Austerity Strategy Research Articles

Capitalism, Austerity, and Fascism

Abstract There is a strong resonance between events of the inter-war years and today. These include a questioning of laissez-faire capitalism and austerity, and the rise of so-called ‘populist’ parties on both the left and right. Clara Mattei’s (2022) The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism thus makes an interesting contribution, by locating the key argument of her book in the febrile period of European history between the wars. According to Mattei, the First World War disrupted the pre-war capitalist system to such an extent that it created a crisis of capitalism, itself. As a result, following the end of hostilities, there was a conscious effort to restore the pre-war ‘capital order’ by means of a technocratic ‘austerity strategy’, and this was strongly linked to the rise of fascism. We argue that the inter-relationship between capitalism, austerity, and fascism during the 1920s and 1930s was rather more complex, and that to make sense of this, it is necessary to broaden the focus beyond Italy and Great Britain and the international financial conferences at Brussels (1920) and Genoa (1922). Otherwise, we risk misunderstanding and mis-diagnosing our own times, as those inter-war politicians, financiers, and economists discovered to their cost. We therefore also include Germany and the USA and base our analysis on the events of the entire inter-war period.

EDUCATION REFORM AND FINANCIALIZATION: Making the Fiscal Crisis of the Schools

AbstractOur fiscal analysis of Chicago Public Schools (CPS) from 1990 to 2018 contributes to a growing scholarship on the financialization of urban governance. We advance the concept of ‘recursive austerity’ to show how devolution and cuts at higher scales push local governments into the hands of both growth and debt machines. The use of short‐term and variable‐rate debt to pay for capital projects causes entrepreneurial and austerity strategies to chafe against their limitations and contradictions, which begets more austerity and structural dependence on credit markets. Faced with deficits, CPS undertook crippling austerity measures, such as staffing cuts, pension holidays and school closures, which disproportionately harmed Black students, households, teachers and neighborhoods. We explain how CPS moved from a voluntary high‐leverage strategy to finance capital projects to endemic debt dependency, characterized by habitual borrowing to refinance old loans and sustain operations. We argue that CPS's debt trap and recurring budget ‘crises’ are the outcomes of the fiscal management decisions it made with investment banks and the City of Chicago, and not only the result of secular trends such as declining enrollments.

Impact of austerity programs: Evidence from the Italian national health service.

Austerity measures are widely adopted to cope with financial straits. Since 2007 Italy has operated a financial recovery program (Piani di Rientro, PdR) in certain regions of the country. This provides an interesting setting for an intra-national analysis of the differences between the regions under a PdR program and those which are not. In the regions under a PdR, efforts to achieve economic sustainability and fiscal balance have impacted on healthcare indicators, resulting in a reduction in healthcare resources, an increase in taxes, and a general weakening of regional healthcare systems since the introduction of the program more than a decade ago. The detrimental effects of the austerity measures have become evident. As the regions under a PdR have demonstrated a sufficient level of economic stability, the national government should start revising its austerity strategy to prevent further widening of gaps in healthcare performance between regions.

Austerity versus pragmatism: a comparison of Latvian and Polish economic policies during the great recession and their consequences ten years later

ABSTRACTDespite many initial similarities, Latvia and Poland represent two opposite extremes in terms of practical and theoretical approaches to the economic crisis. The Polish government applied a ‘pragmatic’ approach to fight the recession, based on expansionary fiscal policies and currency devaluation. Conversely, the Latvian administration opted for the Austerity and internal devaluation strategy. Consequently, the objective of this paper is to analyze, from the perspective of political economy, the strategies chosen for the economic crisis management and their effects in Latvia and Poland, in light of the main EU narratives about its causes and responses. The research contends that the economic performance of both countries during the crisis was due to their respective economic structures. On the one hand, Poland is a bigger, more diversified and industrialized economy, with fewer channels of vulnerability and could apply expansionary policies effectively. On the contrary, the economic model established in Latvia generated a high exposure to external shocks, in particular, with a double vulnerability in the banking sector. In this context, due to internal and external motives, the Latvian government decided to apply the austerity and internal devaluation strategy, worsening the economic decline and the subsequent recovery.

