizontal and vertical integration modes. It also takes us beyond the canonical opposition between state-centered (intergovernmental or supranational) paradigms of EU law and political science, into a corporate-centered approach that likens the NEG to a transnational corporation.
This chapter identifies the analytical value added that a financialization lens brings for the es... more This chapter identifies the analytical value added that a financialization lens brings for the established growth regimes approach. The main argument is that each of the growth regimes theorized by Bacarro and Pontusson have distinct financialization dynamics that inform the observed variation in the key aspect of the relevant literature: the contribution of exports and consumption to GDP growth in each of the growth regimes. The chapter suggests that all growth regimes have been transformed by financialization, leading to the recovery of corporate profits even as capital investment declined. However, the domestic translation of financialization practices in terms of depth and mode was consequential for the balancing of consumption and exports in real-existing growth regimes. Thus, the extent and mode of financialization explains why Sweden has higher capital investment than all the other cases while still projecting robust consumption growth, why consumption has been so robust in Britain but not in Italy, and why the German growth regime was constrained to stay competitive in export markets by repressing consumption.
Who controls global policy debates on shadow banking regulation? By looking at the policy recomme... more Who controls global policy debates on shadow banking regulation? By looking at the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board, we show how experts tied to these institutions secured control over how shadow banking is treated. In so doing, these technocrats reinforced each other's expertise and excluded some potential competitors (legal scholars), coopted others (select Fed and elite academic economists). The findings have important implications for studying the relationship between IOs technocrats and experts from other professional fields.
The state, inequality and the politics of economic ideas: three blind spots in shadow banking blo... more The state, inequality and the politics of economic ideas: three blind spots in shadow banking blogs.lse.ac.uk /businessreview/2017/03/24/the-state-inequality-and-the-politics-of-economic-ideas-3-blindspots-in-shadow-banking/ Shadow banking has become a systemic pillar of global finance. A typical map shows a complex network of shadow entities such as highly levered off-balance-sheet vehicles, broker-dealers, private equity firms, money market funds or hedge funds. Yet (large) regulated banks also moved in the shadows, driven by a combination of yield, regulatory and tax arbitrage in order to engage in securitisation (or transformation of loans into securities that could be traded) and repo markets (wholesale markets where financial institutions raise funding using securities as collateral). Shadow banking has proved to be extremely dangerous. Between 2007 and 2011, it wreaked havoc with global finance and the fiscal sustainability of the nation-state. A solid consensus now connects the Lehman crisis and the European sovereign debt crisis to runs on shadow banking. Yet the growing literature on shadow bankingspanning from economics to law and political science-shares three blind spots: the state, inequality and the politics of economic ideas. In a recent interdisciplinary forum we tried to speak to these critical but ignored facets of shadow banking.
Who controls global policy debates on shadow banking regulation? By looking at the policy recomme... more Who controls global policy debates on shadow banking regulation? By looking at the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board, we show how experts tied to these institutions secured control over how shadow banking is treated. In so doing, these technocrats reinforced each other’s expertise and excluded some potential competitors (legal scholars), coopted others (select Fed and elite academic economists). The findings have important implications for studying the relationship between IOs technocrats and experts from other professional fields.
ABSTRACT There is little systematic work on how much the core of mainstream macroeconomics has ch... more ABSTRACT There is little systematic work on how much the core of mainstream macroeconomics has changed since the crisis of 2008 and even less on what explains patterns of stability and change. This paper addresses this gap by first, mapping out debates over the core assumption of rational expectations in high-prestige academic publications and the research of central banks of systemic importance and second, deploying a sociological perspective to assess the various forms of capital deployed by orthodox defenders, radical challengers and constructive critics of this assumption. The paper finds that although the core of modern macro has seen a more robust radical challenge than one might have expect, the defense of rational expectations remained quantitatively dominant and substantively elastic. While radical challengers had access to significant material resources and symbolic capital, orthodox players control the institutions of the economics profession via editorial boards and refereeing for the top journals. As such, the orthodox exercise a strong gatekeeping function that allows some pluralism yet also goes some way toward explaining their continued intellectual dominance.
Who controls global policy debates on shadow banking regulation, with what ideas and how? By look... more Who controls global policy debates on shadow banking regulation, with what ideas and how? By looking at the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board, we show how experts tied to these institutions secured control over how shadow banking is treated. The evidence suggests that their experts institutionalized a bland reformism opposed to both strong and 'light touch' regulation at the core of the emerging regulatory regime. In so doing, these international organizations reinforced each other's expertise, excluded some potential competitors (legal scholars), coopted others (select Fed and elite academic economists) and deployed measurement, mandate and status strategies to assert issue control. The findings have important implications for studying the relationship between IOs technocrats and experts from other professional fields.
Juan Linz and Alfred Stepan’s opus on democratic transition and consolidation put Spain and Roman... more Juan Linz and Alfred Stepan’s opus on democratic transition and consolidation put Spain and Romania at the extreme ends of these processes and paid little attention to the domestic and external economic constraints on the transition process. This paper interrogates these claims. It shows that in retrospect Spain looks a lot less exemplary and Romania a lot less hopeless than this iconic contribution suggested at the time. Moreover, while external economic shocks and local attempts to buffer them through social compensation shaped both transitions, Romanian governments faced balance of payments crises and international policy conditionality constraints, while their Spanish counterparts did not. This difference invites a greater appreciation of the role of political economy analyses when comparing the policy options of political elites ruling in times of democratic transition and consolidation.
