Comparative Economics of European Integration and The Political Economy of Populism

Мероприятие завершено

4 and 6 June 2018

Lecturer: Zoltán Ádám PhD, Assistant Professor, Corvinus University of Budapest

Topics of lectures:

Comparative Economics of European integration

and

The Political Economy of Populism

lecture start time - 18.10

lecture room – K9

26 Shabolovka Ulitsa, Moscow

Mini course at HSE Moscow

June 4-6, 2018

Lecturer: Zoltán Ádám PhD, Assistant Professor, Corvinus University of Budapest, Faculty of Economics, Department of Comparative and Institutional Economics. Office: Main Building, E 226. Email: zoltan.adam@uni-corvinus.hu.

Topic 1: Comparative Economics of European Integration

This course examines the process of economic integration in Europe during the post WWII period from a comparative economics angle. Emphasis is placed on trade integration, economic growth, scale effects, policy adjustments, institutional (re)arrangements and the ongoing financial and institutional crisis that originates in the 2008-09 global financial meltdown. The underlying ambition of the course is to provide an economically well-informed understanding of European integration since 1945. Concepts of micro and macroeconomics will be used with reference to the macroeconomics of open economics in a Krugmanian sense. The course uses the highly popular textbook ‘The Economics of European Integration by Richard Baldwin and Charles Wyplosz, and runs both at Corvinus University of Budapest (in English) and at ELTE University Budapest (in Hungarian).

Lecture 1: Why the EU? And why the euro?

· The political economy of the advanced phase of European integration and the Eurozone. A brief history of the EU and the Eurozone, the most important principles of operation, and the most important institutionalized agents of integration.

Lecture 2. The crisis of the Eurozone

· In the aftermath of the 2008-09 global financial crisis the Eurozone fell into a financial crisis that has turned into a near institutional deadlock. What happened to financial markets, sovereigns and Brussels-based institutions? How has the crisis tried and changed the existing framework of European integration and whether it leads to a more closely connected European political union.

Recommended readings

· Antonakakis, Nikolas – Badinger, Harald – Reuter, Wolf Heinrich (2016): “Efficiency, proportionality and member states’ power in the EU Council of Ministers”. In Harald Badinger – Volker Nitsch eds.: Routledge Handbook of the Economics of European Integration. Milton Park and New York: Routledge, pp. 435-448.

· Baldwin, Richard –Wyplosz, Charles: The Economics of European Integration, McGraw-Hill, 3^rd(2009), 4^th (2012), or 5^th (2015) edition.

· Calmfors, Lars (2016): “The roles of fiscal rules, fiscal councils and fiscal union in EU integration”. In Harald Badinger – Volker Nitsch eds.: Routledge Handbook of the Economics of European Integration. Milton Park and New York: Routledge, pp. 157-170.

· Craft, Nicholas (2016): “West European economic integration since 1950”. In Harald Badinger – Volker Nitsch eds.: Routledge Handbook of the Economics of European Integration. Milton Park and New York: Routledge, pp. 3-21.

· Dabrowski, Marek (2016): “The Future of the European Union: Towards a Functional Federalism”. Acta Oeconomica, Vol. 66 (2016), S1, pp. 21-48.

· De Grauwe, Paul (2016): “Design failures in the Euro Area: Can they be fixed?”. In Harald Badinger – Volker Nitsch eds.: Routledge Handbook of the Economics of European Integration. Milton Park and New York: Routledge, pp. 119-131.

· De Grauwe, Paul – Yi, Yuemei: “From panic-driven austerity to symmetric macroeconomic policies in the Eurozone”, Journal of Common Market Studies, Vol. 51 (2013), S1: 31–41. DOI: 10.1111/jcms.12042

· Feldstein, Martin (1997): “The Political Economy of the European Economic and Monetary Union: Political Sources of an Economic Liability”. NBER Working Paper No. 6150 (August 1997). Downloadable at nber.org/papers/w6150.

· Lane, Philip R (2012): “The European Sovereign Debt Crisis”. Journal of Economic Perspectives, 26(3), 49-67. http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.26.3.49

· Mody, Ashoka (2016): “Living (dangerously) without a fiscal union”. In Harald Badinger – Volker Nitsch eds.: Routledge Handbook of the Economics of European Integration. Milton Park and New York: Routledge, pp. 376-407.

· Varoufakis, Yanis – Holland, Stuart – Galbraith, James K. (2013): A modest proposal for resolving the Eurozone crisis, Version 4.0. Downloadable at https://varoufakis.files.wordpress.com/2013/07/a-modest-proposal-for-resolving-the-eurozone-crisis-version-4-0-final1.pdf

· Wyplosz, Charles (2016): “The common currency: More complicated than it seems”. In Harald Badinger – Volker Nitsch eds.: Routledge Handbook of the Economics of European Integration. Milton Park and New York: Routledge, pp. 103-118.

Topic 2: The Political Economy of Populism

I teach this topic as part of various courses (Political Economy of Transition in Central and Eastern Europe, Institutional Economics, Comparative Economics). My research conceptualizes populism in an institutional economics context. Based on the political science literature on populism, I consider its authoritarian version as a degraded form of democracy that holds elections in regular intervals as means of popular legitimation but undermines pluralism and constrains political choice. Based on the theory of transaction cost economics, I argue that authoritarian populists reduce political transaction costs through vertically organizing political exchange replacing horizontal exchange characteristic of liberal democracy. Electoral demand for such a shift rises at times of crises and a mismatch between formal and informal institutions structuring political exchange. This is what happened in Hungary towards the end of the 2000s, in a period of socially costly fiscal stabilization and the troubles of the global financial crisis. Correspondingly, voters have given Prime Minister Orbán strong mandates to govern at three consecutive elections since 2010, and he transformed Hungary into a textbook case of authoritarian populism. Similar institutionalized shifts towards authoritarian governance has been taking place in a number of countries across Europe, Asia and in some sense the United States.

Lecture 1: Political institution building by populists; populists in power

What is populism, and who are populists? How do they transform liberal democracy? Can populism be democratic? What makes populism politically viable and who votes for populist candidates? How can the theory of transaction cost economics be employed to interpret populism?

Lecture 2: Authoritarian populism in action: The example of Hungary

Hungary had been dominated by democratic populism in the 2000s. In 2010, however, democratic populism was replaced by authoritarian populism as a dominant political orientation. This seminar looks into the constitutive elements and the respective political and economic dynamics of this shift in a political economy context: Why has electoral demand surged for autocracy? Why and how the ruling political elite has shifted loyalties and international affiliations from western towards eastern countries? Why has authoritarian populism proved to be sustainable both politically and economically?