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Sharing the Pain? Mass Politics and the Policy Responses to the Financial Crisis

Final Report Summary - CRISIS_POLITICS (Sharing the Pain? Mass Politics and the Policy Responses to the Financial Crisis)

The financial crisis has hit had major implications for countries worldwide. My research project focused on the political repercussions of two major policy issues that have arisen as a result of the crisis and that have been deeply contested ever since: international bailouts and domestic austerity programs. To study the political economy of those two policy domains, I designed and administered a cross-national survey that was carried out in a host of European countries (including France, Germany, Spain, Greece, Italy and the UK). Using this data, we studied a set of questions pertaining to the mass politics of the crisis.
One paper has already come out in a leading journal and another is currently under a revise and resubmit for a second leading journal. In addition, a third academic paper is currently in works. The first paper to come out of the project focuses on the widespread opposition among voters in many countries toward aiding their struggling neighbors via contributions to the funding of bailout packages. My colleagues and I sought to understand the nature of the opposition to those international assistance efforts, asking under what conditions can governments obtain broader political support for funding such large-scale transfers? Addressing this question, we distinguished theoretically between two types of public attitudes: ‘fundamental’ as opposed to ‘contingent’ attitudes. Whereas the former entail complete rejection or embrace of a policy, contingent attitudes depend on the specific features of the policy and could shift if those features are altered. Using a survey experiment that varies salient policy dimensions, our analysis found that less than a quarter of the public exhibits fundamental opposition to the bailouts. We then analyzed the contingent attitudes among the public, and showed that specific sensitivity to the burden-sharing and cost dimensions was central to how voters evaluated the proposition of contributing to a bailout effort. Our results indicate that the choice of specific features of a rescue package has important consequences for governments' ability to garner broad support for international assistance efforts.
The second paper focused on the debate over the bailout to Greece and sought to explain the sharp divide among European publics over Grexit. The paper shows that prominent explanations offered so far – including differences in citizens' own economic interests, or the chasm between supporters of mainstream and extremist parties -- provide little insight into the public divide over the Grexit. Instead, the analysis indicated that the key factor explaining the public divide is the split between left and right. The paper will examined why a cleavage that typically delineates debates over domestic policy questions came to structure voters' position also on a foreign policy issue, namely the possible default and exit of a currency-union member state.
Using the original cross-national data we collected, we find that the left-right divide over the Grexit was not driven by differences in attitudes on redistribution, levels of empathy, or general degree of voters' support for the EU project. Instead, left and right voters have very different expectations about how a default and exit of a currency-union member would affect the European economy. These expectations largely reflect differences in core beliefs about the promise of a free-market approach.
The third paper deals with the mass politics of austerity. Given the hardships that such policies entail, what explains the high rate of support for this approach in many advanced economies? Utilizing both observational and experimental work, I examine a number of theories that can account for this puzzle. This study also utilizes cross-national data, focusing on three countries: Greece, Spain and Italy.
These studies have garnered a good deal of interest in both academic and public forums. I presented my findings in many conferences and presentations, as well as in media appearances and op-ed writings. Among those was a New York Times op-ed, coverage of the findings in the New York Times, and a piece in the Monkey Cage section of the Washington Post.
I have used the financial support of the CIG to invest in integrating in my host institution, Tel Aviv University. In particular, I focused on knowledge transfer. I have designed four new courses, two for undergraduate students and two for graduate students ("Advanced topics in comparative politics"; "Politics of International Economic Relations"; "Understanding Empirical Research" and "Research design and methods"). The latter was particularly impactful, as it is the main research design course for PhD students. The course enables me to instill in early-stage PhD students advanced methods for research design, a high level of sophistication in addressing issues of statistical inference and causality, and to improve their skills in topic selection and theory derivation.
Furthermore, I led the overhaul of our department's PhD program, changing its core requirements and course sequence in three major fields. The changes I have led have made the program far more attractive for ambitious students, and I believe will bear fruit in the coming years in the form of better PhD training and better dissertations to come out of this.
Finally, the CIG funding has allowed me to dedicate sufficient time for research at the highest level. I feel well integrated in my new surroundings in Tel Aviv University, am have created a strong training environment for new and upcoming scholars. I believe that going forward I will be able to maintain a high level of productivity with a strong emphasis on excellence in research.