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Crisis and complementarities: a comparative political economy of economic policies after COVID-19

Hancké, Bob ORCID: 0000-0002-3334-231X, Van Overbeke, Toon ORCID: 0000-0002-0620-9943 and Voss, Dustin ORCID: 0000-0001-5329-2682 (2022) Crisis and complementarities: a comparative political economy of economic policies after COVID-19. Perspectives on Politics, 20 (2). 474 - 489. ISSN 1537-5927

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Identification Number: 10.1017/S1537592721001055

Abstract

We examine economic policy responses to the COVID-19 induced economic collapse in Germany (a coordinated market economy) and the UK (a liberal market economy). The two countries responded to the symmetric economic shock with very similar furlough and business credit schemes to stabilize the demand and supply sides of the economy. However, since these policies fed into very different political-economic structures in both countries, they produced very different results. We attribute this divergence to the effect of “institutional complementarities,” the notion in Varieties of Capitalism that different elements of a system are mutually articulated and, therefore, mutually reinforcing beyond their initial contribution, or vice versa. Our results serve as a cautionary tale to policymakers that introducing policy elements developed in other institutional contexts is complex and challenge us to consider systematically the way in which institutional frameworks actively shape policy outcomes.

Item Type: Article
Official URL: https://www.cambridge.org/core/journals/perspectiv...
Additional Information: © 2021 The Authors
Divisions: Government
European Institute
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HJ Public Finance
R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
H Social Sciences > HV Social pathology. Social and public welfare. Criminology
Date Deposited: 19 Jul 2021 13:48
Last Modified: 28 Feb 2024 19:15
URI: http://eprints.lse.ac.uk/id/eprint/111059

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