This article examines a neglected structural transformation in European finance: the growing impo... more This article examines a neglected structural transformation in European finance: the growing importance of government debt as collateral for Europe's repo markets, where banks borrow cash against collateral. Seduced by the promises of repo market-driven financial integration, the EU institutions and Member States encouraged private finance to generate its own architecture for the European repo market in the early years of the euro, sidelining known problems about systemic fragilities. These fragilities materialized after Lehman Brothers' collapse and were exacerbated by the ECB's collateral policies. The European sovereign debt crisis shows that governments, just like private asset issuers, can rapidly become vulnerable to repo pro-cyclicality and collateral crises.
Abstract: This paper argues that scholarship on the varieties of capitalism could provide a more ... more Abstract: This paper argues that scholarship on the varieties of capitalism could provide a more complete understanding of fiscal policy convergence in the Eurozone after 2010 if it better examined the interdependencies between banks and sovereigns. Recently, this scholarship has explained fiscal convergence through a global imbalances framework. While the interaction between coordinated and liberal capitalisms, and their distinctive macroeconomic policy preferences, generates global imbalances, rebalancing can only ...
Who controls global policy debates on shadow banking regulation? We show how experts secured cont... more Who controls global policy debates on shadow banking regulation? We show how experts secured control over how issues in shadow banking regulation are treated by examining the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board. The evidence suggests that IO experts embedded a bland reformism opposed to both strong and 'light touch' regulation at the core of the emerging regulatory regime. Technocrats reinforced each other's expertise, excluded some potential competitors (legal scholars), coopted others (select Fed and elite academic economists), and deployed measurement, mandate, and status strategies to assert issue control. In the field of shadow banking regulation, academic economists' influence came from their credibility as arbitrageurs between several professional fields rather than their intellectual output. The findings have important implications for how we study the relationship between IO technocrats and experts from other professional fields.
Fresh food supply chains in Europe's transnational agribusinesses depend on cheap, non-unioni... more Fresh food supply chains in Europe's transnational agribusinesses depend on cheap, non-unionised, and privately managed labour from low-wage eastern European countries. The costs versus benefits of this phenomenon are under-studied. By examining seasonal farm migration from Romania to Germany, we argue that the Covid-19 pandemic is, for farmworkers, a Janus-faced event. On the one hand, it has worsened the precarity of migrant farmworkers. Changes in the German state's pay legislation that excluded workers from social benefits, and the reluctance of the German state to enforce labour legislation to the full in the early stages of the pandemic sharpened what we have termed the structural disempowerment of migrant farmworkers. Romanian seasonal workers have had little choice but to implicitly subsidise the costs of German farm products. At the same time, the health crisis has made their work visible and led to processes that challenge the perception of migrant workers as passi...
Over the past two decades the spread of ideas and policies associated with the Washington Consens... more Over the past two decades the spread of ideas and policies associated with the Washington Consensus (WC) has captured the attention of political economists. As a systemic feature of the global economy this process of diffusion has merited such scholarly attention. However, the systemic shock of the Great Recession has called into question the oft-noted convergence of rising economic powers such as Brazil, Russia, India and China (BRICs) along with their supposed relationship to the WC policy paradigm. Indeed, the crisis has brought to the fore the question of whether the BRICs have 'grown apart' from both the ideas and the policies prepared for them by Washington-based institutions. To date there has been no systematic scholarly effort aimed at analyzing the spread of WC ideas and policies in relation to the rise of the BRICs. This special issue attempts to fill in this gap through six contributions that bring together scholars interested in the political economy of development and the sociology of ideational and institutional change. Their main finding is that the BRICs attempted to balance their adoption of select parts of the WC template while defending and often reinventing the relevance of state-led development policies under the guise of being compliant with the WC itself. In so doing, they have neither pioneered a post-neoliberal transformation, nor have they proved to be simply forces for the continuation of WC ideas and policies in the global economy. Council. Despite this, the IBSA have remained in the shadows of public and scholarly attention while the BRICS have been in a great deal of limelight (Emerson 2012). 2 Since 2011 the BRICS have had several annual summits and even announced they might establish a multilateral bank. So far, beyond a number of aspirational statements, attempts at further institutionalization have been delayed.
Has a post-neoliberal policy regime emerged from the challenges to neoliberalism that have accomp... more Has a post-neoliberal policy regime emerged from the challenges to neoliberalism that have accompanied the rise of nationalism and populism in some Eastern and Central European countries? Why has t...
The Political Economy of National-Neoliberalism, 2021
Has a post-neoliberal policy regime emerged from the the challenges to neoliberalism that accompa... more Has a post-neoliberal policy regime emerged from the the challenges to neoliberalism that accompanied the rise of nationalism and populism in some Eastern and Central European countries? Why has the political organization of these challenges to neoliberalism endured in some countries but not in others? By drawing on a mix of primary and secondary sources culled from the institutional, political and economic realities of Hungary and Romania, this paper suggests makes two claims. First, in these challenges amounted to a distinctive variety of neoliberalism: "national-neoliberalism." At its core one finds the slightly modified old goals of neoliberal orthodoxy embedded in a protective cocoon of orthodox and unorthodox policy instruments. The second claim of the paper is that the political organization national-neoliberal project was resilient in Hungary but not in Romania not only because the "national" elements of national-neoliberalism had protections against the bond markets, but also because the proponents of this project could manage a broader social bloc and deployed techno-political capabilities that bolstered their political power relative to that of challengers and buffered the impact of external structural forces. As such, the paper rejects the hypothesis about a nationalist-heterodox successor to neoliberalism and provides a comprehensive theory of policy resilience for nationalneoliberalism.
