Surviving the Great Recession: Nonprofit Housing Developers Through the Lens of Organizational Theory

This study identified factors that influenced California nonprofit housing development organizations’ (NHDO) survival and financial stability during the Great Recession. NHDO typically develop and manage affordable housing, while providing social services. During the recession, NHDO financial issues were exacerbated and compounded by the elimination of state redevelopment funds. This research tested organizational theories through bivariate and multivariate analyses from Internal Revenue Service 990 tax forms for nearly 800 NHDO. In many ways, the factors that influenced NHDO sustainability and performance were similar to those affecting for-profits and other nonprofits. For example, older and larger organizations with more staff and revenue fared better. Other factors were unique to this sector (e.g., the region and type of housing developed affected outcomes). An important finding was that reliance on government funding was negatively associated with survival and revenue. The lessons learned from NHDO inform other organizations about surviving and thriving during tough economic times.     

Fiscal Crisis and Community Development: The Great Recession,Support Networks,and Community Development Corporation Capacity

Community development corporations (CDC) are a cornerstone of neighborhood improvement in legacy cities. Yet they face challenges that threaten their financial sustainability, challenges that grew exponentially with the Great Recession. This article examines the impact of the Great Recession on the revenue and survival of CDC in Baltimore, Maryland; Cleveland, Ohio; and Detroit, Michigan. An analysis of financial data from the National Center for Charitable Statistics from 2004 to 2011 highlights issues of industry contraction, revenue concentration and loss, and CDC survival. Interviews and examination of multiple secondary sources of information on CDC activity and support networks in each city further our understanding of the financial results. We find that the CDC industry in all three cities was severely impacted by the Great Recession and that the CDC support networks in each city had a significant intervening effect on the ability of CDC to adapt to the fiscal and service pressures created by the recession. We discuss the implications of the shared trends and the city-specific dynamics for the role of CDC in neighborhood improvement in legacy cities.     

Recalibrating Policy Orthodoxy: The IMF Since the Great Recession

This special issue reviews patterns of policy stability and change at the International Monetary Fund (IMF) since the Great Recession and attempts to explain their causes. The contributors show that the crisis ignited a reassessment regarding how the IMF would position itself as a pivotal player in global economic governance. Some new ideas and evidence definitely found their way into IMF decision making, but this process was often tempered by the nature of the institution and the powerful interests that control its governing structure. Where change did occur, its causal generators could be found in some combination between IMF staff politics, a string of innovations coming from academic and IMF economists, and the emerging economic powers' creative leveraging of institutional fora both within and inside the Fund.     

The European Union and political behaviour: The shadow of the Great Recession

The symposium aims to analyse the politicisation of the European issue following the onset of the Eurozone crisis, in particular its impact on individual attitudes and voting both at the national and supranational level. By way of an introduction, we address the state of the art on the importance of the Eurozone crisis for EU politicisation, as well as outlining each article and its contribution. While our authors may sometimes focus on different dependent variables, they all speak to the question of whether the Great Recession made a lasting difference, and whether EU politicisation matters. Most articles are longitudinal, and test for changes due to the crisis (Dassonneville, Lewis- Beck and Jabbour; Ruiz-Rufino; Talving and Vasilopoulou; Jurado and Navarrete). But preoccupation with the Great Recession is also present in the articles assessing the political learning that unfolded from it (Ruiz-Rufino), or the ones which investigate whether EU effects can be detected during the post-crisis years (Talving and Vasilopoulou; Lobo and Pannico; Heyne and Lobo). Despite the diversity of approaches, and certain differences in findings, each article contributes to a major debate ongoing in the literature, especially three key debates which have arisen: the crisis’ impact on European party systems, economic voting, and the degree of legitimacy of democratic systems.     

FHA in the Great Recession: Rebalancing Its Role

The Federal Housing Administration's (FHA) Mutual Mortgage Insurance Fund has a negative net worth as of FY2012, partly because of the weak economic recovery and partly because its policy has been directed to supporting homeownership at the risk of incurring more defaults. Although recently announced reforms should reduce losses, higher insurance premiums and lower loan-to-value ratios will still be necessary. But FHA faced and survived similar situations before, and should be able to do so again, without draconian limitations on its authority.     