The distortions of the Irish ‘recovery’

The return of the Irish Republic to economic growth after years of recession has been hailed as a vindication of the country’s adherence to strict austerity policies after the crash. In this article, we provide a critical reading of this familiar rendition of the recent turn in Ireland’s economic fortunes. We argue that the discourse of ‘recovery’ is an ideologically partisan reading that distorts the scale, origins and benefits of the recent spell of growth in the Irish economy. A close examination of each of these distortions suggests that the current economic revival has occurred in spite, rather than because, of the austerity strategy and has resulted in the lives of many ordinary Irish people becoming not better but worse.

The debate on the economic effects of minimum wage legislation

The minimum wage establishment has its origin in the first third of the last century. Since its creation has been a focus of continuing controversy and an unfinished debate on economics field. This work reviews the effects of the minimum wage on employment and other macroeconomic variables, from both theoretical and empirical perspectives. The method is based on the revision of the literature and the main economic indicators. The central contribution of this paper is providing a general reflection on theoretical and empirical analysis about the debate on minimum wage and its effects. The results showed that some labor policies are taking account the effects of austerity strategies, shifting the attention towards the implementation of minimum wages or their updating, in order to reduce the growing inequalities in the distribution of income, and even poverty levels.

Deciphering the International Monetary Fund’s (IMFs) position on austerity: Incapacity, incoherence and instrumentality

Back in 2009, at the height of the global financial crisis, the London G20 forum met and declared the Washington consensus dead. What emerged in its place was a contradictory and confusing array of narratives and international policy prescriptions for post-crisis recovery that owed as much to the past as the present. Divisions within and among International Governmental Organisations (IGOs) arose about how best to address the economic challenges, but the dominant solution was ‘austerity’ which became firmly rooted in the policies and discourse of national governments and international organisations alike. While signalling a downward political reconditioning of public welfare expectations, the austerity strategy has itself lacked organisational conviction and coherence. Austerity is, thus, important for identifying the location of social policy in international post-crisis economic discourse. Since the crisis has paradoxically, bolstered economic interests at the expense of political choice, it is also necessary to study the crisis responses advocated by economic organisations as more, rather than less significant in shaping welfare futures. This article draws on evidence from a textual content analysis of International Monetary Fund (IMF) documents over the period 2004–2015 to examine discourse on austerity and social policy. The findings indicate that, while the language of ‘austerity’ and policy prescriptions vary, the IMF’s essential position has been to advocate austerity-like policies throughout the period, leaving its ideational ‘economistic’ position on the purpose of social policy fundamentally unchanged. These findings contrast with others that perceive a shift towards social justice concerns within the organisation, whereas our evidence suggests that the IMF’s position on social policy is one of ambivalence and incoherence.

Conceptualising European Privatisation Processes After the Great Recession

AbstractA wave of privatisation is unfolding in Europe in the wake of the financial crisis, but it has yet to receive serious scholarly attention. This paper examines the case of Ireland, where an austerity strategy and European Union International Monetary Fund bailout conditionality have given impetus to the transfer of public assets to the private sector. Theoretically, the paper explains the roots of the phenomenon with reference to a reformulated concept of “accumulation by dispossession” whose usefulness lies in emphasising the politico‐economic drivers of privatisation, which have been neglected in the mainstream literature. A typology is presented that argues that accumulation by dispossession manifests itself, in practice, through four main processes: (1) private repossession of assets nationalised during the financial crisis; (2) restructuring of state‐owned enterprises; (3) commodification of assets and services hitherto located outside the market; and (4) privatised stimulus through public–private partnerships. The paper's framework should be useful to conceptualise ongoing privatisation processes in other European countries.

