Social policies during economic crises: an analysis of cross-national variation in coping strategies from 1980 to 2013

Abstract:

This paper provides a comprehensive analysis of the relationship between economic crises and social policy change for 13 European countries. Based on the degree of policy expansion and dismantling, we identify three potential crisis-coping strategies, namely ‘Muddling Through’, ‘Social Protectionism’ and ‘Austerity’. By means of multinomial logistic regression analysis, we test the effect of various factors on governments’ choice of crisis-coping strategies for 45 economic crises between 1980 and 2013.

Our analysis reveals that Austerity becomes a more likely scenario in crisis times. Moreover, we demonstrate that governments in consensual systems do not deviate from their true policy preferences when facing economic hardship. In majoritarian systems, by contrast, this pattern is strikingly reversed. Here, left-wing governments resort to Austerity, while right-wing parties opt for Social Protectionism. This indicates that both blame avoidance and the capabilities to mediate unpopular reform decisions can convert political parties from ‘Saul to Paul’ and vice versa.