Pathways from the European Periphery: Lessons from the Political Economy of Development

The European economic crisis need not be considered as a problem that is sui generis. Drawing on literature from the political economy of development that centers on finance and monetary policy, we show that the economic vulnerabilities and policy predicaments facing the European periphery share man...

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Bibliographic Details
Published in:Studies in comparative international development 2018-06, Vol.53 (2), p.239-260
Main Authors: Dellepiane-Avellaneda, Sebastian, Hardiman, Niamh, Pagoulatos, George, Blavoukos, Spyros
Format: Article
Language:English
Subjects:
Analysis
Center and periphery
Credibility
Developing countries
Economic aspects
Economic crisis
Economic development
Economics
Emerging markets
European Monetary Union
Finance
Gold standard
LDCs
Legitimacy
Markets
Monetary policy
Monetary unions
Money
Political economy
Political finance
Politics
Social Sciences
Unions
Volatility
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Summary:The European economic crisis need not be considered as a problem that is sui generis. Drawing on literature from the political economy of development that centers on finance and monetary policy, we show that the economic vulnerabilities and policy predicaments facing the European periphery share many similarities with problems encountered by middle-income developing countries. Three main concerns guide our discussion: the politics of credible commitment, the significance of state capacity for stabilizing credibility, and the challenges of maintaining democratic legitimacy during times of financial volatility. Our analysis of the dynamics of hard currency pegs and monetary unions draws on lessons from the classic Gold Standard and on more recent experiences of financial crises in emerging markets. We consider how these may apply to the Eurozone periphery, before drawing out some implications for the problems of core–periphery relationships in European Monetary Union.
ISSN:0039-3606
1936-6167
DOI:10.1007/s12116-018-9261-6