The Liquidity Crisis: The 2007–2009 Market Impacts on Municipal Securities

This article surveys developments in the municipal debt market for their practical and conceptual implications for public financial managers and scholars. It provides an overview of the market crisis of 2007–9, focusing on what fiscal stress reveals about debt costs, the incidence of risk, and management methods. The first part focuses on the systemic factors—highly leveraged subprime mortgage instruments and collateralized debt obligations—that affected credit availability, interest costs, and the changing risk profiles of the debt instruments. The second part emphasizes the new institutional architecture of the borrowing environment: the collapse of the market for variable‐rated securities, the withdrawal from the market of traditional bond insurers, the diminished availability of credit enhancement instruments from banks, the demise of the standby bond purchase agreement, and the introduction of Build America Bonds. The article presents an agenda for practitioners and scholars as they face a borrowing future that differs markedly from that of the past.     

The Politics of Fiscal Responses to the Crisis of 2008–2009

The national fiscal responses to the economic crisis of 2008/2009 varied considerably. Some countries reacted with a strong demand stimulus, others intended to slash public expenditures, while a third group pursued mildly expansionary policies. There are strong reasons for governments to pursue a mildly expansionary policy. If governments depart from this default strategy in favor of a significant counter‐cyclical policy, they must be able to swiftly make decisions. Therefore, effective use of counter‐cyclical policy will be unlikely in cases where lengthy negotiations or significant compromises between governing parties with different views on economic and fiscal policy are likely. Therefore, a major determinant of the expansionary strategy is a unified government, usually in form of a one‐party government. If governments opt for pro‐cyclical policy in a major economic crisis, they do so because they have few other viable options. In this situation they tend to shift blame to international organizations.     

Public Management Policymaking in Spain: The Politics of Legislative Reform of Administrative Structures, 1991–1997

This case study focuses on extending research knowledge about the politics of public management policymaking in Spain. The case involves legislating to change politically sensitive features of the central government and administration. The study explains such analytically significant event conditions as: an agenda‐setting process that made a policy issue of the formal, structural attributes of state administration, an alternative‐specification process that proceeded without complication, and a decisional process that lasted five years and in which political leaders' positions on the issue flip‐flopped. Broadly speaking, the case analysis demonstrates that when policy proposals take the form of legislation, the politics of public management policymaking in Spain are highly influenced by political stream factors, themselves reflecting Spain's parliamentary form of government and relations between statewide and regional political parties.     

The New World of Crises and Crisis Management: Implications for Policymaking and Research

In recent years, we have witnessed a series of spectacular crises and disasters: 9/11, Madrid and London, the Asian tsunami, the Mumbai attacks, the implosion of the financial system—the world of crises and disasters seems to be changing. This special issue explores how these crises and disasters are changing and what governments can do to prepare. This opening article defines critical concepts, sketches a theoretical perspective, offers key research findings, and introduces the contributions to the special issue.     

The impact of Illicit Financial Flows on the South African political economy under Jacob Zuma, 2009–2018

South Africa has also fallen a victim of a greater major concern over the scale and negative impact of Illicit Financial Flows (IFFs) on the country's governance and developmental agenda. However, there is an unjustified observation that as one of Africa's biggest economies, South Africa is not a victim of IFFs. This observation shows that scholars and academic practitioners have not yet uniformly come to a cul‐de‐sac on this subject, and as such, this confusion constitutes a huge dichotomy on the subject matter. Based on Afrocentricity as the alternative lens, this article argues that there are after effects of the practice of IFFs in South Africa and that IFFs need to be given a special attention in order to curb them from destabilising South Africa's economic and political stability. Although this article discusses IFFs in general and how they come about, the central focus of this article is to unpack the impacts of IFFs under the Zuma administration and provide possible solutions. Methodically, this article relied on the prevailing continental and South African discourse circulating and thematic content analysis on conversations.     