"Globalizing the Long Intellectual History of International Political Economy" Eric Helleiner pe... more "Globalizing the Long Intellectual History of International Political Economy" Eric Helleiner penned a momentous book that stands to define the way the IPE community sees itself. This tour de force poses a dramatic and page-turning challenge to the memorialization of IPE in the existing classics (e.g. Cohen 2008) as a post-1945 field of Western academia organized intellectually around three orthodoxies: liberalism, neo-mercantilism and Marxism. While discussions of the blind spots in IPE led some to distinguish between conceptual and empirical blind spots (Pauly 2021), this books tells us we have had intellectual blind spots all along.
After the Great Financial Crisis the European Union forged a new economic governance (NEG) regime... more After the Great Financial Crisis the European Union forged a new economic governance (NEG) regime whose prescriptions were encased in a yearly country-specific policy prescriptions, surveillance, and enforcement known as the (European) Semester. A rich literature on the Semester showed that NEG was not an implacable revolution from above but an opportunity structure inviting local translations through technocratic appropriations, as well as labor union action and social movements. However, Politicising Commodification is the first book to systematically study the interplay between the national and transnational social and economic processes engendered by NEG across commodifying and decommodifying EU integration mechanisms. As such, the book refreshingly moves us beyond Fritz Scharpf's distinction of negative and positive integration to one comparing horizontal and vertical integration modes. It also takes us beyond the canonical opposition between state-centered (intergovernmental or supranational) paradigms of EU law and political science, into a corporate-centered approach that likens the NEG to a transnational corporation.
This chapter identifies the analytical value added that a financialization lens brings for the es... more This chapter identifies the analytical value added that a financialization lens brings for the established growth regimes approach. The main argument is that each of the growth regimes theorized by Bacarro and Pontusson have distinct financialization dynamics that inform the observed variation in the key aspect of the relevant literature: the contribution of exports and consumption to GDP growth in each of the growth regimes. The chapter suggests that all growth regimes have been transformed by financialization, leading to the recovery of corporate profits even as capital investment declined. However, the domestic translation of financialization practices in terms of depth and mode was consequential for the balancing of consumption and exports in real-existing growth regimes. Thus, the extent and mode of financialization explains why Sweden has higher capital investment than all the other cases while still projecting robust consumption growth, why consumption has been so robust in Britain but not in Italy, and why the German growth regime was constrained to stay competitive in export markets by repressing consumption.
Who controls global policy debates on shadow banking regulation? By looking at the policy recomme... more Who controls global policy debates on shadow banking regulation? By looking at the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board, we show how experts tied to these institutions secured control over how shadow banking is treated. In so doing, these technocrats reinforced each other's expertise and excluded some potential competitors (legal scholars), coopted others (select Fed and elite academic economists). The findings have important implications for studying the relationship between IOs technocrats and experts from other professional fields.
The state, inequality and the politics of economic ideas: three blind spots in shadow banking blo... more The state, inequality and the politics of economic ideas: three blind spots in shadow banking blogs.lse.ac.uk /businessreview/2017/03/24/the-state-inequality-and-the-politics-of-economic-ideas-3-blindspots-in-shadow-banking/ Shadow banking has become a systemic pillar of global finance. A typical map shows a complex network of shadow entities such as highly levered off-balance-sheet vehicles, broker-dealers, private equity firms, money market funds or hedge funds. Yet (large) regulated banks also moved in the shadows, driven by a combination of yield, regulatory and tax arbitrage in order to engage in securitisation (or transformation of loans into securities that could be traded) and repo markets (wholesale markets where financial institutions raise funding using securities as collateral). Shadow banking has proved to be extremely dangerous. Between 2007 and 2011, it wreaked havoc with global finance and the fiscal sustainability of the nation-state. A solid consensus now connects the Lehman crisis and the European sovereign debt crisis to runs on shadow banking. Yet the growing literature on shadow bankingspanning from economics to law and political science-shares three blind spots: the state, inequality and the politics of economic ideas. In a recent interdisciplinary forum we tried to speak to these critical but ignored facets of shadow banking.
Who controls global policy debates on shadow banking regulation? By looking at the policy recomme... more Who controls global policy debates on shadow banking regulation? By looking at the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board, we show how experts tied to these institutions secured control over how shadow banking is treated. In so doing, these technocrats reinforced each other’s expertise and excluded some potential competitors (legal scholars), coopted others (select Fed and elite academic economists). The findings have important implications for studying the relationship between IOs technocrats and experts from other professional fields.
ABSTRACT There is little systematic work on how much the core of mainstream macroeconomics has ch... more ABSTRACT There is little systematic work on how much the core of mainstream macroeconomics has changed since the crisis of 2008 and even less on what explains patterns of stability and change. This paper addresses this gap by first, mapping out debates over the core assumption of rational expectations in high-prestige academic publications and the research of central banks of systemic importance and second, deploying a sociological perspective to assess the various forms of capital deployed by orthodox defenders, radical challengers and constructive critics of this assumption. The paper finds that although the core of modern macro has seen a more robust radical challenge than one might have expect, the defense of rational expectations remained quantitatively dominant and substantively elastic. While radical challengers had access to significant material resources and symbolic capital, orthodox players control the institutions of the economics profession via editorial boards and refereeing for the top journals. As such, the orthodox exercise a strong gatekeeping function that allows some pluralism yet also goes some way toward explaining their continued intellectual dominance.
