The Intergovernmental Politics of Austerity in Comparative Perspective

This paper addresses (1) the impact of financial austerity on the structures of intergovernmental relations (IGR) and (2) how the existing IGR institutional machinery shapes the ways in which austerity policies are formulated... [ view full abstract ]

This paper addresses (1) the impact of financial austerity on the structures of intergovernmental relations (IGR) and (2) how the existing IGR institutional machinery shapes the ways in which austerity policies are formulated and how that machinery promotes or slows the implementation of cutbacks to local governments. These questions are explored in a comparative research context which investigates local financial stress in the intergovernmental systems of England, Germany and the Netherlands.

The paper seeks to make a key contribution to our understanding of the contemporary politics and policy of austerity management. It questions many of the assumptions made about IGR financial relations and particularly that austerity leads to transformative change in terms of the structures of IGR and the ways in which central government actors manage devolved authorities. Different patterns of change are identified in the three countries. The existing institutional arrangements are identified as crucial in how austerity measures are both formulated and implemented. Austerity has intensified the politics of IGR but has not led to major institutional change and further entrenched, rather than weakened, the role of existing, strong institutional interests. In England, the political party is shown to be the key organisational actor despite much of the UK literature representing the financial relationship as almost exclusively determined in a professional-bureaucratic arena. Meanwhile in the Netherlands and Germany the party is much less significant than the representative mechanisms of territorial government which act as powerful mediating institutional mechanisms which have significantly shaped the formulation and implementation of austerity policies.

The paper draws on elite interviews and documentary analysis in the three countries at local and central government levels, and is supported by a statistical analysis of the public expenditure cutbacks in the three countries.