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LSE: Public lectures and events
The Political Consequences of the Great Recession in Europe: electoral punishment and popular protest
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- [00:02]
A
Welcome, everyone. Welcome to this fourth lecture in the Euro Crisis at LSE series, which is co organized with Policy Network and the European Institute here at the London School of Economics. It's a great pleasure for me today to welcome Professor Hans Peterkresi, who is at the moment the Stein Raucken Chair of Comparative Politics at the European University Institute in Florence. He's held many other distinguished professorships at the University of Zurich, Geneva and Amsterdam. And he's, as I'm sure most of you will know, one of the foremost political sociologists in Europe. His work, I think, expertly combines sociology and rigorous comparative politics, which is rare, and it's transformed our understanding of European politics in many different areas, in the areas of new social movements and the study of direct democracy. And most recently and very significantly, his work has provided a new map of political conflict and cleavage politics in Europe in the age of globalization. So I can't imagine a better person to enlighten us about the consequences of the Euro crisis for electoral politics and protest movement across Europe. So I'm delighted to introduce you to Professor Hans Peterkreczy.
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B
Thank you.
- [01:27]
C
It is a great honor for me to be here and I hope I can fulfill the expectations. I'm talking about something which is new to me and a lot of what I will have to say is quite exploratory. So I will first introduce you to some theoretical ideas about convention and contention. The political consequences of the crisis are electoral consequences, but they are also consequences in terms of political protest. And what I would like to do is to bring together two types of literatures which usually don't speak to each other. On the one hand, the literature on electoral politics, and on the other hand the literature on political protest and social movements. Then I will show you the results of some quantitative analysis of the electoral impact of the crisis. And I will go on to present two case studies which allow me to discuss the interaction between convention and contention in these two cases. And then I draw some conclusions. Now, the starting point of the consequences of the crisis is that people are very angry about the crisis because they have serious grievances. Now, a group with serious grievances can do two things. It can raise its voice or it can exit from policies. And whether it will raise its voice or whether it will exit depends on organization on the one hand, and on opportunities on the other hand. And to raise one's voice in a democratic society is to vote. The first way to express discontent and to voice grievances is in the electoral arena, because we have all learned that we have a political right and our political right is expressed in the electoral arena. There are other institutional arenas where we can raise our voice in some countries more than in others. I will point to some of these other channels. And there is of course also the possibility to raise one's voice in the protest arena. Now, in the electoral arena.
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B
First.
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C
There is a big literature on economic voting. What does this literature say? The hypothesis of this literature is very simple. A rational voter revolts the incumbent, and the incumbent is either the chief executive, the prime minister in Great Britain, or the governing coalition. In consensus democratic or PR countries, there are cabinets governing coalitions. So these incumbents are rewarded when the economy is good and they are punished when the economy is bad. In normal elections. Dutch and Stevenson have shown economic voting is both pervasive and variable depending on the context of the country. The expectation is, of course, that in times of crisis, in an economic crisis, economic voting is even stronger than in normal times. So we expect that sitting governments are punished when the economy is bad. Economic voting, the literature shows, is context dependent. And one of the critical variables is the clarity of political responsibility, the punishment that has been shown by Powell and Whitten, the punishment is stronger where government responsibility is clearly identifiable and governments can be held accountable. And governments can be better held accountable in majoritarian systems, that is, in systems like in Great Britain, whereas in PR systems, consensus democratic systems, responsibility is diluted and cannot be attributed as in majoritarian systems. There is another idea on context dependence, which has to do with the openness of the economy. Empirical analysis have shown that voters understand that governments cannot do everything when the economy is open, when capital mobility is high, when the exposure to the world economy of the national economy is important. So this is the government constrained hypothesis, which argues that in open economies, the electoral punishment in times of crisis might be less than in more closed economies. Now, the economic voting literature is very good when it comes to to studying the fate of incumbents, but it doesn't have much to say about the parties which benefit from the punishment of the incumbents. And there are different possibilities. The voters who are frustrated could turn to established opposition parties. And that's mainly what might happen in Western Europe. In Central and Eastern Europe, party systems are much less institutionalized than in Western Europe. And as it happens, we know that in elections in Central and Eastern Europe, new parties come up at every new election, and these new parties may even go to win the elections. So what happens in Central and Eastern Europe oftentimes is that a new party, mainly a centrist party, comes up and wins the elections, and in the next elections it's voted out of the parliament again. The second hypothesis would be a populist hypothesis, that is, the voters turn against all mainstream parties and take or favor challenges from the left or the right, the extreme left or the populist left, and the populist right. More specifically, the populist right hypothesis would stipulate that the voters mainly favor the populist right. And this is a hypothesis which is suggested by our previous work, because we have shown that in Western Europe, the populist right has been highly successful in electoral terms in many countries, even before the crisis. And then there is the exit hypothesis. Voters might turn against all existing parties and vote for anti parties, or they might abstain. They might be