Financial Crises and Politics of Recession: A Comparative Analysis of 1997-98 Korea and 2009-10 Greece

• In Event: 594 - Section on Political Sociology Roundtable Session (one-hour).
  In Refereed Roundtable: Table 09. Economic Policy

Abstract

This article investigates how the socio-economic conditions within a country experiencing severe finical crises affect a government’s ability to enact austerity policies. Through a historical comparison of the political regimes, structure of social welfare systems, and adverse social conditions – corruption and public discontent with political institutions – in Korea (1997-1998) and Greece (2009-2010), I argue that the political strategy each of these countries had adopted for the sake of the pre-crisis growth, and their levels of social welfare spending prior to their respective finical crises, determined how their citizens reacted to austerity packages. In the Korean case, the growth-centered politics related to more public sacrifice, higher economic growth, and low levels of welfare spending kept the political costs of austerity manageable. Whereas in the Greek case, the populist politics related to higher government debt, greater prosperity, and high levels of welfare spending made them unmanageable. I expect this article to help unveil the complex dynamics underlying public reactions to financial crises for which the conventional explanations based upon adverse conditions cannot fully account, thereby broadening the further sociological debate on them.

Author

• Sang Kyung Lee, University of California-San Diego