Who controls global policy debates on shadow banking regulation, with what ideas and how? By look... more Who controls global policy debates on shadow banking regulation, with what ideas and how? By looking at the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board, we show how experts tied to these institutions secured control over how shadow banking is treated. The evidence suggests that their experts institutionalized a bland reformism opposed to both strong and 'light touch' regulation at the core of the emerging regulatory regime. In so doing, these international organizations reinforced each other's expertise, excluded some potential competitors (legal scholars), coopted others (select Fed and elite academic economists) and deployed measurement, mandate and status strategies to assert issue control. The findings have important implications for studying the relationship between IOs technocrats and experts from other professional fields.
Juan Linz and Alfred Stepan’s opus on democratic transition and consolidation put Spain and Roman... more Juan Linz and Alfred Stepan’s opus on democratic transition and consolidation put Spain and Romania at the extreme ends of these processes and paid little attention to the domestic and external economic constraints on the transition process. This paper interrogates these claims. It shows that in retrospect Spain looks a lot less exemplary and Romania a lot less hopeless than this iconic contribution suggested at the time. Moreover, while external economic shocks and local attempts to buffer them through social compensation shaped both transitions, Romanian governments faced balance of payments crises and international policy conditionality constraints, while their Spanish counterparts did not. This difference invites a greater appreciation of the role of political economy analyses when comparing the policy options of political elites ruling in times of democratic transition and consolidation.
This article examines a neglected structural transformation in European finance: the growing impo... more This article examines a neglected structural transformation in European finance: the growing importance of government debt as collateral for Europe's repo markets, where banks borrow cash against collateral. Seduced by the promises of repo market-driven financial integration, the EU institutions and Member States encouraged private finance to generate its own architecture for the European repo market in the early years of the euro, sidelining known problems about systemic fragilities. These fragilities materialized after Lehman Brothers' collapse and were exacerbated by the ECB's collateral policies. The European sovereign debt crisis shows that governments, just like private asset issuers, can rapidly become vulnerable to repo pro-cyclicality and collateral crises.
Abstract: This paper argues that scholarship on the varieties of capitalism could provide a more ... more Abstract: This paper argues that scholarship on the varieties of capitalism could provide a more complete understanding of fiscal policy convergence in the Eurozone after 2010 if it better examined the interdependencies between banks and sovereigns. Recently, this scholarship has explained fiscal convergence through a global imbalances framework. While the interaction between coordinated and liberal capitalisms, and their distinctive macroeconomic policy preferences, generates global imbalances, rebalancing can only ...
Who controls global policy debates on shadow banking regulation? We show how experts secured cont... more Who controls global policy debates on shadow banking regulation? We show how experts secured control over how issues in shadow banking regulation are treated by examining the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board. The evidence suggests that IO experts embedded a bland reformism opposed to both strong and 'light touch' regulation at the core of the emerging regulatory regime. Technocrats reinforced each other's expertise, excluded some potential competitors (legal scholars), coopted others (select Fed and elite academic economists), and deployed measurement, mandate, and status strategies to assert issue control. In the field of shadow banking regulation, academic economists' influence came from their credibility as arbitrageurs between several professional fields rather than their intellectual output. The findings have important implications for how we study the relationship between IO technocrats and experts from other professional fields.
Fresh food supply chains in Europe's transnational agribusinesses depend on cheap, non-unioni... more Fresh food supply chains in Europe's transnational agribusinesses depend on cheap, non-unionised, and privately managed labour from low-wage eastern European countries. The costs versus benefits of this phenomenon are under-studied. By examining seasonal farm migration from Romania to Germany, we argue that the Covid-19 pandemic is, for farmworkers, a Janus-faced event. On the one hand, it has worsened the precarity of migrant farmworkers. Changes in the German state's pay legislation that excluded workers from social benefits, and the reluctance of the German state to enforce labour legislation to the full in the early stages of the pandemic sharpened what we have termed the structural disempowerment of migrant farmworkers. Romanian seasonal workers have had little choice but to implicitly subsidise the costs of German farm products. At the same time, the health crisis has made their work visible and led to processes that challenge the perception of migrant workers as passi...
Over the past two decades the spread of ideas and policies associated with the Washington Consens... more Over the past two decades the spread of ideas and policies associated with the Washington Consensus (WC) has captured the attention of political economists. As a systemic feature of the global economy this process of diffusion has merited such scholarly attention. However, the systemic shock of the Great Recession has called into question the oft-noted convergence of rising economic powers such as Brazil, Russia, India and China (BRICs) along with their supposed relationship to the WC policy paradigm. Indeed, the crisis has brought to the fore the question of whether the BRICs have 'grown apart' from both the ideas and the policies prepared for them by Washington-based institutions. To date there has been no systematic scholarly effort aimed at analyzing the spread of WC ideas and policies in relation to the rise of the BRICs. This special issue attempts to fill in this gap through six contributions that bring together scholars interested in the political economy of development and the sociology of ideational and institutional change. Their main finding is that the BRICs attempted to balance their adoption of select parts of the WC template while defending and often reinventing the relevance of state-led development policies under the guise of being compliant with the WC itself. In so doing, they have neither pioneered a post-neoliberal transformation, nor have they proved to be simply forces for the continuation of WC ideas and policies in the global economy. Council. Despite this, the IBSA have remained in the shadows of public and scholarly attention while the BRICS have been in a great deal of limelight (Emerson 2012). 2 Since 2011 the BRICS have had several annual summits and even announced they might establish a multilateral bank. So far, beyond a number of aspirational statements, attempts at further institutionalization have been delayed.