so disgusted with politics that they no longer would. They might turn to alternative channels, alternative institutional channels. In many countries there are direct democratic institutions which allow the voters to vote on issue specific questions. They might also turn to litigation in court, or they might appeal to other government institutions, for example, against the Prime Minister. They might appeal to the President. And when we discuss the case studies, we shall see that this indeed has happened. Or the voters might turn to the protest arena, that is, in the words of Schachzneider, they might turn to the expansion of conflict of outside of the traditional political channels. They might unleash a debate where there has been none before, in order to draw public attention to their predicament. And the idea is that they, at least in Western Europe, voters have increasingly done this because, according to the felicitous phrase of Maya and Tarot, West European societies have become movement societies. That is, protest has become part of a normal repertoire of doing political action. Dieter Fuchs, a German colleague, has called this the normalization of the unconventional. So it is nothing special today when voters turn to the protest arena. But that has also a drawback. The drawback is that protest is not so newsworthy as it was before. Some demonstrations go unnoticed, are not even reported in the public sphere. And that means voters have to step up their protest. They have to radicalize in order to have an impact. And under the impact of the economic crisis, we can imagine that they step up massively their protest and create with the purpose of creating a political crisis of extraordinary proportions in a given country. Now, how I said before, I'm interested in the interaction between electoral reactions and protest reactions. And how do these two, two types of reactions interact? There are several ideas which I have in this respect. One is the triggers. My assumption is that the government takes the initiative. So the government, for example, takes austerity measures and the population reacts. The challengers react to government measures. So the likely triggers of the reactions of are in the crisis, austerity or restructuring measures, which have been either unilaterally domestically initiated or which have been the result of the intervention by the imf, the troika or some other external actor. How about the channels of reaction? National elections follow their own rhythm. That means that maybe the opportunity to throw the rascals out to punish the incumbents does not come up immediately. So there might be, however, a secondary election, a regional election, a local election, or a European election, which serves as the possibility to put pressure on the national government, and which might serve in such a way as a referendum on the national government. There might also be the possibility to mobilize in alternative channels, as I already said, in order to put pressure on the government or in order to influence future electoral campaigns. How about the mobilizing organizations? Who would be a candidate for the challenging organizations? On the one hand, certainly the opposition parties and the smaller parties at the periphery of the party system, but also organizations directly targeted by the austerity and the restructuring measures. For example, labor unions of public employees, pensioners and student organizations. Or, for example, the targets of liberalization measures, like farmers, taxi drivers, truckers or pharmacists. For example, in Greece, the truckers in 2010 have launched a massive strike when the government threatened to take away their licenses, which imposed a cartelized market on transportations in Greece. Now results. What can challengers obtain by challenging the government? First of all, they can obtain procedural concessions, a change of leadership in the governing parties, cabinet reshuffle, resignation of minority partners of the government, call for early elections, ceding responsibility to caretake a government of technocrats. For example, in Italy, Mario Monti is a technocratic government which replaced the incumbent government of Berlusconi, or in Greece, also a technocratic government which took over from the elected government. They can also obtain maybe constitutional change, and possibly they, of course, want to obtain not only procedural concessions, but also substantive concessions. But these are difficult to obtain. And governments, in the times of crisis, typically are caught between a rock, international pressure and a hard place, the domestic expectations. Peter Mayer from the European University Institute. He talks about the dilemma of responsibility and responsiveness. What does he mean? He means governments have to be responsive to their citizens. They have to fulfill the expectations of their citizens, and if they don't, citizens are dissatisfied and mobilized against them. But at the same time, governments have also to be responsible with Respect to a whole series of stakeholders which are not their citizens. For example, other governments in the European Union, in the European Council, they have to be taking, they have to take into account the opinion of other governments or they have to take into account the opinion of the bond market, they have to be credible on the bond market and so forth. There are a whole series of stakeholders and the dilemma of responsibility and responsiveness imposes on governments very difficult choices. Now, how does convention and contention possibly interact in times of cris? I take my ideas from Kara Pin, that's a colleague who. That's a colleague who wrote the paper in Mobilization, that's a social movement journal. And he made the distinction between opportunity increasing and threat increasing dynamics. In the opportunity increasing dynamics, the challenger finds support in the political system, allowing them to enlarge their coalition and eventually to obtain concessions. In the threat increasing dynamics, challenges are increasingly repressed, their access channels are closed and even what they already have in a status quo is put into question. Now, under what conditions can we expect which one of the dynamics, the opportunity increasing dynamics can be. I mean these are speculative ideas and I told you it's an exploratory talk. These are opportunity increasing dynamics are possible when challengers face a government composed of traditional allies, for example, when public employee unions face a government of the left and, or when there are some other public authorities capable to check the government's decision, for example a president or the courts or people in a referendum vote. Threat increasing dynamics. That's the opposite. That's when you face a government which is usually your adversary or, or when you have no other public authorities at the disposal