↳ Crisis

August 15th, 2020

↳ Crisis

Another Lost Decade?

The systemic character of the global periphery debt crisis

Contrary to common beliefs on fiscal fundamentals, the current debt crisis in the global periphery demonstrates that the solvency of sovereign states is critically determined by their monetary power. Crucially, liquidity has a cyclical character in the periphery of global capitalism and a countercyclical character in the core.

During economic booms, when many contracts look safe, private actors are more prone to purchase assets denominated in peripheral currencies, which typically reward higher interest rates. But during busts, perceptions of asset safety may quickly change. Peripheral currency states are more vulnerable to suffering quick withdrawals from contracts denominated in their currency. Private investors seek the safest assets in the global economy, which, despite lower interest rates, guarantee low credit and market risks, high market liquidity, and limited inflation, exchange rate and idiosyncratic risks.

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May 26th, 2020

Radio

STATE CAPACITY IN THE US

Analyses of variation in state-level responses to the coronavirus tend to focus on party determination: On the whole, states led by Democrats have been found to undertake more rapid and extensive responses to the crisis. The focus on immediate political factors, however, masks the broader history of America's uneven and disaggregated bureaucratic capacity.

A 1982 book by STEPHEN SKOWRONEK presents one of the most comprehensive accounts of the origins of the US administrative state. Focusing on reforms in civil administration, the army, and national railroad regulation from 1870-1920, the book demonstrates how regional differences contributed to the particular character of American state development.

"Unravelling the state-building problem in modern American political development places the apparent statelessness of early America in a new light. The governmental forms and procedures necessary for securing order in industrial America emerged through a labored exercise in creative destruction. Modernization of national administrative controls did not entail making the established state more efficient; it entailed building a qualitatively different kind of state.

The Civil War brought national military conscription, a national welfare agency for former slaves, a national income tax, national monetary controls, and citizenship. Yet, this was a state grounded in only half the nation. As the South returned, national electoral politics changed, and these institutional achievements began to be undone. Here, then, was a state only in the sense of the word imputed to it by the interests and strategies of the mass electoral organizations controlling its offices. No institution stood beyond the reach of party concerns. The fate of the wartime governmental apparatus suggests that if new institutional forms are to constitute a new state, they must alter the procedural bonds that tie governmental institutions together and define their relationship to society."

Link to the publisher's page.

  • Theda Skocpol and Kenneth Finegold expand Skowronek's research into the New Deal era. Link.
  • "In societies where social status is a cleavage, elites can use the threat of desegregation to unite wealthy and poor members of high-status groups against taxation and the bureaucratic capacity required to collect taxes." Pavithra Suryanarayan and Steven White on "Slavery, Reconstruction, and Bureaucratic Capacity in the American South." Link. In another article, Roberto Stefan Foa and Anna Nemirovskaya analyze the development of state capacity on the frontier. Link.
  • Daniel Berliner, Anne Greenleaf, Milli Lake, and Jennifer Noveck present "systematic study of relationship between state capacity and labor rights." Link.
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