The Financial Crisis: A Retrospective

Government efforts to manage the financial crisis and to promote economic recovery have been extensive over the past three years. Hundreds of billions of dollars have been distributed—and much of it now repaid—from the Troubled Asset Relief Program. The Federal Reserve holds more than $2 trillion in mortgage‐backed securities, collateralized loans to financial institutions, and other assets and liabilities to maintain liquidity in the financial markets. The American Recovery and Reinvestment Act injected more than $600 billion into the economy through tax breaks, loans, contracts, grants, and entitlements. Congress also passed the Dodd‐Frank Wall Street Reform and Consumer Protection Act in 2010. Yet economic recovery remains flat. The author examines the reform effort to date, key points of its primary focus, and the politics of implementing the reform as a factor in eventual economic recovery. One component of the reform, the creation of a Consumer Financial Protection Bureau, holds the greatest potential for changing the way consumers participate in the financial markets, but also has drawn the greatest debate and opposition. While regulatory reform alone will not revive the economy, a newly conceived and broadly participatory Consumer Financial Protection Bureau could simplify and streamline the complex linkages that contribute to the supply of credit.     

Opposition Policy Influence through Agenda‐setting: The Environment in Denmark, 1993–2009

This article addresses the opportunities that the opposition has to influence policy – a topic that has been neglected in existing party policy research. The idea that is developed is applied to a remarkable environmental policy development during the Danish right‐wing government in the 2000s. Contrary to its position when it took office in 2001, the right‐wing government turned green and adopted a series of green policy initiatives. It is argued in this article that vehement and persistent criticism from the left‐wing opposition provides an explanation for this turn. Taking media coverage, public opinion, carbon dioxide emissions and the government's approval ratings into account, the empirical estimation based on unique quarterly data shows that opposition criticism had a systematic impact on the government's pro‐environmental policy development. The implications for party policy research are important. If the aim is to understand how parties matter to policy, the opposition should be taken more seriously.     

The Evolution of Citizenship Norms among Scandinavian Adolescents, 1999–2009

In the recent debate about changing citizenship norms in advanced democracies, Scandinavian countries are often considered the frontrunners of the development of a new kind of engaged citizenship. The majority of recent empirical scholarship in this field, however, has focused on the United States. In this article latent class analysis is used to ascertain whether the ideal types of engaged citizenship and duty‐based citizenship norms are relevant concepts for adolescents in Scandinavia, and whether there are significant changes in these norms between 1999 and 2009. The findings confirm that engaged and duty‐based citizens can be clearly identified and that engaged citizenship norms are becoming more prevalent. It is also found, however, that engaged and duty‐based norms are not the only norms identified in the analysis, and that important differences are evident in the background characteristics of those ascribing to different citizen norms that contradict expectations in the literature. The article concludes with a discussion of the implications of these findings for changing citizenship norms in advanced democracies, including the potential implications of these changing norms for political behaviour.     

The military and bureaucracy in Greece – 1967–1974

This article attempts to examine and analyse the Greek military regime's (1967-1974) relations with the country's administrative apparatus. After briefly tracing the historical and ecological dimensions of these two institutions the article analyses their relations during the 7-year period on the basis of Eckstein and Gurr's superordinate-subordinate theoretical framework. The relevant data, which include interviews with senior civil servants as well as military officers, indicate that due to the nature of their profession, which emphasizes discipline and strict subordination, the military as political governors create an atmosphere to which the less regimented and more give-and-take-oriented bureaucracies have difficulty becoming accustomed. Military regimes and administrators do not enjoy the best of relations.     

Public Management Policymaking in France: Legislating the Organic Law on Laws of Finance (LOLF), 1998–2001

A watershed in the politics of public management in France was crossed in 2001, when the French president and prime minister signed off a law initiated by the French Parliament to reform the planning and control of public expenditure. This legislation, the Organic Law on Laws of Finance of August 1, 2001 (generally known as the LOLF), requires public authorities to adopt performance‐oriented ideas and public management approaches, and seeks to rebalance executive and parliamentary powers over the public purse. This article uses the LOLF as a case study to gain insight into the politics of public management policymaking in France as developed in recent decades. The article starts with an original historiographic account of the policymaking around the law, follows with a research argument explaining the policy choice, and concludes with some field‐level research questions on the politics of public management reform in France.     