which are able to check the government. And there is the possibility of a combination of these two scenarios. In a first step in a crisis, you mobilize against the austerity measures. You might obtain procedural concessions, that is a government reshuffle or change of leadership in the governing party. You might even put pressure on the government in secondary elections, in a referendum and you might punish the government in national elections. Then there is a second step. The new government might just be forced to do what the old government has done. Take the Irish case and Kenny has proposed to renegotiate the deal between Ireland and Europe. And Europe just said no way. We stick to our previous deal and you have to fulfill the expectations which we negotiated with your previous government. So the voters actually, in this no choice situation, the voters might turn to alternative options. If their vote has no consequence, they might turn to populist challengers. In Greece, they have first voted 2009 in the first elections after the crisis, they have first voted for the mainstream opposition and then in the second election after the crisis, that is last spring in 2012, they have still majoritarily voted for the mainstream parties, but they have massively. About 40% of them also voted for populist alternatives like Syriza, Krisi Avgin, or they might even turn to anti parties. In Italy, we have now a party, it's a Movimento, Movimento di Cinquestelle. It's a movement which participates in elections and which is expected to make about 13%. In Sicily, in the regional elections in spring, a month ago or two months ago, they made 18%. So the voters turn to comics or outsiders, really outsiders of the political system who are against all members of the political elite. Or they may turn away from the electoral channel in general, abstain or radicalize and mobilize in the streets to create a political crisis. How this turns out is dependent on government reaction. So you see, what I have in mind is a two step procedure. Electoral punishment might be a first step. In a second step, if electoral punishment does not lead to any alternative policy, but just confirms what the previous government does, voters might be fed up with electoral politics altogether and turn away and mobilize in the streets. In Greece we are. I mean, I interpreted the Greek situation. We are in a situation after step two. Maybe you have read the newspaper last. The underground in Athens, workers have organized a strike for a week and then the government has intervened. The government reaction was repressive, no concession. The government intervened and under threat, massive threats of massive sanctions called the workers back work. Now these are the theoretical ideas. Now I come to part two, the economic voting. The empirical analysis. I go through this very briefly. What I did. I compared the last elections before the crisis with the first election after the crisis. In 29 countries. There are 31 cases. They are all EU member states plus three non member states, namely Switzerland, Norway and Iceland. The units of analysis are I look at the vote for the Prime Minister and the vote for the cabinets. That is all incumbents in a given election. So the dependent variable is indeed the first post crisis election. And post crisis is after the crash of Lehman brothers in fall 2008. The clarity of context is based on a distinction between PR and majoritarian countries. Here are the majoritarian countries and I measured the gravity of the crisis. My main independent variable, either with growth rate in the year preceding the election, the unemployment rate at the moment of the election, or the budget deficit in the year preceding the election. Year. If you add, just as an exercise to illustrate how serious the crisis has been in different countries, I have added up these three indicators to a grievances index. And you see at the time of the election, this index was highest. At the time of the first post crisis election, this index was highest in Ireland, Iceland, Spain, Portugal and Greece in Western Europe and in Latvia, Hungary and Lithuania. In Central and Eastern Europe you see that there are also countries which were not very severely hit by the crisis. Norway, for example, didn't have any problems at all. Norway has oil. Norway has a lot of money and no problems in terms of budgetary deficit. They had a 19% budgetary surplus. But Switzerland, Finland, Slovenia, Malta, other countries which did not at the time of the election not have serious problems and we expect their governments were not sanctioned. So what I show you now is the post crisis electoral support of incumbent parties as a function of their pre crisis results and as a function of the clarity of responsibility. So before I show you the economic part of it, this first table, it's very simple regression. I did it separately for Western Europe and Central and Eastern Europe, and I did it on either side separately for the Prime Minister's party and for the cabinet parties as a whole. What do you see here? You see, the pre crisis election result has a very strong effect on the post crisis election result in Western Europe, but not in Eastern Europe. In Eastern Europe you cannot virtually, you cannot predict the post crisis election result with a pre crisis election result. I mean, this is very important to keep in mind in Eastern Europe something else is going on. They have as I said before, highly volatile non institutionalized party systems which see the creation of new parties all the time. So in every election, also before the crisis, you could not predict the next election on the basis of the previous election results. What you also see in majoritarian countries in Western Europe, the punishment is bigger than in PR countries. The effect is 5% for the Prime Minister's Party and 2.6% for the Cabinet as a whole. Now, how about the impact of the economic situation? Let's look first at GDP growth and change in electoral support for the cabinet. You see two lines, one steep line. This is what we expect. That's the dashed line. The greater the economic growth, the greater the support of the incumbents. And the lower the economic growth, the lower the support for the incumbents. That's Eastern Europe. In Western Europe the line is flat. It's the solid line. It's almost flat. And that means no punishment for bad economic growth. And that has something to do with these three countries, Luxembourg, Iceland and Germany, which are the ones who did worse at the time of the election in terms of economic growth, but whose governments were not more severely punished than other governments in Western Europe who came up for election? We can, in the discussion, we can come back to these cases and ask ourselves why, for example, the German CDO was not more punished than it indeed was. If we do it formally, we can see indeed that the