Sociology of Public Finances and Debt
The fiscal regimes of advanced Western democracies have become highly inert. Aging populations, rising health costs and other factors keep spending pressure high. At the same time, with little prospect of high economic growth and with entrenched opposition to higher taxes, states cannot significantly raise revenues. While debt financing partly offers a way out of these dilemmas, states usually face self- or market-imposed limits to indebtedness and deficit spending. The research group looks at how state actors deal with this inertia and associated dilemmas and seek new solutions in light of growing economic instabilities, inequalities, and transformational challenges, particularly those of climate change. Experiences from the past decade suggest that, when policy-makers opt for austerity, they encounter significant political resistance and fail to fix the underlying economic and fiscal malaise. What are the alternatives? Under which conditions can policy-makers render fiscal systems more economically, socially, and environmentally sustainable? Or when do they opt for evasive solutions, as indicated by the widespread adoption of central banks’ quantitative easing and the design of off-balance-sheet investments? The group investigates the structural and institutional conditions, as well as the meso-level processes, that determine fiscal problem-solving strategies at this critical juncture.
Current Research Projects