Book manuscript (in progress): “Governing Crises: The International Politics of Crisis Economics from Bretton Woods to the Great Recession”
Published peer-reviewed articles
1. “The BRICs and the Washington Consensus: An Introduction,” Review of International Political Economy (with Mark Blyth, April 2013).
2. “Brazil’s Liberal Neo-Developmentalism: Edited Orthodoxy or New Policy Paradigm?” Review of International Political Economy (Spring 2013).
3. “Sovereign Debt, Austerity and Regime Change: The Case of Nicolae Ceausescu’s Romania,” East European Politics and Societies (Winter 2012).
4. “Heinrich von Stackelberg and the Diffusion of Ordoliberal Economics in Franco’s Spain,” History of Economic Ideas (Winter 2012)
5. “Economic Transnationalism and its Ambiguities: Romanian Migration to Italy”, International Migration (Fall 2012).
Articles under review
1. “From Cocktail to Dependence: The Transformation of Romanian Capitalism,” submitted to Europe-Asia Studies.
2. “Geopolitics, Regime Type and the Internationalization of Romanian Economics During the Cold War,” submitted to Communist and Post-Communist Studies.
Articles in Progress
1. “Extending Varieties of Capitalism: Finance and Fiscal Policy Convergence,”
prepared for Socio-Economic Review.
2. “Give Me a Paradigm Shift, But Not Yet: Research and Fiscal Policy at the IMF,” prepared for Governance.
3. “Fiscal Policy in Financialized Times: Investor Loyalty and Financialization”, prepared for Journal of Common Market Studies (co-authored with Daniela Gabor).
4. “The Limits of Translation: Neoclassical Economics in China,” prepared for Europe-Asia Studies (with Sarah Sklar).
5. “Class Politics and Class Analysis in Romania,” research note prepared for East European Politics and Societies.
6. “Which Nail in What Coffin? Revisiting the Demise of Social Democracy and Keynesian Macroeconomics in Europe,” prepared for Government and Opposition (with Oddny Helgadottir).
1. (2012) “Was 1989 the End of Social Democracy?” in Vladimir Tismaneanu and Bogdan Iacob, eds., The End and the Beginning. The Revolutions of 1989 and the Resurgence of History, Central European University Press
2. (2005) “The Rule of Law and the European Human Rights Regime”, in Hoffmann, Matthew and Alice Ba eds., Coherence and Contestation: Contending Perspectives on Global Governance. London: Routledge (co- authored with Goldstein, Leslie F.).
IR 759: Power, Ideas and Money: The Politics of International Finance
IR 592: International Economic Organizations and Development
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.
Two questions therefore animate this special issue: What did the Washington Consensus look like in practice? And how have the BRICs appropriated, adopted, adapted, or abandoned specific aspects of this transnational policy paradigm? These are important questions for scholars of international political economy because they cut to the heart of ongoing debates taking place in several social science disciplines concerning the diffusion of liberal economic ideas and the remaking of global economy.
The BRICs have a special role in this drama. As a group of emerging economies, they started out as a mere Goldman Sachs investment meme a decade ago and yet went on to become one of the few beacons of the global economy during the Great Recession. They even formed an inter-governmental alliance of South-South cooperation with an ambitious agenda in international economic institutions. What makes them particularly interesting to us however is that although these countries went through their impressive growth spurts in an international context dominated by neoliberal economic ideas and narratives about the dos and don’ts of development, they nevertheless reclaimed the role of the state in development far beyond the limits of the WC framework. The BRICs have a greater degree of policy autonomy from WC core institutions -the World Bank and the IMF – then other states in the so-called ‘Global South’ (Woods 2006; Pop-Eleches 2008). Given this and their systemic importance in the global economy the BRICs stand as critical cases where we can examine the domestic dynamics of WC support and contestation.
