Asymmetric Adjustments and the Governance of the Eurozone Debt Crisis: A Complex Causation Perspective

Thursday, July 9, 2015
S13 (13 rue de l'Université)
Michel Goyer , Department of Management, University of Birmingham
Miguel Glatzer , La Salle University
RocĂ­o Valdivielso del Real , Liverpool Business School, Liverpool John Moores University
We investigate the character of the governance of the Eurozone debt crisis, namely the skewed distribution of the costs of adjustment which have bene imposed on debtor countries, not on lending banks from Northern Europe. This paper presents a complex causation perspective that highlights the contingent influence of ideas and institutions in the governance of the Eurozone debt crisis.

Ideas are important over policy outcomes as they constitute cognitive scripts and taken for granted practices that guide strategic behaviour by enabling state officials to interpret events around them and, in turn, delineate the range of considered policy options. The incorporation of ideas is insightful in the analysis of the governance of the Eurozone debt crisis given the presence of clashing cross-nationally based narratives about its roots and policy solutions.  

However, ideas do not translate in an automatic fashion into policies on the basis of their merits. The influence of ideas over outcomes is contingent upon the manner in which they are framed and the institutional context in which they are embedded. Framing enable policy-makers to build support for new policy proposals by presenting them in a manner that link an issue with a specific understanding of the world. The institutional context, on the other hand, structure power relations in an unsymmetrical manner among states and supranational European agencies that, in turn, result in diverging degrees of influence of policy-makers to impose their own ideas on other member states.