The Wealth Effect: Great Expectations & the Changing Politics of Banking Crises

Session Submission Type: Author meet critics

Session Description

This author meets critics panel for this recent CUP book includes contributions from four leading scholars in the political economy of international finance. In a discussion with the authors, panellists will offer critical reflections on the book’s argument and empirical evidence, and assess its implications for future research and policy. The book uses extensive historical and contemporary evidence to demonstrate that the politics of major banking crises have been transformed by the “wealth effect”: rising middle class wealth has generated “great expectations” regarding government responsibilities for the protection of this wealth. It shows that crisis policy interventions have become more extensive and costlier – and their political aftermaths far more fraught – because of democratic governance, not in spite of it. Using data from a large number of democracies over two centuries, and detailed longitudinal studies of Brazil, the United Kingdom and the United States, the book breaks new ground in exploring the consequences of the emergence of mass political demand for financial stabilization. It shows why great expectations have induced rising financial fragility, more financial sector bailouts and rising political instability and discontent in contemporary democracies, posing serious challenges to anyone concerned with contemporary policy and politics.

Sub Unit

• DIVISION 6: Political Economy

Chair

• Andrew Walter School of Social and Political Sciences, University of Melbourne

Presenters

• Jeffrey M. Chwieroth London School of Economics

• Mark Copelovitch University of Wisconsin, Madison

• Layna Mosley University of North Carolina, Chapel Hill

• Thomas Oatley Tulane University

• Cristina Bodea Michigan State University