The costs of responsibility for the political establishment of the Eurozone (1999–2015)

Abstract

The objective of this article is to analyse the costs of responsible governance on the national political establishment of the Eurozone in the aftermath of the 2008 global financial crisis. Our analysis tests two main hypotheses. First, we argue that financial crises like the one unleashed by the global financial meltdown of 2008 have an asymmetric impact on the electoral records of establishment parties depending on whether the countries affected by the financial crisis were financially intervened in or not. Our second hypothesis states that externally imposed austerity affects Left and Right national establishment parties differently. By choosing to act responsibly, that is, assuming the conditions of the intervention, the establishment Left pays a much larger electoral price than the one paid by the establishment Right under the same circumstances. To test our argument, we use a panel data set of 12 countries from the Eurozone in the period between 1999 (stage III of the monetary union) and 2015 that contains 54 country-election-year observations. Our findings show strong support for our two hypotheses.