Given the severity and scope of the global financial crisis, many observers expected significant changes in policies, ideas, and power relations to follow from it. Yet the amount of change that actually occurred, Wyn Grant and Graham K. Wilson argue, has been rather limited. The editors take this intriguing puzzle as the starting point of their volume and ask: Why is that? And more specifically, where have we seen change, where not, and why?
The contributors to this volume approach these questions from a variety of angles and for a diverse set of issues. Two chapters focus on the consequences of the crisis on the international system (chapters by Richard Higgott and William W. Grimes), six focus on the experiences of specific countries (chapters by Andrew Gamble, Wilson, Vivien A. Schmidt, Cathie Jo Martin, Ben Clift, and Shaun Breslin), and three focus on specific policy issues regarding financial regulation (chapters by Glenn Morgan, Kevin Gallagher, and Timothy J. Sinclair). The chapters also vary in their regional focus, with three mainly focused on the United States (Wilson, Morgan, and Sinclair), four on Europe (Gamble, Schmidt, Martin, and Clift), two on Asia (Grimes and Breslin), and two on global issues (Higgott and Gallagher). And the chapters vary in the answers they give to the main question of the volume, the extent to which the global financial crisis has brought substantial change in institutions, policies, and ideas, and the extent to which it has not.
The volume provides an interesting read on a variety of aspects related to the global financial crisis, and the reader learns a lot about specific crisis trajectories in different countries, issue areas, and the international system. Some of the contributions are presented as essays on broader topics; others provide more systematic and insightful analyses of specific aspects of the crisis. For example, Morgan’s analysis of structural features of the over-the-counter (OTC) derivatives market shows that despite the fact that the specific structure of this market contributed greatly to the emergence of the global financial crisis, surprisingly little has changed in its aftermath. Morgan shows how certain features of OTC products and markets give more power to some actors than others, and he argues that in the political struggles, both among private actors and between private actors and regulators after the crisis, the actors that had been powerful before the crisis prevailed, explaining the lack of change. Grimes examines the effects of the global financial crisis on Asian countries’ willingness and ability to engage in regional and/or global financial regulation across a number of issue areas. He argues that a lack of change toward more cooperation was due not to the inability of states to cooperate but to an unwillingness to cooperate. In contrast, when states saw it in their national interest that something should happen, change did occur.
Gallagher’s study on the history of capital controls shows that the predominant views toward, and use of, capital controls have varied considerably over time. The author shows that this is a field where substantial change has in fact occurred, as capital controls have become widely used and accepted during the crisis. Gallagher attributes this to a mix of changing ideas about government and the usefulness of controls and a changed geopolitical environment.
Martin’s case study of the ways in which Scandinavian countries (especially Sweden and Denmark) coped with the crisis argues and shows that the distinct institutional structure of coordinated capitalism allowed these countries to implement a flexible and effective response to the crisis. There was no change in the institutional structure and the social-democratic model, as one might have expected. Instead, policymakers exploited the room to maneuver within these structures to design creative anticrisis responses, which departed from previous policies (change) but fit into the broader variety of capitalism pursued by these countries (continuity).
Breslin’s chapter offers a fascinating glimpse into the Chinese case and examines how the crisis has changed China’s economic policy and global power position. It shows that although the crisis led to a significant change in economic policies, this was in fact a reversal to the traditional development model focused on growth, which policymakers had tried to move away from in the years before the crisis by implementing more sustainable policies. The chapter also argues, in a nuanced manner, that China’s power has been rising, but on a lesser scale than sometimes appears from the outside.
Overall, then, the volume offers the reader a broad scope of insights into the political and policy consequences of the global financial crisis. At the same time, it does not live up to its potential. First, the guiding question of change versus continuity is an important and intriguing one, and the contributions show that consequences of the global financial crisis have varied considerably on this issue. Unfortunately, however, only a few chapters address this question directly, and most leave it to the reader to figure out how they speak to the issue of change. This would perhaps not be so much of a problem if the introductory and concluding chapters offered more guidance by tying the papers together more explicitly. But very little is offered in this regard. Even the order of the chapters does not follow any clearly identifiable structure that would have made it easier for the reader to place the individual chapters into the overarching theme of the volume.
A certain lack of coherence is also reflected, second, in the fact that the essays do not speak to one another. For example, France takes center stage in two chapters (Schmidt and Clift), and although Schmidt refers to Clift’s work (in fact the only cross-reference in all chapters but the introduction and conclusion), Clift never mentions Schmidt or how his analysis related to hers. Likewise, it would have been nice to hear how the chapters on regional economic cooperation in Asia and the chapter on China, or the chapter on OTC derivative markets and credit-rating agencies, relate to each other. This is a lost chance to capitalize on the opportunities that an edited volume, rather than a collection of independent journal articles, offers.
Finally, and related to the first two points, a more systematic approach or unified framework would have helped to draw the chapters together, as other recent edited volumes on the political economy of the global financial crisis have done (such as Miles Kahler and David A. Lake’s Politics in the New Hard Times: The Great Recession in Comparative Perspective [2013] or Nancy Bermeo and Jonas Pontusson’s Coping with Crisis: Government Reactions to the Great Recession [2012]). An advantage of The Consequences of the Global Financial Crisis is that it brings together a diverse set of approaches and issues, but it does not exploit this variety by tying the contributions together on one common denominator. This is possibly connected to one important aim of the project emphasized by the editors in the preface: the goal of cooperation between scholars from the University of Warwick in the UK and Boston University in the United States. The volume shows the breadth of expertise that can be gained by such a project, but also highlights the challenges associated with connecting such a diverse set of research traditions and fields.