Dynamics of protest and electoral politics in the Great Recession

This article links the consequences of the Great Recession on protest and electoral politics. It innovates by combining the literature on economic voting with social movement research and by presenting the first integrated, large-scale empirical analysis of protest mobilisation and electoral outcomes in Europe. The economic voting literature offers important insights on how and under what conditions economic crises play out in the short-run. However, it tends to ignore the closely connected dynamics of opposition in the two arenas and the role of protests in politicising economic grievances. More specifically, it is argued that economic protests act as a ‘signalling mechanism’ by attributing blame to decision makers and by highlighting the political dimension of deteriorating economic conditions. Ultimately, massive protest mobilisation should, thus, amplify the impact of economic hardship on the electoral losses of incumbents and mainstream parties more generally. The empirical analysis to study this relationship relies on an original semi-automated protest event dataset combined with an updated dataset of electoral outcomes in 30 European countries from 2000 to 2015. The results indicate that the dynamics of economic protests and electoral punishment are closely related and point to a destabilisation of European party systems during the Great Recession.     

Back to Basics: The Great Recession and the Narrowing of IMF Policy Advice

This article contributes to the literature on the dynamics of change and continuity in the International Monetary Fund's (IMF's) policy paradigm. The IMF embarked on a process of “streamlining conditionality” during the 2000s, but many observers have argued that the IMF's policy paradigm from the 1990s remains intact. This article examines whether the scope of the IMF's policy advice to borrowers during the Great Recession narrowed in comparison to its advice to borrowers during the heyday of the Washington consensus in the 1980s and 1990s. The article uses qualitative content analysis to establish the frequency of a series of policy dialogue indicators in four sample sets of countries requesting IMF stand‐by arrangements over three decades. The evidence suggests that contemporary IMF policy advice to borrowers continues to stress the importance of fiscal consolidation, with reduced emphasis on promoting the structural economic reforms associated with the Washington consensus era.     

The politics of social spending after the Great Recession: The return of partisan policy making

Prior research shows that the effect of partisanship on social expenditure declined over time in Organisation for Economic Co‐operation and Development (OECD) countries. In this article, the author argues that the 2007/2008 recession resulted in the reemergence of partisan policy making in social spending. This was a result of mainstream parties needing to respond to the growing challenge from nonmainstream parties as well as demonstrating that they responded to the economic crisis by offering different policy solutions. Using a panel of 23 OECD countries, the author shows that since the Great Recession, partisan effects on social spending are once again significant. These effects are more likely to be observed where the salience of the Left–Right dimension is higher. In accordance with classic theories of economic policy making, left‐wing governments are more likely to increase social spending when unemployment is higher and right‐wing governments restrain social expenditure when the budget deficit is greater.     

State Fiscal Strategies for the 1990s: Balancing Budgets in a Recession

The fiscal crunch facing many states in FY 1991 has its rootsin the recession, federal mandates, election-year politics,and rapid growth in spending for Medicaid and corrections. Southernand midwestern states that made drastic cuts in response tothe 1981–1982 recession have fared relatively well, butstates in the Northeast have faced tax increases, layoffs, cutsin services, and prolonged conflict over state budgets. Althoughthe tax revolt has not led to appreciably lower taxes, it hasmade raising taxes more difficult, and has heralded a shiftto "boutique government," which may create further fiscal problemsin the long run. State tax increases and spending cutbacks mayalso delay recovery from the recession.     

The Impact of State Rainy Day Funds in Easing State Fiscal Crises During the 1990–1991 Recession

This article examines the degree to which rainy day funds eased the fiscal stress experienced by states during the 1990–1991 recession. In the first section, a state fiscal policy of neutrality over the business cycle is used as a benchmark for evaluating the use of budget stabilization funds. The next section looks at data from the last three recessions to see how recessions have affected the taxes and expenditures of states. A measure of degree of fiscal stress experienced by each state during the 1990–1991 recession is then calculated. These results are used to empirically investigate the impact of explicit state rainy day funds in easing state fiscal stress. Next, the article examines whether states that had rainy day funds in 1989 were more likely to have less fiscal stress, and whether the specific deposit and withdrawal provisions of these funds made a difference.     