The Politics of extreme austerity: Greece in the eurozone crisis

Figures and Tables Acknowledgements Abbreviations Notes on Contributors Introduction: Dissecting the Greek Debt Crisis Georgios Karyotis and Roman Gerodimos PART I: FRAMING CONTESTS AND CRISIS MANAGEMENT 1. The Contradictions and Battlegrounds of Crisis Management Andrew Hindmoor and Allan McConnell 2. European Discourses on Managing the Greek Crisis: Denial, Distancing and the Politics of Blame Dimitris Papadimitriou and Sotirios Zartaloudis 3. 'The Good, the Bad and the Ugly': Stereotypes, Prejudices and Emotions on Greek Media Representation of the EU Financial Crisis Tereza Capelos and Theofanis Exadaktylos PART II: THE POLICIES OF EXTREME AUSTERITY 4. An Evaluation of the Austerity Strategy in the Eurozone: Was the First Greek Bail-out Programme Bound to Fail? Sotiria Theodoropoulou and Andrew Watt 5. 'Off-the-Shelf Reforms' and their Blind Spots: Pensions in Post-Memorandum Greece Platon Tinios 6. A 'Fairweather Welfare State'? Formal and Informal Social Protection and the Greek Crisis Antigone Lyberaki and Platon Tinios PART III: THE POLITICS OF EXTREME AUSTERITY 7. Protest Participation, Electoral Choices and Public Attitudes towards Austerity in Greece Georgios Karyotis and Wolfgang Rudig 8. Anger Management and the Politics of Crime in the Greek Crisis Sappho Xenakis and Leonidas Cheliotis 9. Re-organising Everyday Greek Social Reality: Subjective Experiences of the Greek Crisis Athanasia Chalari PART IV: THE CRISIS BEYOND GREECE 10. Structure, Agents and Discourse in Managing Economic Crises: Comparing Greece and Turkey Dimitris Tsarouhas 11. The Politics of Fiscal Efforts in Ireland and Spain: Market Credibility versus Political Legitimacy Sebastian Dellepiane-Avellaneda and Niamh Hardiman 12. Credibility Dilemmas during Economic Crises: Greece in the Argentine Mirror sebastian Dellepiane-Avellaneda 13. Reflections on the Greek and Eurozone Crisis: A View from the Inside George Papandreou CONCLUSION 14. Austerity Politics and Crisis Governance: Lessons from Greece Roman Gerodimos and Georgios Karyotis Bibliography Appendix: A Timeline of the Greek and Eurozone Crises Index

Crisis Management and the Institutions of Austerity: A Comparison of Latin American and Greek Experiences

The proliferation of debt crises around the world since the 1980’s has generated debt-repayment negotiations prioritizing austerity in debtor countries. This forty-year history of debt crises in the Global South and North now allows comparison of these negotiations and their impacts. We examine the distinct and historically specific trajectories in Latin American and Greece, highlighting the foundations of each experience of debt crisis. We focus on the institutions responsible for managing crisis and their reliance on similar austerity strategies to compel debtor countries into a neoliberal restructuring of their economies. This paper examines the similarities and differences in austerity policy through a comparative-historical analysis of Latin American and Greek experiences of debt crisis. The results of such policies and the political actors involved in implementing austerity are also examined.

Back to basics: fighting fraud and austerity

Purpose – This article aims to focus on the impact of the current austerity measures on UK public sector anti-fraud and financial crime investigative resource capacity building initiative developed over the years to tackle fraud against the public purse. Design/methodology/approach – The article draws on secondary sources of data and available literature on fraud and financial crime. Findings – Fraud is a challenge in the UK public sector but the cut-back on anti-fraud and financial crime investigative resources, given the scale of public sector fraud, the growing emphasis on accountability and the time of austerity with public money more exposed to fraud is arguably a back-door/u-turn policy on zero-tolerance approach in tackling public sector fraud and financial crime. There is the potential of this encouraging more fraud and financial crime against the public sector in the long term if measures are not taken to devise strategies for enhancing anti-fraud and financial crime investigative resource capacity. Research limitations/implications – The research implication for this article is that it opens an avenue for future studies to examine post austerity strategies for strengthening public sector anti-fraud and financial crime investigative resource strategies to deal with emerging fraud threats to UK public sector. Practical implications – This article acts as a reference guide for policymakers to reflect on the long-term adverse impact of the austerity on anti-fraud and financial crime investigative resource capacity and capability in tackling fraud public sector fraud. Originality/value – The paper attempts to present an alternative lens to examining the scale of UK public sector fraud problem rather than relying on headline story of declining fraud in UK.