The added value of this special issue is threefold. First, we examine the relationship between the BRICs and the Washington Consensus over time and attempt to extract the dynamics of this interaction for the BRICs as a group. As such, the contributors examine the ideas and institutions of this transnational policy paradigm while explaining why and how they were reproduced, modified, or contested in the domestic politics of each state. Second, while calls for interdisciplinarity are many, their realization in focused empirical work is harder to come by (e.g. Simmons et al 2008). This special issue contributes to this emerging literature by hosting contributions from political science and sociology. The efforts of four political scientists to illuminate the workings of the individual cases (Cornel Ban, Peter Rutland, Rahul Mukherji and Matthew Ferchen) are framed by the insights of sociologists working on the transnational institutional devices of the WC (Sarah Babb) and its economic ideas respectively (Marion Fourcade). Finally, the case studies approach the topic from varying theoretical perspectives that seek to specify the political conditions under which economic ideas play a critical role in institutional transformations.
Recent contributions to the comparative political economy of East European capitalisms have found that a distinctive variety of capitalism emerged in some new EU member states. The new variety has been dubbed “dependent market economy” (DME). This paper makes several contributions to this literature. First, it marshals evidence to show that this institutional variety now includes the political economy of Romania, a case previously excluded from it. More importantly, this analysis also finds that earlier scholarship on dependent capitalism has failed to capture crucial mechanisms of dependence created by transnationalized finance. Third, the paper suggests that some of the arguments made in the existing scholarship on the interests of foreign capital with regard to domestic innovation and labor training need to be qualified. Finally, by showing reflexivity towards select critiques of the dependent market economy framework, the analysis proposes by this paper is a self-limited attempt to bridge the differences between the varieties of capitalism and Polanyian analyses of capitalist diversity in semi-peripheral middle-income states.
Available on ssrn at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2233056
I just published this in History of Economic Ideas, XX, 3, 2012
Economic historians regard Ordoliberalism as a school of thought whose reach was limited to Germany. Challenging this popular view, this study shows that Ordoliber- alism also had considerable impact on Spanish economics during the 1940s and 1950s, despite the fact that Spain’s policy establishment favored a state-led and predominant- ly antiliberal development model. This puzzling outcome was the result of the excep- tional ideational entrepreneurship of Ordoliberal economist Heinrich von Stackel- berg, who was a visiting professor in Madrid from 1943 until his death in 1946. His intellectual entrepreneurship in the Spanish economic profession proved to have lasting consequences, as the policy-oriented intellectuals he influenced came to occu- py leading positions in academia and economic policy institutions. This paper also contributes to the empirical literature on the diffusion of economic ideas across na- tional epistemic boundaries by highlighting the role of exceptional economists acting as carriers of new economic ideas. Finally, the study helps illuminate a critical junc- ture in the intellectual history of Spanish economics during the Francoist regime.
Together with my colleague Kevin Gallagher I convened a workshop on the IMF since Lehman. We ask: What explains the variegated pattern of stability and change in the IMF’s substantive and procedural positions? Do existing explanations of the IMF’s reactions to previous crises survive the test of the current crisis, whose distinctiveness consists of its unprecedented size and its deep impact on the developed European core? Have the established patterns in IMF’s differential treatment of its members changed relative to past crises?
Grigore Pop-Eleches from Princeton University will do a systematic comparison of the crisis-ideology connection in IMF programs before and after 2008. Leonard Seabrooke and Emelie Nilsson from Copenhagen Business School undertake to examine changes in the IMF policy cliques tasked with international financial surveillance. André Broome from University of Warwick asks what roles have economic ideas played in IMF bailouts in a select population of crisis episodes while Cornel Ban of Boston University examines the role of staff research in facilitating the partial revisions of the IMF’s stance on fiscal policy. Aitor Erce Dominguez (Bank of Spain and Universidad Autonoma de Madrid)
studies how the relation between the Fund and sovereigns’ creditors while Daniela Gabor (Bristol Business School) looks at the Fund’s changing positions on monetary and macroprudential issues. Sarah Babb from Boston College and Alex Kalentekis from Harvard University will write a framework article that reflects on the findings of all these papers.
The workshop is funded by our university’s Center for Law, Policy and Finance.