The Elections of the Great Recession in Portugal: Performance Voting under a Blurred Responsibility for the Economy

Abstract

This article discusses the basic patterns of voting behaviour in the most recent elections in Portugal. These elections were fought under one of the most profound economic crises in the country's four decades of democracy, after a bailout agreement with the EU and the IMF, and under an unusually high level of campaign polarization around the issues of economic austerity and liberalization. First, the article examines whether this context ended up being favourable to “performance” voting or, instead, to an enhanced importance of position issues, particularly those related to the role of the state in the economy and welfare provision. Second, it examines how the context of the Great Recession and the European sovereign debt crisis created opportunities for incumbents to use blame-shifting and blame-sharing strategies, and the extent to which voters' ambivalence about who to hold responsible for the sorry state of the economy was consequential for vote choices, either by directly affecting them or by moderating the relationship between economic perceptions and the vote.     

Varieties of Liberalism: Keynesian Responses to the Great Recession in France and Germany

This article argues that distinctive liberal traditions shaped France and Germany's Keynesian policy responses to the post‐2007 economic crisis. In France, “statist liberalism” privileges an activist state that favors macroeconomic intervention and investment. German “corporate liberalism,” by contrast, is more pluralist and emphasizes the powers and responsibilities of social and economic groups, who are viewed as the fundamental components of the social order. The article argues that these traditions shaped elite interpretations of the crisis and played central roles in defining policy trajectories. They informed a modest French response focused on macroeconomic stimulus that relied on existing income support and a larger German effort centered on a microeconomic strategy of group subsidization. It concludes that these outcomes are inconsistent with traditional institutional accounts and highlights the importance of research on the role of ideas in shaping national responses to economic crises.     

Homeownership,the Great Recession,and Wealth: Evidence From the Survey of Consumer Finances

The owned home is central to both the American Dream and the financial lives of U.S. households. This article explores the typical financial trajectories of homeowners during the Great Recession, assessing the viability of positioning home equity at the core of a household's balance sheet. Using the 2007–2009 reinterview panel of the Survey of Consumer Finances, we describe the diverse balance sheets of groups of homeowning households. While some homeowners lost equity and wealth in the Great Recession, we find that an owned home introduced severe risk of loss, but homeowners were less likely than renters to lose very large proportions of their wealth. The experience of homeowners' balance sheets during the downturn was diverse, and the typical experiences of different groups are compared and contrasted.     

The Effects of Political and Fiscal Incentives on Local Government Behavior: An Analysis of Fiscal Slack in China

This study examines the determinants of fiscal slack from the perspective of Chinese local government officials. Given China's rapid economic growth over the past 30-plus years, Chinese local governments reportedly hold huge slack resources that attract public scrutiny. In an effort to improve their fiscal performance, some localities recently established budget stabilization funds, following a top-down initiative. However, it remains unclear to what extent fiscal slack has accumulated and which factors affect slack resource levels of Chinese local governments. By employing a panel dataset (249 prefecture-level cities, 1999–2009), this study finds that political and fiscal factors exert significant influence over local officials’ decisions about slack resource levels. The findings of the study bear implications for establishing fiscal rules and improving the performance of sub-national governments in China and other countries.     

Child Poverty,the Great Recession,and the Social Safety Net in the United States

In this paper, we comprehensively examine the effects of the Great Recession on child poverty, with particular attention to the role of the social safety net in mitigating the adverse effects of shocks to earnings and income. Using a state panel data model and data for 2000 to 2014, we estimate the relationship between the business cycle and child poverty, and we examine how and to what extent the safety net is providing protection to at‐risk children. We find compelling evidence that the safety net provides protection; that is, the cyclicality of after‐tax‐and‐transfer child poverty is significantly attenuated relative to the cyclicality of private income poverty. We also find that the protective effect of the safety net is not similar across demographic groups, and that children from more disadvantaged backgrounds, such as those living with Hispanic or single heads, or particularly those living with immigrant household heads—or immigrant spouses—experience larger poverty cyclicality than those living with non‐Hispanic white or married heads, or those living with native household heads with native spouses. Our findings hold across a host of choices for how to define poverty. These include measures based on absolute thresholds or more relative thresholds. They also hold for measures of resources that include not only cash and near‐cash transfers net of taxes but also several measures of the value of public medical benefits.