effect of growth is significant in Central and Eastern Europe. It's not significant in the West. In the west, only in majoritarian countries, the growth rate had an impact on the post election results. So the results are mixed so far. I don't show you unemployment, to be brief. I show you, however, the impact of the budget deficit in the previous year on the support of the Prime Minister's party. And here you see very nice relationship. It's a very strong relationship. The bigger the budgetary deficit, that is, the more to the left you go, the greater the punishment, the lower the point on the vertical axis. You might think that this relationship has something to do with the outliers, Ireland on the one hand, and Norway, the country with oil on the other hand. But this is not the case. If you take out Norway and Ireland, you get the dashed line, which is even steeper than the solid line. So this relationship really seems to hold. What I did, I did it again separately for Central and Eastern Europe and for Western Europe. And you see three lines. The solid line is Western Europe. So in Western Europe that seems to be a strong effect. The other two lines are Eastern Europe and the difference between the two lines is Slovakia and Poland. If you take out Slovakia and Poland, you get the parallel line to Western Europe. That is, the relationship is the same, only punishment is generally greater in Central and Eastern Europe. Why Slovakia and Poland? I mean, these are exceptions and they are, at least as far as Slovakia is concerned, telling exceptions. Slovakia became, in the year of the first elections, after the crisis, on 1 January 2009, became a member of the Eurozone. And this was for the Slovakian government, a great achievement. So the Slovakian voters were re electing the sitting government because it has been so successful that became a member of the Eurozone. Poland got very well through the crisis for other reasons. So the Polish government was not punished to the extent as it might have been because of its government deficit, because Poland in general did quite well in the crisis. Here again is the formal analysis. I don't want to go into the details, but note, in Western Europe, the deficit plus the Clarity of responsibility and the interaction between the two explain about 90% of the variance. So we don't do so badly with the deficit and the clarity of responsibility in Eastern Europe, it's for the cabinet and without Poland and Slovakia, we can also explain about 90% of the variance with the deficit and the GDP growth rate. So what intermediary summary what did we learn? The economic voting hypothesis is more or less.
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B
Confirmed.
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C
Incumbent parties are severely punished for the crisis. They are most punished in situations where the clarity of responsibility is given. The trigger of the punishment varies in West European countries. I didn't show you that. But there unemployment rates are important. In Central and Eastern European countries, growth rates are more critical. And in all countries budgetary balances are crucial for the punishment of incumbent parties. Now why are budgetary balances crucial? And in order to answer this question, I now turn to case studies and I took one of the countries from Western Europe and one from Eastern, Central and Eastern Europe. So let's look at Iceland first. It's a tiny country, but it's very interesting what happened under the impact of the crisis there. It was the first country to be hit by the crisis. It was a banking crisis. In Iceland, like in the United States, it was a banking crisis and the government, the three big banks in Iceland broke down almost immediately after Lehman Brothers. And the government had to nationalize these banks. But in addition, it became the victim of the intervention of the imf. It had to go to the IMF and ask for support. It was the first Western European country after Great Britain in 1976. So at that time a very exceptional intervention. The IMF imposed capital controls in order to stop devaluation, which had already reached 70% at that time. It restructured the banking system, including the recapitalization of the banks and including the guarantee of the savings of foreign depositors. This is a very important aspect of what happened in Iceland. In Iceland, the big banks had so called ice safe accounts. These were deposit accounts mainly of British and Dutch citizens who had invested into these deposits in order to have high interest rates. And under the Treaty of the European Economic Area act, which was signed by Iceland in 1994, Iceland was obliged to guarantee the savings of these foreign depositors out of the pocket of Icelandic taxpayers. Then it imposed austerity measures for fiscal consolidation. Now in Iceland there were opportunity increasing dynamics. The population protested at the end of December, beginning of January, in the so called pots and pans revolution. Iceland is a tiny country. 2000 people went in front of parliament and banked on pots and pans made noise with pots and pans. And that was sufficient to create a dramatic political crisis which brought down the government, brought down the prime Minister. The minority partner in the government was the Social Democratic Party, which got cold feet because its own people had mobilized in this pots and pan revolution. And early elections were called economic voting was massive. The Conservative Party, which was the prime minister's party, it had exchanged its leadership, but that was not sufficient. Minus 12.9%. It was its worst result in the post war period. It was massively punished because it had governed from 1995 up to this moment. The coalition partner was not punished. The coalition partner who had brought down the government, the Social Democratic Party, actually became the new governing party. So the Icelandic voters had turned against the Conservatives to the main opposition party. Now the government negotiated this deal with the British and the Dutch government in order to guarantee the ice safe accounts. But the people did not like it. So the people mobilized in a petition. About a quarter of the Icelandic voters signed the petition against the Isafe deal. And the president heeded the call. The president, according to the Icelandic constitution, can call a referendum when the voters demanded. And he did do this. So he organized a referendum for this Isafe deal. And twice that happened. Twice. Twice the voters rejected the deal. So the taxpayer said, we are not paying for these British and Dutch deposits. So what is important from my point of view, the direct democratic institutions were used to put additional pressure on the government. And the government could use this pressure in the international negotiations with British and Dutch governments. And it could say, our