The New Politics of Austerity: Fiscal Responses to the Economic Crisis in Ireland and Spain

Sebastian Dellepiane and Niamh Hardiman
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Sebastian Dellepiane: University of Strathclyde

No 201207, Working Papers from Geary Institute, University College Dublin

Abstract: This paper adopts a new analytical approach to explaining choices in fiscal politics in Ireland and Spain between 2008 and 2010, in response to international economic crisis. It adopts a comparative cross-national research design to explore why two countries with similar pre-crisis fiscal profiles adopted radically different strategies in the initial phase of the crisis: Ireland adopted an orthodox deficit-reduction strategy, while Spain implemented a ‘heterodox’ stimulus fiscal package. Yet by mid-2010, Spain’s fiscal stance had converged with Ireland’s, as the wider European crisis deepened and the scope for autonomous national policy choice narrowed. The paper tracks this shift in a second stage of the research design, examining within-country variation over time, to provide a nuanced and sophisticated analysis of strategic choices at critical moments. It argues that the shift toward a European politics of austerity is different in a number of important ways from the older politics of fiscal consolidation, and that this has far-reaching implications not only for the evolution of European integration, but also for the balance between democratic politics and transnational markets.

Keywords: 2008 banking crisis; regulatory failure; Ireland; principles based regulation; public debt (search for similar items in EconPapers)
Pages: 60 pages
Date: 2012-02-23
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:ucd:wpaper:201207

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