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Title: Fiscal policy coordination in times of economic and financial crises
Author: Rommerskirchen, Charlotte Sophie
ISNI:       0000 0004 5348 642X
Awarding Body: University of Edinburgh
Current Institution: University of Edinburgh
Date of Award: 2014
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This thesis examines fiscal policy coordination in the EU during the Great Recession (2008-2010). For the first time since the Maastricht Treaty heralded the coordination of macroeconomic policies among EU Member States, public finances were collectively focused on stimulus policies. In sharp contrast to the preceding decade of consolidation and constraint, fiscal policy coordination during the Great Recession presents a novelty: a study in fiscal expansion. Drawing on Mancur Olson’s Logic of Collective Action, this thesis uses a mixed-methods approach that combines the insights from over 40 in-depth interviews and econometric analyses. The central argument of this thesis is that the fiscal crisis responses of EU Member States were not coordinated. Yet despite this lack of coordination, free-riding was kept at bay. First, the overarching consensus on the need for counter-cyclical fiscal policies prevented growth free-riding (i.e. a situation of limited domestic stimulus and free-riding on other countries’ expansive fiscal policies). Second, discipline imposed by financial market participants contributed to policy-makers’ awareness of their limited room for fiscal manoeuvre, which meant that stability free-riding (i.e. stimulus policies that exceeded a country’s fiscal space) did not occur. The first finding suggests the importance of shared policy ideas in achieving collective action; the second points to the role of financial markets in constraining public finances. Ultimately both, shared policy ideas and market discipline, can function as a substitute for strong institutional commitment to shape group oriented behaviour.
Supervisor: Howarth, David; Hardie, Iain Sponsor: German National Merit Foundation (Studienstiftung des Deutschen Volkes) ; University Association for Contemporary European Studies ; MERCURY Project through the European Union's Framework VII programme
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: EMU ; European Monetary Union ; economic and financial crisis ; fiscal policy ; European Union