The legislative consequences of Mexico’s mixed-member electoral system, 2000–2009

The emergence of mixed-member electoral systems across the globe has been an attempt to balance local representation through single-member districts (SMD) with programmatic representation through proportional representation lists (PR). However, there are several competing theoretical interpretations for the consequences of mixed systems on legislative bodies. Through a study of the Mexican Chamber of Deputies, I test several empirical implications of these competing theories by examining the impact of the electoral system on party discipline, participation, and legislative organization. I find little convincing evidence of differences between legislators elected through PR and those elected through SMD in their levels of party discipline, but I do find that PR legislators participate in a manner theoretically consistent with their mode of election. I also find that PR legislators have disproportionate control over key leadership positions. I suggest the primary reasons for these findings is due to differing methods of candidate selection and restricted use of dual candidacy.     

France and the International Financial Crisis: The Legacy of State‐Led Finance

Despite the far‐reaching liberalization of the French banking system over the past quarter century, French banks suffered far less in the international financial crisis (2007–2009) than banks in the United Kingdom and Germany. However, the French system also suffered far more—at least in the first stages of the crisis—than the banking systems of Southern Europe. By several measures, French banks were world leaders in financial innovation, and the French banking system was highly exposed to international market movements. The limited impact of the crisis, however, owed to the specificities of French “market‐based banking.” Deliberate state action over the two decades prior to the crisis created a specific kind of banking system and encouraged forms of financial innovation, the unintentional consequence of which was the limited exposure to the securitization that caused the damage wrought during the financial crisis.     

Paradigms and Paradox: The Politics of Economic Ideas in Two Moments of Crisis

This article argues that there is a paradox at the heart of Hall's “Policy Paradigms” framework stemming from the desire to see both state and society as generative of social learning while employing two different logics to explain how such learning takes place: what I term the “Bayesian” and “constructivist” versions of the policy paradigms causal story. This creates a paradox as both logics cannot be simultaneously true. However, it is a generative paradox insofar as the power of the policy paradigms framework emerges, in part, from this attempt to straddle these distinct positions, producing an argument that is greater than the sum of its parts. In the second part of the article, I discuss the recent global financial crisis, an area where we should see third‐order change, but we do no not. That we do not strengthens the case for the constructivist causal story.     

Cross‐Sector Transfer of Consolidated Financial Reporting – Conceptual Concerns

This article addresses a major concern about the use of particular accounting concepts, notably those of control and assets, for whole‐of‐government consolidated financial reporting. While whole‐of‐government consolidated financial reports may resemble the formats required by accounting standards and so provide a benchmark for comparative purposes, inherent weakness in the specification of underpinning concepts means that proper and full application of the consolidation methodology cannot be assumed. A study of the whole‐of‐government consolidated financial reports of the Commonwealth, state and territory governments of Australia revealed that significant assets, obligations and controlled entities have not been included.     

Working with Complexity: Community Engagement and the Murdi Paaki COAG Trial 2002–2007

Achieving improvements in indigenous health and education and reducing the incidence of crime and domestic violence in indigenous communities has proved heartbreakingly difficult. The Murdi Paaki COAG trial in western NSW aimed to break this pattern of failure by tailoring flexible Commonwealth and State government support to indigenous communities, working within a framework of shared responsibility. In this article we assess the trial as a policy strategy by comparing outcomes and patterns of outcomes across the sixteen communities. We found that the strategy worked best where ‘good enough’ governance was aligned with flexibility, rather than with control. This way of working is difficult for governments as it can be a slow process, and requires stability in the policy and engagement framework to deliver results. More broadly, our findings confirm the usefulness of complexity theory to illuminate and to explain the evolution of process in administrative contexts involving networked governance.