The Impact On Mental Health of the Economic Recession in the District of Sassuolo (Modena): Opinions of Local Occupational Physicians

The recent economic recession and the subsequent strategy of austerity have deceased the amount of resources devoted to health care. They may also have contributed to the deterioration of the population health. To assess the impact on mental health of the economic recession in the district of Sassuolo (Modena), by collecting and analyzing opinions of local Occupational Physicians. METHODS Qualitative survey, by focus groups , conducted in Sassuolo (Modena), industrial center of ceramics, involving 8 Occupational Physicians active in the area. Rough descriptions analyzed independently by GU and GM using MAXQDA, with the independent supervision of a third researcher (SF), according to the principles of the General Grounded Theory . The second focus group was intendened as respondent validation of the first, yet it gathered further data, up to theortical saturation . Two focus groups, about one hour long, attended by 8 Occupational Physicians, 7 during the first focus group , 4 during the second (of these, 3 attending both focus groups ). The coding process yielded 261 segments, divided into four main areas: “changes in contemporary world” (16 coded segments), “social area” (82 coded segments), “medical area” (94 coded segments), “working area” (69 coded segments). The impact of the economic crisis on health produced mainly negative consequences, locally, consistently with national data. Psychiatrists should work together with Occupational Physicians to develop targeted interventions, addressing social, political and medical needs. A more structured liaison between Psychiatry and Occupational Medicine is an interesting and useful tool for future action and advocacy .

Portugal at the Eye of the Storm: Crisis, Austerity and the Media

The governmental change which took place in Portugal after 2011 was far more than just a new episode in the typical rotation between the two major political parties given that it occurred whilst the country was initiating a three year period of external financial control. As such the three political forces actively engaged in this rough transition have consistently pursued a stern austerity strategy imposed by creditors. This uneven platform (shaped by submission rather than by accord) has been the breeding ground for a discourse centred on the existence of a broad national consensus in support of the adopted draconian austerity measures. Irruptions of dissent have been met with contempt and have been dismissed as self-interested opinions or even as anti-patriotic. This article has four main parts. In the first one, the fundamental features of the economic and financial crisis and its consequences will be presented. In the second part, the political impacts and challenges of the crisis will be scrutinised. The political and economic impact is closely articulated with the current situation of mainstream media that is presented in the third part of the paper. As we will see in the last part of this article, a particular combination of factors in a country without financial sovereignty has created the perfect conditions for media reproduction of the government and creditors' discourses.

The alchemy of austerity

The return of austerity has provoked social conflict, political controversy and academic disputes. In this article we explore some of these through the metaphor of an ‘alchemy of austerity’ that forms the foundation for strategies of state retrenchment through which the consent of populations is sought. We begin, in ‘Magical thinking’, by tracing some of the discursive repertoires that circulate in analyses of austerity, showing something of its significance as a key term being mobilized in different international and national political discourses. We then go on to explore political strategies, with a particular focus on the UK in ‘Sharing the pain’. However, we suggest that such a focus offers a limited conception of politics that fails to illuminate the contradictory field of political forces put into motion by austerity strategies. This field of forces, we go on to argue, crystallizes around the problem of securing consent. In ‘Austerity and the problem of consent’ we examine this further, pointing to the proliferation of different forms of dissent and their relationship to austerity measures. We end by tracing shifting articulations of the moral and the economic by revisiting E.P. Thompson’s concept of ‘moral economy’.

The fruits of empire rot on the vine: United States health policy in the austerity era

Since 1970—with the decline in the hegemonic empire—the U.S. economy has entered a period of lower profitability, producing a major shift in the economic behavior of corporate capital. In contrast to the demand stimulation (New Deal) programs of the earlier period of prosperity capitalism, capital has moved toward a profit stimulation strategy in the current era of austerity capitalism. Fundamental to this austerity strategy is the drive to reduce costs of production. Both governmental and employee health benefits represent a cost of production. Thus in the health field, austerity strategy signifies a reduction in the provision of health benefits to employees and cuts in governmental health programs. An effect of austerity capitalism may be that health patterns now mainly confined to the underdeveloped world will become more prominent among the low-wage and unemployed sectors of the working class in the United States.

Canadian Municipalities and Conditions of Fiscal Austerity in International Perspective: A Report and Some Observations

Dans ce texte, les auteurs résument les conditions historiques bien connues, bases de la situation fiscale actuelle des municipalités canadiennes. A l'intérieur de ce contexte global, les stratégies d'austérité, utilisées par les fonctionnaires des administrations municipales ailleurs dans le monde, deviennent déplus en plus suggestives pour les administrateurs qui essaient désespérément de concilier les demandes de services avec la prudence fiscale. Les auteurs présentent des observations générales à partir de rapports récents sur l'Austérité fiscale vieille d'une génération et le projet d'Innovation urbaine en relation avec les résultats préliminaires de leurs propres recherches.