SASE 2020 Award Winners

The committee writes: Thoroughly researched and documented (with over 60 pages of endnotes), and written in an illuminating and engaging prose, this book examines the evolution of securitization and federal credit programs over the period of almost 200 years of American history, from the early post-Revolutionary years to the 1960s. The federal government relied on securitization and credit as tools of domestic statecraft in order to provide widespread economic opportunities but to avoid overt market intervention or redistribution of wealth. Under Sarah Quinn’s magnifying glass, the highly technical world of finance is seen as a complex social, political and moral landscape. In the end, the book arrives at a surprising conclusion that the US after all has an underappreciated developmental state, where government officials creatively turn to financial markets to manage America’s complex fractured political divides, and to determine what Americans owe one another. The book’s interdisciplinary engagement -- it draws on insights from economic sociology, political science, history, and economics -- would be of great interest to a broad spectrum of SASE scholars, and its focus on the developmental state is a wonderful tribute to Alice Amsden’s own work on state-led economic development of Asian economies.

The committee writes: The book asks a timely and relevant question: why do some countries accumulate so much debt in times of peace and prosperity that they expose themselves to the risk of default, while others manage to keep their debt under control? Drawing on data on five countries (Italy, Belgium, Ireland, Greece, and Japan) and examining debt accumulation and fiscal adjustment policies over a period of forty years (from the 1970s to the early 2000s), this ambitious book presents a concise and convincing answer: Persistent borrowing is not a result of recklessness on the part of political elites who want to myopically trade cash flow for short-term goals. In fact, policymakers everywhere try to initiate measures to reduce public debt, but the success of fiscal adjustments depends on state-society relations and the presence of social support for spending cuts and tax increases. Barta explains that gaining this support is extremely difficult in countries where the expected burden of fiscal adjustment will disproportionately affect some particular groups (she calls this criterion fiscal polarization), and where large parts of society are insulated from the negative economic effects of fiscal imbalance (a result of how open the country is to international markets). An erudite and highly readable account, this book offers broad theoretical contributions to comparative political economy, public finance, institutional change, state-society relations and fiscal policy, and it will greatly resonate with many scholars in the SASE community.

On “Spatial Mismatch and Youth Unemployment in US Cities: Public Transportation as a Labor Market Institution,” the committee chair writes: Brandtner, Lunn, and Young’s paper examines the spatial mismatch theory (referring to geographical distance between home and job opportunities that could generate unemployment) by testing whether public transit systems can reduce urban youth unemployment with a longitudinal dataset of 96 US cities over a 10-year period. Departing from the existing research of the special mismatch thesis that is based on few cases, the paper pushes the debate forward with a large-scale longitudinal study. The hypotheses are carefully tested. The findings are insightful; not only does the paper show that public transit can help to reduce urban youth unemployment, but it further specifies the condition of the effectiveness of the public transit, which depends on the existing levels of car dependence. This means that improvement in public transit accessibility will have a strong influence on reducing the youth unemployment rate in car independent cities, whereas in car-dependent cities, there are few benefits from investment in public transit to reduce youth unemployment without changing other aspects of the urban design. The argument of the role of public transit as a labor market institution bears important policy implications and can certainly be extended and examined in other countries. The committee members believe this is surely going to become a classic when discussing the spatial mismatch question.

On “Permanent Budget Surpluses as a Fiscal Regime,” the committee chair writes: The puzzle in Haffert’s paper is brilliantly set up and motivated by the “negative cases” that the author terms the “fiscal surpluses regime.” Conventionally, public choice tradition anticipates a deficit bias of democracy due to the short-term incentives of politicians to use deficit spending to increase the probability of re-election. Yet, some countries are characterized by “surplus regimes” that passed through not merely a few years of budget surpluses but prolonged periods of fiscal surpluses. How is this phenomenon to be explained?  By taking the most dissimilar case comparison design and showing the similar long-term fiscal consolidation in Canada and Sweden (institutionally heterogeneous cases of surplus regimes) and contrasting them with other OECD countries that only managed to maintain fiscal surpluses for two or three years in a row, Haffert argues that a path-dependent shift in the balance of power among the competing fiscal policy coalitions can explain the variation. The fiscal policy is shaped by opposing fiscal coalitions, with an expenditure coalition that benefits from public expenditures and a tax-cut coalition that benefits from tax cuts. A fiscal crisis provides opportunities for reshuffling the coalitions. If the crisis is sufficiently deep, public sector cuts shift a portion of the middle-class to the side of the tax-cut coalition, because the middle-class gets used to the idea that services (e.g. pensions) need to be purchased, and that over time it will become a net beneficiary of tax cuts. In turn, the crisis-induced expenditure cut consolidation strengthens the tax-cut coalitions and legitimizes continuing lower spending in exchange for future returns in the form of lower taxes, thus explaining the persisting surpluses regimes. The findings suggest that the crisis responses and the resulting reconfiguration of coalitions have long-term consequences for policy choices. 

This paper is strong in setting up a novel object of study by moving the terms of the debate from how to balance the budget (a question of policy change) to how to address the question of policy continuity. Through an articulated analytical frame with a small N approach, the author makes some insightful observations and arguments.