The Political Geography of the Eurocrisis

Journal Article (Journal Article)

The European Union provided a mixed response to the 2008 financial crisis. On the one hand, it refused to pursue fiscal integration through a common budget; on the other, it introduced significant transfers between countries that were designed to produce financial stabilization. The authors analyze this response as the outcome of democratic constraints on EU leaders. Given the EU's current institutional structure, citizens' preferences pose a binding constraint on what leaders can do as these preferences limit the scope of risk-pooling among members and the degree of political tolerance for different courses of action. The authors show that citizens' preferences reflect differences in the geography of income, production regimes, and institutional organization. The heterogeneity of constituencies' redistribution preferences combined with a diverse economic geography helps to explain why political constraints on national governments prevent them from engaging in further fiscal integration. By contrast, externalities among member states shift the preferences of citizens who may experience negative effects and make international redistribution politically feasible. The authors analyze these two mechanisms and present novel empirical results on the determinants of preferences for fiscal integration and international redistribution in the aftermath of the eurocrisis.

Full Text

Duke Authors

Cited Authors

  • Beramendi, P; Stegmueller, D

Published Date

  • October 1, 2020

Published In

Volume / Issue

  • 72 / 4

Start / End Page

  • 639 - 678

Electronic International Standard Serial Number (EISSN)

  • 1086-3338

International Standard Serial Number (ISSN)

  • 0043-8871

Digital Object Identifier (DOI)

  • 10.1017/S0043887120000118

Citation Source

  • Scopus