Partisan Differences, Varieties of Capitalism and the International Financial Crisis: Political Determinants of the Fiscal Political Crisis Reaction of the OECD Member States

Although the OECD member states all had to face a similar challenge – though to a different degree - by the international financial and economic crisis, their reactions to the crisis varied a lot. Thus the research project focuses on the differences in the fiscal political reactions to the international financial and economic crisis. Although the governmental reactions to the crisis were not arrived at independently, because they were inter alia influenced by supranational organizations and the severity of the crisis, the focus of the research project will be on the variation in the fiscal political reactions of the different OECD member states. Many states passed large economic stimulus packages, while others relied on a restrictive fiscal policy even in times of economic crisis. Also with respect to the composition of the financial packages the OECD member states differed a lot: While some states boosted public expenditure, others focused on a conjuncture stimulus via tax reduction. The aim of the research project is to identify the driving political determinants behind the different fiscal policy reactions to the economic crisis by the OECD member states with regard to the size and composition of the fiscal packages. To answer the research question a two-tiered analytic process will be applied. In a first step, hypotheses derived out of established policy theories and the "Varieties of Capitalism"-Approach will be answered using cross-sectional comparison. The second step will apply methods of process-tracing and quantitative text analysis in line with comparative case studies to test to what degree national governments used the international financial and economic crisis as a "window of opportunity", to realize policy preferences which were on their agenda before the breakout of the crisis.