Has a post-neoliberal policy regime emerged from the challenges to neoliberalism that have accomp... more Has a post-neoliberal policy regime emerged from the challenges to neoliberalism that have accompanied the rise of nationalism and populism in some Eastern and Central European countries? Why has t...
The Political Economy of National-Neoliberalism, 2021
Has a post-neoliberal policy regime emerged from the the challenges to neoliberalism that accompa... more Has a post-neoliberal policy regime emerged from the the challenges to neoliberalism that accompanied the rise of nationalism and populism in some Eastern and Central European countries? Why has the political organization of these challenges to neoliberalism endured in some countries but not in others? By drawing on a mix of primary and secondary sources culled from the institutional, political and economic realities of Hungary and Romania, this paper suggests makes two claims. First, in these challenges amounted to a distinctive variety of neoliberalism: "national-neoliberalism." At its core one finds the slightly modified old goals of neoliberal orthodoxy embedded in a protective cocoon of orthodox and unorthodox policy instruments. The second claim of the paper is that the political organization national-neoliberal project was resilient in Hungary but not in Romania not only because the "national" elements of national-neoliberalism had protections against the bond markets, but also because the proponents of this project could manage a broader social bloc and deployed techno-political capabilities that bolstered their political power relative to that of challengers and buffered the impact of external structural forces. As such, the paper rejects the hypothesis about a nationalist-heterodox successor to neoliberalism and provides a comprehensive theory of policy resilience for nationalneoliberalism.
ARTICLE COMMENTARY| MAY 20 2021
Central Banking in Pandemic Times
Collections: Special Collectio... more ARTICLE COMMENTARY| MAY 20 2021 Central Banking in Pandemic Times Collections: Special Collection: Global Political Economy of COVID-19 , Section: Political Economy, Markets, and Institutions Cornel Ban 1.cba.ioa@cbs.dk Global Perspectives (2021) 2 (1): 24188. https://doi.org/10.1525/gp.2021.24188 Article history Share Icon Share Tools Icon Tools Search Site The sense of extreme disruption brought by Covid-19 led to the fast adoption of unprecedented containment policies. Central banks played a key role in this regard by adopting bold and unprecedented forms of financial stabilization as well as support for government debt in the bond markets. The overall effect has been the blurring of the boundary between monetary and fiscal policy, a key pillar of the “neoliberal” era. Furthermore, the Fed acted as a de facto lender of last resort in dollars of the global financial system, thus playing a global stabilization role even as the Trump administration worked to weaken traditional US ties to global economic governance.
While both Romania and Bulgaria were ravaged by the terminal crisis of the early postcommunist ec... more While both Romania and Bulgaria were ravaged by the terminal crisis of the early postcommunist economy, for material and intellectual reasons Bulgaria adopted a currency board regime with broad macroeconomic implications that locked society and politics into a very orthodox policy regime that constrained the domestic consumption channel and primed Bulgaria for the fulfillment of nominal convergence criteria. In contrast, Romania did not, and this allowed its policy elites to have more policy space for the decades to come. The resulting path-dependency in the policy sphere clicked well with the (related) growth regime, and Bulgaria morphed into a small open economy relying on external demand (via exports) as its main engine of growth. In contrast, Romania had a more balanced growth regime, with one leg on the exports and the other on consumption. Bulgaria’s policy and growth regimes delivered the stability that a society traumatized by hyperinflation needed (albeit at the expense of poor real convergence), leading its policy actors to develop an impregnable consensus on turning the currency board into the basis for the euro membership reforms that guarantee nominal convergence. In contrast Romania’s delivered both better export performance and higher consumption growth, locking in apolitical dynamics that disincentivized political investment in the growth, employment and consumption moderation required by nominal convergence. All this eventually resulted in a trailblazer dynamic (Bulgaria) and a laggard one (Romania) that had only minor partisanship inflections.
The conventional wisdom is that since 2010, austerity has been the dominant policy coming from es... more The conventional wisdom is that since 2010, austerity has been the dominant policy coming from established EU institutions. This paper shows that that the expansion of the role of the EIB and the entry of the ESM and EFSI in the governance mechanisms of the crisis has put some wrinkles on this common perception. Most importantly, these new institutional arrivals in the EU crisis management regime have contributed to a productively incoherent arrangement where the calibration of interventions to provide more accommodation for the member states’ and the balancing between austerity and stimulus became central to the regime.
Conference Presentation, 30years after 11989, European University Institute, 2019
In political economy terms, the year 1989 for East-Central Europe meant the shift from predominan... more In political economy terms, the year 1989 for East-Central Europe meant the shift from predominantly closed economies to integration into transnational financial, manufacturing and service chains that make up the spaghetti bowl of globalization. The anniversary of 1989 calls for some systematic cross regional comparison in terms of the promises made and the results delivered as part of that world historical transformation. Most importantly, however, it calls for a closer look at the distributional drivers of the region’s growth regimes.