IMF Workshop Schedule (draft)_cb edits
The nexus between economists, state and society has emerged as one of the most fertile areas of research on how economic science is shaped by institutions and viceversa. One of the main insights of this literature is that the interaction between domestic economists and their counterparts in the Western epistemic core has become a driving force in shaping the boundaries of the domestic economic profession and of the policy sphere.The evidence for this argument is compelling but its ambit is limited to regional contexts where the ideas being imported served the economic policy agenda of powerful domestic actors. Latin America’s “Chicago Boys,” to take a familiar example, were encouraged and even bankrolled by powerful business and state actors from their home countries or from abroad. But such alignments between dominant interests and the new ideas did not exist elsewhere. Consider the case of Eastern Europe during the Cold War. Here, the economic profession was so tightly regulated by an ideologically anticapitalist state elite that open advocacy for Western economic ideas hostile to the political economy of state socialism often entailed professional costs and, in some of the more repressive regimes, it even led to political persecution. How did diffusion take place this political context and what factors powered and respectively filtered diffusion dynamics? To address these questions, this paper examines the case of Romania, a country where the poverty of the neoclassical tradition before the war would lead one to expect a lot less diffusion of Western economics than in East-Central Europe. At the same time, the paper suggests that geopolitical openings facilitating East-West scientific exchanges enabled the emergence of practices of diffusion of Western economics among critically minded economists.
Fiscal Policy in Financialized Times: Investor Loyalty, Financialization and the Varieties of Capitalism
Paper co-authored with Daniela Gabor (Bristol Business School) and Cornel Ban (Boston University)
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. According to recent research, the interaction between coordinated and liberal capitalisms, and their distinctive macroeconomic policy preferences, generates global imbalances and instability. Rebalancing can only occur if the incentives governing national polities change dramatically.
In Europe’s case, sudden stops in capital inflows from coordinated capitalisms triggered an asymmetric response, forcing deficit (liberal and mixed) economies to address such imbalances. As wage-setting institutions could not restore real exchange rate competitiveness a la Germany, governments were compelled to adopt the conservative macroeconomics of the coordinated economies in an institutional setting ill adapted to such policies. In contrast, our account highlights the constraints that financial actors in sovereign bond markets place on the conduct of fiscal policy. Drawing on recent contributions in the literature on financialization, we introduce the concept of the ‘collateral motive’ – investors’ demand for government bonds to meet their funding needs – and show how this becomes a pivotal mechanism for fiscal consolidation as the singular response to the ongoing Eurozone crisis. Without analyzing the process through which the collateral motive ignited a run on peripheral sovereign bond markets, which in turn and compelled states to stabilize these markets through austerity, a complete account of the ongoing Eurozone crisis cannot be provided.
My forthcoming piece in East European Politics and Societies (2013)
Sovereign Debt, Austerity, and Regime Change:
The Case of Nicolae Ceausescu’s Romania
Historically, high sovereign debt and austerity policies have coincided with regime- changing popular uprisings. Nicolae Ceausescu’s Romania was no exception. Why, when faced with a sovereign debt crisis in the 1980s, did his regime choose to pay its foreign debt as early as possible, at the cost of economic recession and dramatically compressed consumption? How did these choices relate to the regime’s failure to survive the end of the decade?
The article argues that while exogenous shocks shattered the economic bases of the regime, it was the ideas with which the regime understood development and interpreted the crisis that shaped government policy responses in the 1980s. When the price of oil and development finance went up abruptly in 1979, the low energy efficiency of Romanian industry pushed the country into a situation where debt levels became unsustainable. Committed to a view of development that blended nationalist and Stalinist ideas, but with a focus on policy sovereignty, Ceausescu diagnosed the crisis as evidence that debt-financed development and policy independence were incompatible.
Consequently the regime decided to pay off foreign debt through a mix of austerity, import substitution, and export-led accumulation of dollar reserves. By the time all debt was paid off in 1989, the regime’s economic sources of legitimacy were exhausted. In the external environment of 1989, this policy regime change contributed to political regime change even in the absence of an organized civil society. In addition to casting a new light on the causal mechanisms of the Romanian revolution of December 1989, the findings of this article contribute to emerging scholarship that stresses the nexus between debt-induced economic crisis and popular uprisings.
The paper is here: