The Politics of Macroeconomic Policies

The Great Recession dragged macroeconomic policies from the technocratic realm of “quiet politics” into the electoral realm of “noisy politics”. More recently, this repoliticization of macroeconomic policies was compounded by the COVID-19 pandemic, the rise of inflation, and the increasing salience of the climate crisis. Consequently, many macroeconomic policies are politically contested again, as the economy is not isolated from electoral competition in liberal democracies. Still, comparative political economy has not adequately studied the politics of macroeconomic policies in the twenty-first century. It lacks a clear understanding of how the distributive consequences of different macroeconomic policies translate into political struggles over power and policies. In this research project, I fill this gap by studying the political conflicts behind macroeconomic policies. In several co-authored projects, I analyze how economic interests are aggregated into political coalitions that rally around different economic policies in advanced economies.

A large focus of these projects is to examine the relationship between macroeconomic policies and two of the most important phenomena of our time: the green transition and rising inequality. For example, in a project with Donato di Carlo and Leon Wansleben, I examine whether and when local governments in Germany are able to govern for the long run by prioritizing investment spending. Using a novel dataset on local public finances, we show that a lack of fiscal and administrative capacity of many local governments undermines their ability to invest. In a project with Charlotte Cavaille, Lisanne de Blok, and Catherine de Vries, I then study whether voters constrain policymakers in their ability to use government debt to invest, for example, to fight climate change or to improve public healthcare. In other work, co-authored with Jeffrey Chwieroth and Andrew Walter, I analyze public opinion towards government interventions in response to financial crises that tend to increase wealth inequality. In related research with Jeffrey Chwieroth, I examine public opinion towards unconventional monetary policies, investigating the impact of information treatments that highlight the (adverse) effects on inequality. Overall, this work shows that preferences strongly respond to elite framing and information treatments, giving politicians leeway to manufacture support for and opposition to different policies.

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