Politics in the New Hard Times: The Great Recession in Comparative Perspective

329 Pages·2013·1.269 MB·English

by  Miles Kahler, David A. Lake

POLITICS IN THE NEW
HARD TIMES
A volume in the series
Cornell Studies in Po liti cal Economy
Edited by Peter J. Katzenstein
A list of titles in this series is available at
www .cornellpress .cornell .edu .
POLITICS IN
THE NEW
HARD TIMES
The Great Recession in
Comparative Perspective
Edited by Miles Kahler
and David A. Lake
CORNELL UNIVERSITY PRESS ITHACA AND LONDON
Copyright © 2013 by Cornell University
All rights reserved. Except for brief quotations in a review, this book, or parts
thereof, must not be reproduced in any form without permission in writing from
the publisher. For information, address Cornell University Press, Sage House, 512
East State Street, Ithaca, New York 14850.
First published 2013 by Cornell University Press
First printing, Cornell Paperbacks, 2013
Printed in the United States of America
Library of Congress Cataloging- in- Publication Data
Politics in the new hard times : the great recession in comparative perspective /
edited by Miles Kahler and David A. Lake.
p. cm. — (Cornell studies in po liti cal economy)
Includes bibliographical references and index.
ISBN 978- 0- 8014- 5151- 5 (cloth : alk. paper)
ISBN 978- 0- 8014- 7827- 7 (pbk. : alk. paper)
1. Global Financial Crisis, 2008– 2009—Political aspects. 2. World politics—
2005– 2015. 3. International economic relations—P olitical aspects. I. Kahler,
Miles, 1949– II. Lake, David A., 1956– III. Series: Cornell studies in po liti cal
economy.
HB37172008 .P65 2013
330.9'0511—dc23 2012033983
Cornell University Press strives to use environmentally responsible suppliers and
materials to the fullest extent possible in the publishing of its books. Such materials
include vegetable-b ased, low-V OC inks and acid-f ree papers that are recycled, to-
tally chlorine-f ree, or partly composed of nonwood fi bers. For further information,
visit our website at www .cornellpress .cornell .edu .
Cloth printing 10 9 8 7 6 5 4 3 2 1
Paperback printing 10 9 8 7 6 5 4 3 2 1
To Peter Gourevitch
Scholar, Colleague, Friend

Contents
List of Illustrations ix
Preface xi
Introduction: Anatomy of Crisis: The Great Recession
and Po liti cal Change 1
Miles Kahler and David A. Lake
Part I CRISES AND POLITICS: IS THIS TIME DIFFERENT?
1. Economic Crisis and Global Governance:
The Stability of a Globalized World 27
Miles Kahler
2. Politics in Hard Times Revisited: The 2008– 9 Financial
Crisis in Emerging Markets 52
Stephan Haggard
3. Partisan Financial Cycles 75
J. Lawrence Broz
4. The Politics of Hard Times: Fiscal Policy and the
Endogeneity of Economic Recessions 102
Pablo M. Pinto
Part II INTERESTS, CO ALI TIONS, AND CONSEQUENCES
5. The Po liti cal Origins of Our Economic Discontents:
Contemporary Adjustment Problems in Historical
Perspective 129
Peter A. Hall
6. Puzzles from the First Globalization 150
Suzanne Berger
7. Portfolio Politics in the New Hard Times: Crises, Co ali tions,
and Shareholders in the United States and Germany 169
James Shinn
vii
viii CONTENTS
8. Co ali tion of Losers: Why Agricultural Protectionism Has
Survived during the Great Recession 190
Megumi Naoi and Ikuo Kume
9. Crafting Trade Strategy in the Great Recession: The Obama
Administration and the Changing Po liti cal Economy of the
United States 212
Peter Cowhey
10. Worlds in Collision: Uncertainty and Risk in Hard Times 233
Peter J. Katzenstein and Stephen C. Nelson
Afterword: Yet More Hard Times? Refl ections on the
Great Recession in the Frame of Earlier Hard Times 253
Peter A. Gourevitch
References 275
About the Contributors 303
Index 307
Illustrations
Figures
Figure 2- 1. Current account balances in emerging markets: Latin America,
East Asia, and eastern and southern Eu rope (percent of GDP) 57
Figure 2- 2. Primary fi scal balances in emerging markets: Latin America, East
Asia, and southern and eastern Eu rope (percent of GDP) 59
Figure 3- 1. Government partisanship before and after a Big Five crisis 80
Figure 3- 2. Government partisanship before and after a subprime
crisis 81
Figure 3- 3. Partisanship before and after a subprime crisis (grouped by
current account balance) 82
Figure 3- 4. Real house prices and the current account balance, Big Five
and subprime cases 83
Figure 3- 5. Partisan composition of the Cabinet before and after a banking
crisis 83
Figure 3- 6. Change in partisanship after a crisis, Big Five and
subprime 84
Figure 3- 7. Change in mass po liti cal attitudes after a banking crisis 85
Figure 3- 8. Current account balance before and after a systemic
crisis 88
Figure 3- 9. Current account balance in defi cit and surplus countries,
subprime crises 89
Figure 3- 10. Central government structural bud get balance before and after
banking crises 90
Figure 3- 11. Bank regulation and supervision before and after the Big
Five crises 92
Figure 4- 1. Argentina GDP and government spending: Correlation by
de cade 117
Figure 4- 2. Argentina government spending and revenue 117
Figure 4- 3. Constant GDP per capita (natural log) and pro- cyclical govern-
ment spending 121
ix