hands are tied. I mean, our voters want a better deal and they got a better deal in the end. The deals they got from the British and the Dutch governments were much better, although in the very end these deals were not respected either. So what did the discontented voters do? They first endorsed the mainstream party. But because this party negotiated deals with the other governments, the voters became discontented with this mainstream party as well. And they turned against all mainstream parties in the next local elections, the next election. There have not been yet other national elections, but the next elections were local elections. And what did they do? They opted for the populist or anti party strategy. In Reykjavik, the capital of the country, they voted for John Gnar, that's a comic, Pepe Gaylor style, who promised to break all campaign promises. So they turned again. He made a plurality of the votes, 39%, and became mayor of Reykjavik. The voters in Iceland had some success in the process. The constitution was revised and as I already told you, there were These referenda. And these referenda in fact, in fact had substantive success. They strengthened the hand of the government negotiators with the foreign investors, and the government negotiators obtained a more favorable deal. Actually, in the end they didn't pay anything. There was just last week there was a court decision of the European Economic Area Court, which decided that the Icelandic banks would not have to pay for the Dutch and the British depositors. That was last week. So this is a success story. It's actually only success story because in all the other cases, the challengers did not obtain any substantive concessions. Now, Latvia is in one point very different from Iceland, and that is, as I see it, is common to all Central and Eastern European cases. Popular protest preceded the economic crisis in these countries. And the important point was corruption. In Latvia, corruption triggered a popular Revolt. Already in 2007, it was the so called umbrella revolution and the people again direct democratic institutions were used. The people turned to the direct democratic channel, asked for a referendum vote in particular for a constitutional change which should introduce the popular right to the dismiss Parliament and call early elections. Now, the government was very smart. It put the vote on the agenda during the summer vacations and they have a quorum of 50%. So during the summer vacations, nobody was around and only 40% participated in the vote. 95% accepted the constitutional change, but the quorum was not reached. So too bad for the challenges. But then came the financial crisis, and the crisis revealed the economic vulnerability of the country. Again, the IMF intervened and imposed a rescue package, restructuring of the banking system and severe austerity measures. For example, 25% cut in public sector salaries. And that unleashed massive protest. And this massive protest, interestingly picked up again the idea of constitutional change, that is the possibility to dismiss the parliament before the next election. So that means organization of early elections. Now, in this case as well, the people got an unexpected ally in the form of the President of the country. The president, indeed, once these massive protest events in January had taken place, the day after, he put pressure on the Parliament. And he said that if the Parliament does not accept these constitutional changes, he will dismiss the Parliament and call early elections. Parliament heeded the call. First of all, the Prime Minister stepped down. There was a reshuffling of the cabinet. The parties were the same, but there was the former minority partner became a member of the former minority partner, became the Prime Minister. And this new cabinet and Parliament accepted the constitutional change. And the President accepted that Parliament had heeded his call. Nevertheless, for different reasons, early elections were held and the electoral punishment of the Prime Minister's party during the crisis was exemplary. This party lost 21.4%, was diminished to a minor party, but otherwise, I mean, nothing happened in substantive terms, Latvia has recovered from the crisis very well in the meantime. But thanks to all, in spite of very drastic austerity measures, I come to my conclusion. What do the case studies show? I mean, I told you these stories rapidly and a bit sketchy, but in my view, they show that popular contention closely interacts with conventional electoral power politics. Popular reactions intervene in between elections, but they influence the electoral cycle and they influence also the behaviour of parties. Without elections being held, for example, leaders of parties are changed or cabinets are reshuffled. And that has important consequences for the policy. Even if. I mean, in Latvia, for example, there was a constitutional change, it was a procedural success, even if there was no substantive success, the protest, and this is true of other countries as well. In both of the cases I showed you, the protest was triggered by interventions from the outside by the imf, and it was triggered by the austerity measures which were imposed by the IMF rescue packages. And I think this is the missing link between the budgetary deficits and the electoral punishment which I showed you before. This electoral punishment is a reaction. If you have large deficits, you become the object of interventions from the outside. You have to adopt austerity measures, and the reaction against these austerity measures leads to electoral punishment in the final event. You can see that also in Ireland, you can see it in Greece, you can see it in Portugal, and you can see it in Spain. So in the countries which are most severely hit by the crisis, it's actually the intervention from the outside. Or in Spain, for example, these austerity measures were adopted unilaterally, or the decisions of the governments to do something about the budgetary deficit. There's this important difference between West European and Central and Eastern European countries. In Western European countries, the crisis triggers the protest. In Eastern European countries, it amplified an already existing protest. Hungary would be another case. In Hungary, there was a big crisis already before the outbreak of the economic crisis. The case studies show that government coalitions become unstable, cabinets reshuffle. They show a lack of loyalty of minority partners, which might explain why the Prime Minister's party actually are hit more by the economic indicators than the other cabinet members. These are the allies, the importance of direct democratic instruments. And finally, very importantly, the impact of protest is very limited. In the countries which I have looked at more closely, there was no, except in Iceland, no substantive success of protest. Thank you very much.
