Politics of economic policy and outcomes

Project outline

 

This project focuses on how different electoral groups are affected by distinct economic developments and institutions, and how this in turn shapes the evolution of macroeconomic policies in Europe.

 

  • The New Trilemma of Advanced Capitalism: Democracy, Growth and Effective Climate Action (with Aidan Regan, Hanna Schwander, and Cyril Benoît). Forthcoming with Agenda Publishing (2026).
    This book contends that governments in advanced capitalist democracies now face a hard trade-off: liberal democracy, economic growth, and effective climate action are increasingly incompatible. At most, only two can be pursued simultaneously. This book introduces a bold new framework—the trilemma—to explain why democratic governments are failing to address the climate crisis with the urgency it demands. It reveals how democratic institutions, growth-driven economies, and short-term electoral incentives structurally obstruct the scale of decarbonisation required to prevent ecological collapse. Through an analysis of state capacity, political backlash, and distributive conflicts, the book issues a stark warning: unless a broad working- and middle-class coalition for climate action can be built within the next decade, liberal democracies may face rising authoritarianism, ecological breakdown, and economic turmoil. This is the defining political crisis of our time.  
     
  • The Great Moderation Revisited: On the Political Economic Origins of Inflation and Disinflation in the Advanced Capitalist World (with Bob Hancke). Forthcoming with Palgrave (2025).
    With the sudden, dramatic rise in inflation after the pandemic and the Russian invasion of Ukraine, the three low-inflation decades were, at least temporarily interrupted. What appeared to many observers as a simple, yet significant, supply-side shock elicited a surprising response by central banks, who raised interest rates to constrain the demand for goods and services, following a recipe that emerged in the 1970s and 1980s throughput the OECD. In response to high inflation in these years, governments of all stripes adopted a ‘monetarist’ outlook on macroeconomic policy, pivoting away from the prevailing Keynesianism. In this book, we look back at that period and examine the shift to a low-inflation regime in the advanced capitalist economies between the 1970s and 1990s. Conventional views emphasize the rise of monetarism as a new economic paradigm that convinced policy makers to delegate monetary policy to conservative and independent central banks. Others point to the structural imposition of restrictive policies through monetary hierarchies with the US Dollar at its apex, or the growing structural weakness of organized labour in deregulated capitalism. Our analysis instead directs attention to the political and electoral dimensions of these processes of economic policy adjustment. Economic ideas and their institutional expressions have unnecessarily dominated the debate, while the politics of the process, in particular the electoral effects of slow changes in crucial aspects of the life chances of working-class households, were ignored.

    This book claims that when job security increases and wages rose during the great post-war boom, the preference ordering of median (middle-class) voters on macro-economic policies shifted from a preoccupation with growth and employment to concerns revolving around inflation. These broad socio-economic shifts in their electorate then forced social-democratic parties, which held on longest to Keynesian policies, to adopt anti-inflation policies to remain electorally viable. Left parties played a pivotal role in the institutionalization of disinflationary regimes because their policies were ‘naturally’ anchored on the Keynesian pro-growth and pro-employment side of the debate: when they moved to the right on economic policy, the disinflationary monetary regime became the entrenched default policy paradigm. Systematic survey evidence on inflation preferences, descriptive aggregate material, and detailed case studies of the UK, France, and Germany, with shorter discussions of other countries including the USA and Sweden, underpin this argument. We close with an assessment of the politics of inflation in the post-Covid world in light of our argument.
     

  • Bojar, A. and Vlandas, T. (2021) “Group-specific responses to retrospective economic performance: A multi-level analysis of parliamentary elections”, Politics & Society [PDF]
    What is the relationship between electoral and economic performance? Previous literature posits that poor economic performance hurts the incumbent at the ballot box because overall economic performance serves as a competence signal, which voters can readily access at low costs. Building on an emerging economic voting literature exploring heterogeneity in the electorate, the article argues that social groups are affected differently by various dimensions of economic performance and their sociotropic sanctioning of incumbents is contingent on the retrospective performance of these dimensions. It theorizes how four social groups—low-skilled workers, pensioners, public sector employees, and high-income individuals—are differently affected by each of four economic dimensions—unemployment, inflation, stock market performance, and public spending—and as a result penalize the incumbent to varying extents. Results from a multilevel logistic regression analysis from four modules of the Comparative Study of Electoral Systems containing around seventy electoral contexts are consistent with the argument. 
     
  • Hancke, B. and Vlandas, T. (2017) “The Politics of Disinflation” LSE ‘Europe in Question’ Discussion Paper Series  [PDF]
    What explains the shift from the moderate to high inflation rates of the Golden Age of post-war capitalism to the low inflation regime of monetarism in the 1970s and 1980s? Conventional views emphasise the rise of monetarism as a new economic paradigm that convinced policy makers to delegate monetary policy to conservative and independent central banks – a view that comes in many variants, from constructivist to orthodox economics. In contrast to these arguments, we introduce electoral and party politics into the debate. This paper models and examines the shifts in the inflationary preferences of the median voter and their translation into party politics and economic policies. As the median voter accumulates nominal assets against a background of de facto and de jure increasing job security and rising wages, her preferences on macro-economic policies shift from concerns about employment-friendly to inflation-averse policies. Social democratic parties, who are pivotal players in this regard because of their ‘natural’ preference for high employment over low inflation, are thus forced to adopt anti-inflation policies as well to remain electorally viable. We show that the employment situation of the average worker improved in every respect during the 1960s and 1970s, that most of the population became inflation averse during the 1970s and 1980s, and that social democratic parties were forced to adopt more economically orthodox party manifestos. We then analyse the shift to a low inflation regime in a series of country case studies.