Have European policy makers reacted to the 2008 crisis with single-minded determination to consti... more Have European policy makers reacted to the 2008 crisis with single-minded determination to constitutionalize austerity or have they instead been reflexive and used the crisis to generate EU-level buffer mechanisms against financial and macroeconomic crises? This paper argues that this emphasis on austerity from the existing literature on the European governance of the crisis can benefit from two consequential nuances. First, the EU established a full-fledged lender of last resort function for sovereigns and banks (European Stability Mechanism) that might soon morph into a consummate lender of last resort. Second, the EU also acquired a Keynesian face in the form of a countercyclical and competitiveness-boosting lending fund (European Fund for Strategic Investments) that strengthens the EU's investment state regime linking the EU with national development banks. However, the paper finds that the first function comes at the cost of imposing pressures for pro-cyclical fiscal policies on countries facing sovereign debt issues that are in excess of those demanded by the IMF. Similarly, the countercyclical lending fund has had a patchy record at delivering investment support to the countries that needed it the most.
The local " editing " of the IMF's doctrines and policies in countries with weak expertise can be... more The local " editing " of the IMF's doctrines and policies in countries with weak expertise can be explained by the role of popular protest, interest group and electoral strategy. It is commonplace to argue that these forms of politics can prevent some neoliberal ideas from being implemented as policies. Yet, the specific form that the Fund's views takes among dominant policy elites in a certain country over time can only be explained if we look at the economic ideas embraced by the policymakers by virtue of their training or other forms of professional socialization before such potent forms of politics kicked in.
The local " editing " of the IMF's doctrines and policies in countries with weak expertise can be... more The local " editing " of the IMF's doctrines and policies in countries with weak expertise can be explained by the role of popular protest, interest group and electoral strategy. It is commonplace to argue that these forms of politics can prevent some neoliberal ideas from being implemented as policies. Yet, the specific form that the Fund's views takes among dominant policy elites in a certain country over time can only be explained if we look at the economic ideas embraced by the policymakers by virtue of their training or other forms of professional socialization before such potent forms of politics kicked in.
This paper proposes a usable definition of neoliberalism that avoids its excessively narrow and b... more This paper proposes a usable definition of neoliberalism that avoids its excessively narrow and broad definitions and, hopefully, the intellectual confusion that surrounds this popular term. As such, it focuses on economic theories and schools of thought as the core of neoliberal coordinative discourse, with Spain, the IMF, Romania and Brazil providing the main illustrations. By calling on political economists to engage more systematically with economic theory and history, the paper defines neoliberalism as a set historically contingent and intellectually hybrid economic ideas and policy regimes derived from specific economic theories whose distinctive and shared goals are financial market credibility, trade and financial openness and the safeguarding of internal and external competitiveness.
This study attempts to advance the state of theory in the political science scholarship on the tr... more This study attempts to advance the state of theory in the political science scholarship on the transnational diffusion of economic ideas. Its main claim is that the current understanding of diffusion as a staggered process linking innovation and domestic adoption is problematic and should be either qualified or replaced with the more reflexive and dynamic concept of ‘translation’ used in actor-network theory.
This paper argues that the financialization of sovereign bond markets as a critical factor in the... more This paper argues that the financialization of sovereign bond markets as a critical factor in the European austerity drive. The paper shows how the politically engineered pre-crisis shift to transnational market-based, collateral intensive models of European banks’ locked banks and sovereigns together in an embrace that led governments towards austerity rather than any other instrument of rebalancing. The main value added of the paper is to show how systemic-level changes in Europe’s state-finance relations opened up new spaces of policy coercion exercised by the central bank of the monetary union.
This was a political choice anchored in a specific transnational epistemic elite whose membership cut across critical sites of European governance: European banks, their accountants and their lawyers, the ECB, the Commission and academia. The international regime they created provided more collateral at the cost of eroding banks’ loyalty to their government’s bonds, as the diverse investor base and the availability of alternative sources of collateral reduced the costs of exit for banks faced with sovereign risk. In sum, the Euro plus the repo turned ostensibly European lending into international lending in a common currency with disastrous results when the sudden stop occurred.
When the run on repo began in the Eurozone, these systemic transformations in state-finance relations percolated deeply in how fiscally balanced countries like Spain conducted fiscal policy. At first, the crisis ushered in a recalibration of neoliberal fiscal theories with bold Keynesian ideas that pushed the limits of mainstream fiscal policy. This approach was owed to the prominent positions in the state held by Spanish economists who had been at the forefront of major intellec¬tual shift in global macroeconomics. Given that the Spanish policy process was highly centralized and the prime minister’s transnationalized economic advisers socialized him into this synthesis of neoliberal and Keynesian ideas, between 2008 and 2010 Spain met the crisis with the largest expenditure- based stimulus in Europe.
However, when the sovereign bond market crisis that struck the “periphery” of the Eurozone in the spring of 2010 brought the Spanish financial system and the fiscal position of the Spanish government to the edge of the precipice, EU-level coercive mechanisms kicked into gear alongside market-based ones, terminating this Spanish experi¬ment. As the solutions provided by the European governance of the crisis failed to stabilize the bond markets in the “periphery” and with the ECB acting as the enforcer of fiscal orthodoxy, Spain came under extreme pressure to dismantle its attempt to shield society against the dislocations produced by the dramatic shrinking of cross-border finance.