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A
Well, after this very interesting and stimulating talk and these very interesting findings, I'm sure that you will have many questions. So we'll open the floor to questions now. We'll take two or three and then give Professor Crazier time to answer them. Before you ask your question, if you could please introduce yourself and the institution you represent, if any. Johannes.
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D
Johannes Lindner, European Central Bank. I thought your talk was very interesting because it really focuses on the question of how national political systems are dealing with crisis and the aftermath of crisis, and so how are they capable, in a way, of having the interaction with the national public? Yet I was puzzled because in the discourse that I've been following, we see Latvia as a very positive case. And I feel your normative construct that you present is a bit simplistic in the sense that you say, well, there is the imf. These are the bad guys. They come in, they dictate austerity, and therefore the protest is legitimate. I'm exaggerating a bit, but I would like to push you on this a bit because I think a key issue here is that these were governments that failed to do their. Failed to do their job. I mean, in Iceland, they have seeingly allowed a financial sector to clearly exceed the GDP of the country. They didn't do any proper supervision or market prudential supervision. Then Latvia is the same in the sense that here was a government that realized, okay, with the help of the imf, we need to address the problems that we have and in a way showed. That's my way of how I would portray it, showed leadership and said, here we need to convince the public, or we need to tell the public, stay on, the reforms will pay off. And in the Latvian case, the reforms have paid off. So the two points I want to make is. First, isn't it a bit too simplistic to say, so just a bad IMF is coming in and is asking for policies that are over the top. And this neglects the fact that these governments have done mistakes leading them into the situation they are in. Secondly, what is your normative view on protest? It seems to me that you say protest is in itself always justified. I mean, what do you see? I mean, I would say, okay, democracy should sort of allow, through the party system, through elections, through referenda, to include protest. That is that. I see where you come from, but I would like you to specify this a bit more. Thanks.
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A
Thank you. Abby, you had a question?
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E
Hi, I'm Abby Heller. I'm a Master's student in the European Institute here at lse. I was just wondering if you could comment on how you picked your cases, other than ones from Western Europe and ones from Central and Eastern Europe. Could you comment a little bit more on that and how representative they are of other countries.
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F
Please, From the European Institute. I liked about your case study of Iceland that you actually showed that protest often is not bad for the government. It strengthens its hand, if it's good in building it, so to speak, into the negotiations with. With international donors. So in contrast to the earlier vote, I don't think. I think there was a bit more to it. What you said about protest or contention and what it does, it's not only a problem for government, it can strengthen their hands. But so I wonder whether how generally you think that is the case. That wasn't quite in your framework. When can contention be made a lever for the government getting more out of crisis management than it otherwise would?
- [53:27]
A
Thank you. If you want to respond to these.
- [53:29]
C
Three, first, these are very good questions. I mean, the easiest one is yours. How did I choose my cases? I chose the worst cases. I chose the countries most heavily hit by the crisis because I thought their protest would be most important. But this, as I said, is an exploratory analysis. I would like to do it systematically for all the countries, but this is a big effort and I need money to do this. I asked for money to do this. Now your questions are more difficult to say. From the point of view of the European Central bank or the imf, Latvia is a positive case. I mean, it came out well out of the crisis. The program worked. If you are a Latvian public official and you got a 25% salary cut, you probably don't share this opinion. So, see, my normative point of view on protest is agnostic. I might not have been clear about this here. I'm a political scientist analyzing what is the interaction between political protest and electoral behavior. But I can of course understand that these people are highly dissatisfied and fed up. You said it yourself. I mean, the government didn't do its job and the people wanted to sanction the government. So they just protested against this government. And indeed they did away with this government, but they threw the rascals out. But the new government could not do in economic terms, it could not do very much about these 25% salary cuts. And from the point of view of democratic legitimacy, this is a problem. I mean, you know the piece, but for the others I cite the piece. The argument comes from Fried Schaap Fried Schaap makes a distinction between input legitimacy and output legitimacy. Output legitimacy is if the country is better like output legitimacy. If the country grows, unemployment goes down, budgetary deficits go down. Now in terms of Latvia is a special case, but take the Greeks. In terms of output legitimacy, the situation is catastrophic. The country gets ever deeper into difficulties. Then there is input legitimacy. Input legitimacy is that you have a say in what happens in your country. And in order to have a say you need to have a choice. That is, if you vote for one option, then you get one policy, and if you vote for another option, then you get another policy. But if whatever you vote for, you get the same policy. There is no input legitimacy. That's Fritz Sharp's argument. And if there is neither input, no output legitimacy, then there is no democratic legitimacy. And the risk is that people turn against democracy. And of course he has in mind, he doesn't say it explicitly, but I imagine as a German, it happened once before we had the Weimar Republic, which in deep economic crisis turned to an authoritarian solution. And I mean there are others in the choir of academics who are preoccupied, who paint this on the wall, this possibility. And if you look at Greece, it seems not so far fetched a scenario. And my second step implies the possibility of such a scenario. But I'm not. I mean, it was said this afternoon several times. We cannot predict as social scientists, and we should not do it, but there are social scientists who are preoccupied. And that's what I want to say. I don't think protest, as you suggested in the second point, protest in itself is always justified. But I have some empathy for those who protest under the conditions which I described. Now you asked me to think more systematically about the possibility that protest can have a positive effect for the government in its negotiations with other stakeholders. And I think it's a very good suggestion. But I cannot offhand specify the conditions under which this might happen. But as a Swiss, I can give you the example of the Swiss.
- [59:06]
B
Where.
- [59:06]
C
Referendums are very important. And traditionally in Switzerland, the government has used the threat of a referendum in international negotiations, arguing that it has strengthened its position in international negotiations, arguing that if it doesn't obtain concessions, it cannot sell the treaty to the people who compulsorily has to vote on the treaty. So the government in international negotiations has used the tool of the referendum as a tool in negotiations. And I mean that might as more and more countries have direct democratic instruments, especially in some central and eastern Europe, that might be used in the same way in the Hungarian case, The opposition has used the referendum as an instrument. So the opposition has launched a series of referendums in order to sabotage. To paralyze the sitting government and. And in order to bring it down. That's not such a pleasant use of the referendum. But that's an alternative way to use referendum too.
- [60:37]
A
Thank you. We have time for another round of questions. In the green, please.
- [60:49]
B
I'm Clement Pallier, I'm a master of Public affairs student. If I understand. Well, you explained that in Eastern Europe you can't predict the post crisis election result from the pre crisis election result. So with like some question, but like going further, what does it imply? Are we witnessing a political regime change or just some perturbed. So do you see that and. Yeah. How do you see that?
- [61:21]
C
I didn't understand the question.
- [61:23]
B
Oh, sorry. So you said that in the regression analysis in Eastern Europe you can't predict the post.
- [61:30]
C
Yes.
- [61:31]
B
Post crisis election result from the pre crisis.
- [61:34]
C
Yes.
- [61:35]
B
And do you interpret that as a perturbation or the sign of something fundamentally change? Is this noise?
- [61:44]
C
Okay.
- [61:45]
A
Okay. And if just your neighbor next to you and if everyone could please introduce themselves before asking a question. Thank you.
- [61:54]
G
I'm Remy Smida from the same program. Mpa. I just had a question about why didn't you include friends into your aggression? Maybe is it an outlier in the fact that they protest too much?
- [62:14]
A
Why he didn't include France in his regression? Was that your question?
- [62:17]
G
Because I saw in your presentation that you didn't include France in your first regression, as I saw. So I just want.
- [62:25]
C
Okay, say something about France and there's.
- [62:28]
A
A question there in the middle.
- [62:35]
H
Yeah.
- [62:35]
I
I'm Slade Mindenhall, I'm a master's student. Comparative politics. You mentioned briefly in passing the comparative significance of, you know, economic growth versus unemployment in Eastern versus Western Europe. Could you discuss briefly, because I know it's a. It can be a rather broad topic. To what extent that is a real, maybe structural difference that arises from those economies or to what extent it's politicized? And because I know that economic indicators and measurements can be sometimes, you know, emphasized sometimes in contrast to their actual economic meaning.
- [63:16]
A
There's a question here at the front.
- [63:20]
H
Toby Chambers, We Care Foundation. I find the Iceland case particularly fascinating because. Because they've done totally different policies and changed the dynamics. I would like to suggest that social media in particular is being used, particularly in Iceland, to galvanize support and to get the populace on side, whereas social media in other countries is actually being used as a dynamic to continually oppose the austere.
- [63:55]
A
And there's a final question there at the back.
- [64:02]
J
Hello, good afternoon. My name is Hugo, Hugo Dermas. I'm a Spanish member of the 15M movement in London Occupy. I would like to ask you what do you think that is the situation in Spain thinking that in 2008 the two mainstream parties have the 85% of the votes. 2012, in the next election they had 75%. And now the most recent surveys they're giving more or less a figure of 60, 65%. So it's a line that is going down. And if you can do in your further analysis, for example, to put a sequence of the Mediterranean countries, you are doing the division between western countries and central Eastern European, where for example Greece, Portugal, Italy and Spain, they're having similarities that can show, for example, that you are talking about Greece. Possibility to go in a collapse of the system. Why not? We can think that this can happen as well. For example, in Spain, even in the situation in the 80s and 90s in Latin America, where a lot of government move completely from the system, from accept that IMF or central banks were saying to move against capitalism or against neoliberalism, like for example Venezuela, Ecuador or Bolivia or in a more soft position, Argentina. Brazil. Argentina is in a very hard position as well. So why not in Europe? We can start to see that happening in Latin America like a contagious against the neoliberal neoliberal measures from the IMF and Indus RePEX. Thank you.
- [65:42]
A
Thank you very much. I'll give you a chance to answer these questions now.