This paper argues that the financialization of sovereign bond markets acted as a critical factor ... more This paper argues that the financialization of sovereign bond markets acted as a critical factor in the European austerity drive. By focusing on Spain, it shows how the politically engineered pre-crisis shift to transnational market-based, collateral intensive models of European banks’ locked banks and sovereigns together in an embrace that led governments towards austerity rather than any other instrument of rebalancing. The main value added of the paper is to show how systemic-level changes in Europe’s state-finance relations opened up new spaces of policy coercion exercised by the central bank of the monetary union. When the run on repo began in the Eurozone, these systemic transformations in state-finance relations percolated deeply in how fiscally balanced countries like Spain conducted fiscal policy. At first, the crisis ushered in a recalibration of neoliberal fiscal theories with bold Keynesian ideas that pushed the limits of mainstream fiscal policy. This approach was owed to the prominent positions in the state held by Spanish economists who had been at the forefront of major intellectual shift in global macroeconomics. Given that the Spanish policy process was highly centralized and the prime minister’s transnationalized economic advisers socialized him into this synthesis of neoliberal and Keynesian ideas, between 2008 and 2010 Spain met the crisis with the largest expenditurebased stimulus in Europe. However, when the sovereign bond market crisis that struck the “periphery” of the Eurozone in the spring of 2010 brought the Spanish financial system and the fiscal position of the Spanish government to the edge of the precipice, EU-level coercive mechanisms kicked into gear alongside market-based ones, terminating this Spanish experiment. As the solutions provided by the European governance of the crisis failed to stabilize the bond markets in the “periphery” and with the ECB acting as the enforcer of fiscal orthodoxy, Spain came under extreme pressure to dismantle its attempt to shield society against the dislocations produced by the dramatic shrinking of cross-border finance.
The conference aims to fill in these gaps and reexamine the basis on which comparative research o... more The conference aims to fill in these gaps and reexamine the basis on which comparative research on imperialism and the legacies of the Great War rest. It calls for complementary comparative work and invites papers that deal with various parts of Eastern Europe as spaces of inter-imperiality (Laura Doyle) where imperial powers overlapped. How do economic, political and social structures become legible in relation to multiple, conflicting empires generating different and competing imperialisms? How did the imperial difference (Madina Tlostanova) between traditional empires shape national, religious, and ethnic self-understandings and the resulting conflicts? How did multi- and inter-imperial relations impact the integration of these spaces into the capitalist world-economy?
To apply for the conference, please submit a title and an abstract of your paper (max 300 words) in English to telciuconferences@gmail.com until 5th of May 2018. Romanian scholars are requested to send the abstract also in Romanian. We will inform you about our decision by the 15th of May, 2018. The organizers will cover meals for the speakers as well as free accommodation for maximum 6 speakers, based on need and by request. Independent researchers or junior researchers will be given priority with accommodation.
Financialization accounts for critical sources of variation in terms of consumption, wages and ca... more Financialization accounts for critical sources of variation in terms of consumption, wages and capital investment lens dynamics that are at the heart of for the established growth regimes approach. The main argument is that each of the growth regimes theorized by Bacarro and Pontusson have distinct financialization dynamics and these shaped the observed diversity in terms of the contribution of exports and consumption to GDP growth in each of the growth regimes. Indeed, all of them have been transformed by financialization and particularly by shareholder value orientation and increasing reliance of non-financial firms on financial activities, leading to growing corporate profits even as capital investment declined in all cases. From this perspective financialization was indeed a fix to the decline in profits. However, the extent and mode of financialization explains why Sweden has higher capital investment than all the other cases while still projecting robust consumption growth, why consumption has been so resilient as a growth engine in Britain but not in Italy and why the German growth regime was constrained to stay competitive in export markets by repressing consumption.
Economic Policies of Populist Leaders: A Central and Eastern European Perspective, ed Istvan Benczes, 2023
Fiscal populism is a thin-centered ideology that pits the fiscally pure people against elites jud... more Fiscal populism is a thin-centered ideology that pits the fiscally pure people against elites judged to be problematic for some particular set of reasons, with a fiscal general will whose boundaries are defined by the populist adjudicating the outcome. The purpose of this ideology (and the policies derived from it) is to fiscally favor domestic capital over factions of foreign capital unessential to the domestic growth model, with domestic labor interests in a subordinated role. By looking at the case of Romania in the 2010s, the chapter proposes the concept of national-neoliberal fiscal populism to analyze a political economic context in which Romania wasted the opportunity to bolster its fiscal resources in one of Europe's longest and largest economic boom periods. The empirics suggests that this is a sufficiently apt term to conceptualize a particular translation of populism to policies ensuring the revenues of the state.
Karl Polanyi pare ieşit dintr-un roman de Joseph Roth despre gloria şi decăderea Mitteleuropei. D... more Karl Polanyi pare ieşit dintr-un roman de Joseph Roth despre gloria şi decăderea Mitteleuropei. Descendent al unei familii evreieşti budapestane ale carei iluzii moderniste sunt zguduite de anti-semitism şi război, Polanyi îşi petrece începutul carierei într-o Vienă interbelică a cărei glorie progresistă îşi trăia amurgul; este însă destul de norocos să prindă vremuri când economia era un câmp intelectual plural, în care tradiţia economia liberala era departe de a fi dominantă. Marea lui confruntare cu economiştii liberali nu se produce decât după ce devine imigrant universitar în America. Acolo, în 1944, într-un mic oraş universitar din bucolicul Vermont, Polanyi termină Marea transformare. Momentul publicării acestei cărţi-pivot coincide cu începutul celor treizeci de ani glorioşi reprezentaţi de mariajul dintre macroeconomia keynesiană şi statul bunăstării. Ca omagiu adus lui Polanyi, politologul John Ruggie a numit această epocă, cu o expresie faimoasă, "liberalism încastrat social" 1. Economia nu este un domeniu separat, ci este încastrată întotdeauna în societate, iar economia capitalistă nu este o condiţie naturală a omenirii, ci a fost planificată de stat în zorii revoluţiei industriale. Acestea sunt cele două lame ale foarfecii cu care Marea Transformare foarfecă marile tradiţii ale economiei liberale: (neo)clasicii şi Şcoala Austriacă. Rezultatul este devoalarea naturii utopice a acestui proiect socio-politic radical de transformare în marfă a omului şi naturii, proiect care ni se prezintă şi azi ca un inocent mecanism de producţie a celor mai eficiente echilibre posibile, într-o lume cu resurse limitate. Pentru Polanyi, economiştii liberali sunt simpli propagandişti ai ordinii sociale capitaliste, ocupaţi să demonstreze lipsa de alternative şi caracaterul rezonabil al pieţei
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Papers by Cornel Ban
Central Banking in Pandemic Times
Collections: Special Collection: Global Political Economy of COVID-19 , Section: Political Economy, Markets, and Institutions
Cornel Ban
1.cba.ioa@cbs.dk
Global Perspectives (2021) 2 (1): 24188.
https://doi.org/10.1525/gp.2021.24188
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The sense of extreme disruption brought by Covid-19 led to the fast adoption of unprecedented containment policies. Central banks played a key role in this regard by adopting bold and unprecedented forms of financial stabilization as well as support for government debt in the bond markets. The overall effect has been the blurring of the boundary between monetary and fiscal policy, a key pillar of the “neoliberal” era. Furthermore, the Fed acted as a de facto lender of last resort in dollars of the global financial system, thus playing a global stabilization role even as the Trump administration worked to weaken traditional US ties to global economic governance.
This was a political choice anchored in a specific transnational epistemic elite whose membership cut across critical sites of European governance: European banks, their accountants and their lawyers, the ECB, the Commission and academia. The international regime they created provided more collateral at the cost of eroding banks’ loyalty to their government’s bonds, as the diverse investor base and the availability of alternative sources of collateral reduced the costs of exit for banks faced with sovereign risk. In sum, the Euro plus the repo turned ostensibly European lending into international lending in a common currency with disastrous results when the sudden stop occurred.
When the run on repo began in the Eurozone, these systemic transformations in state-finance relations percolated deeply in how fiscally balanced countries like Spain conducted fiscal policy. At first, the crisis ushered in a recalibration of neoliberal fiscal theories with bold Keynesian ideas that pushed the limits of mainstream fiscal policy. This approach was owed to the prominent positions in the state held by Spanish economists who had been at the forefront of major intellec¬tual shift in global macroeconomics. Given that the Spanish policy process was highly centralized and the prime minister’s transnationalized economic advisers socialized him into this synthesis of neoliberal and Keynesian ideas, between 2008 and 2010 Spain met the crisis with the largest expenditure- based stimulus in Europe.
However, when the sovereign bond market crisis that struck the “periphery” of the Eurozone in the spring of 2010 brought the Spanish financial system and the fiscal position of the Spanish government to the edge of the precipice, EU-level coercive mechanisms kicked into gear alongside market-based ones, terminating this Spanish experi¬ment. As the solutions provided by the European governance of the crisis failed to stabilize the bond markets in the “periphery” and with the ECB acting as the enforcer of fiscal orthodoxy, Spain came under extreme pressure to dismantle its attempt to shield society against the dislocations produced by the dramatic shrinking of cross-border finance.
austerity rather than any other instrument of rebalancing. The main value added of the paper is to show how systemic-level changes in Europe’s state-finance relations opened up new spaces of policy coercion exercised by the central bank of the monetary union. When the run on repo began in the Eurozone, these systemic transformations in state-finance relations percolated deeply in how fiscally balanced countries like Spain
conducted fiscal policy. At first, the crisis ushered in a recalibration of neoliberal fiscal theories with bold Keynesian ideas that pushed the limits of mainstream fiscal policy. This approach was owed to the prominent positions in the state held by Spanish economists who
had been at the forefront of major intellectual shift in global macroeconomics. Given that the Spanish policy process was highly centralized and the prime minister’s transnationalized economic advisers socialized him into this synthesis of neoliberal and Keynesian ideas, between 2008 and 2010 Spain met the crisis with the largest expenditurebased stimulus in Europe. However, when the sovereign bond market crisis that struck the “periphery” of the Eurozone in
the spring of 2010 brought the Spanish financial system and the fiscal position of the Spanish government to the edge of the precipice, EU-level coercive mechanisms kicked into gear alongside market-based ones, terminating this Spanish experiment. As the solutions provided by
the European governance of the crisis failed to stabilize the bond markets in the “periphery” and with the ECB acting as the enforcer of fiscal orthodoxy, Spain came under extreme pressure to dismantle its attempt to shield society against the dislocations produced by the dramatic shrinking
of cross-border finance.
To apply for the conference, please submit a title and an abstract of your paper (max 300 words) in English to telciuconferences@gmail.com until 5th of May 2018. Romanian scholars are requested to send the abstract also in Romanian. We will inform you about our decision by the 15th of May, 2018. The organizers will cover meals for the speakers as well as free accommodation for maximum 6 speakers, based on need and by request. Independent researchers or junior researchers will be given priority with accommodation.