- [65:46]
C
Again, very good questions which I cannot all answer. I can answer the first question, the regression results. Why is it impossible to predict post crisis election results on the basis of pre crisis election results in Central and Eastern Europe? I actually gave the reason already. It's a non institutionalized party system in Western Europe you have parties which have been around for a while and you have parties which are rooted in the social structure. For example, you have Christian Democratic parties which are rooted in the Catholic population of these countries. Or you have social democratic parties which are rooted in the labor class, the working class and which are connected to unions. You don't have something like this in Central and Eastern Europe. The party systems are new and the parties are reshuffling and reconfigurating all the time. For example, if you take Bulgaria, for example, suddenly you have the former king coming to Bulgaria and he creates his own party and his party wins the elections. And in the next elections people have realized that this is an Incompetent figurehead. So they throw him out and his party disappears. And the next party comes Djeb, which makes 40% out of nothing. But that means also that the politicians, they change parties and labels ad libitum from one election to the other. They regroup and they reshuffle. And that I meant by non institutionalized party system, France. I wrote this paper before the elections of France and then I suddenly thought, oh, maybe France is changing something. And the figures I showed you are without France. But when you introduce France, nothing changes. So I was very happy that France didn't change anything because Sarkozy was quite heavily sanctioned. So he's another case of an incumbent who was sanctioned heavily by the crisis. By the way, why, may I ask you, why was Angela Merkel not sanctioned? I mean, she had the bad luck to be up for re election in 2009 when the depth of the crisis was deepest in Germany and there was -5, -5 GDP growth. So in the dead valley of the crisis, she gets reelected. I mean, the Social Democrats were heavily punished, but not Angela Merkel. Do you have an explanation for this?
- [68:52]
A
Who is the opposition? I mean, it was a grand coalition.
- [68:55]
C
Yeah, it was a grand coalition.
- [68:56]
A
You had to go with one or the other, the Social Democrat. You knew that one or the other would have to go into government again. Yes, that's my hypothesis.
- [69:03]
C
Probably seen as a foreign crisis and was scolded on the bankers. But she's the party of the right. I mean, she's the party of the bankers. No, They did. I mean they did have a banking crisis. They had to save all these landespanken the West LB and one of. What was its name. But several of these regional banks were in deep, deep trouble and had to the tune of several billions, had to be safe. No, Germany was. I mean now everybody says Germany's doing fine and is export champion of the world. But at the time they had minus 5% GDP growth and Angela Merkel is re elected. I mean, no other option. And they sanctioned the SPD and they went in part to smaller parties. The Spanish, I come to the Spanish. I don't know by heart. But it was less serious. Yes.
- [70:58]
A
So now it's your turn to answer the questions. We answered yours.
- [71:01]
C
Okay, Spain, I think you point to something very interesting which is in line with what I have said. You said in 2008 the two big parties got 85%. 2012 they got 75. I mean they were both sanctioned to a certain extent, but not too much. I mean Spain, contrary to the Central And Eastern European countries has succeeded in institutionalizing a very strong two party system to some minors. Now you are saying now they are down to 66%. So you are actually pointing to what I was suggesting. In the second step, if the voter thinks the main parties, the main opposition parties, is just the same as the governing, the incumbent and cannot do anything or will not do because of its sense of responsibility, will not do anything else than the incumbents, then voters turn to, I would say, populist alternatives in Spain, regional parties very heavily. They will turn. Maybe there is none in Spain so far. Populist, right. What do you think? I can tell you about Italy? I mean, in Italy there is now an electoral campaign and it's highly complex, the lineup of the parties. But the left looks as if it is going to win the elections. So in Italy the voters are turning to the mainstream opposition. And this would be contrary to what I have suggested, but in Italy this is now actually the first election after the crisis. The last election was in spring 2008 and was not yet affected by the crisis. And I think what you will see in Italy is that the incumbent, which is the pdl, Berlusconi, he will be punished heavily. What Berlusconi tries to do, he tries to shift the blame to Europe and to the north of Europe. So he tries to shift the blame to Merkel and to the European Union. And in fact, what you see happening is a fragmentation of the right along the lines you suggest for Spain and the rise of an anti party, which is this movement of Beppe Gallo. I don't think the southern European systems other than Greece will collapse as you suggest it happened in Latin America. I think these party systems are too strong and too institutionalized. And the pressure on these parties to act responsibly, which comes from Europe and from the context of being a member of the Eurozone, is so strong that this collapse, I can see it, but I mean, it's speculative. Iceland social media the social media were also important in Portugal for the mobilization of very big demonstrations, surprisingly for Portuguese standards, surprisingly big demonstrations mobilized by social media. But I have not yet seen studies which show really how the effect of the social media has been Arab Spring people say it's all social media, but I haven't seen studies showing that it is in fact social media. I think they might be overrated.
- [75:25]
A
Okay, is there any one final question that anyone would like to ask? Okay, well, then I think we should thank the speaker and we should thank all of you for asking and answering excellent questions. Before we give a hand to Professor Chrissy, I just want to announce that the next lecture in this series on the euro crisis on 6 February, so next week by Professor Neil Walker with the title A Law of Crisis or A Crisis of the EU Legal Order Under Stress. So I hope I'll see many of you back for that. And can you please join me in thanking Hans Peter Cr.