Table of Contents

Economic Crises and Policy Regimes

Economic Crises and Policy Regimes

The Dynamics of Policy Innovation and Paradigmatic Change

Edited by Hideko Magara

In this innovative book, Hideko Magara brings together an expert team to explore both the possibilities and difficulties of transitioning from a neoliberal policy regime to an alternative regime through drastic policy innovations. The authors argue that, for more than two decades, citizens in developed countries have witnessed massive job losses, lowered wages, slow economic growth and widening inequality under a neoliberal policy regime that has placed heavy constraints on policy choices.

Chapter 3: The hegemony constraints in the neoliberal years of capitalism

Luiz Carlos Bresser-Pereira

Subjects: economics and finance, political economy, welfare economics, politics and public policy, political economy, public policy, social policy and sociology, economics of social policy

Extract

When we use the historical method to understand a given society we combine economic and political elements to define historical phases, which share common features and usually end in a major crisis. Policy regimes - a concept that was defined by Adam Przeworski - are moments within a given historical phase in which the state and the respective political parties have similar policies independent of the ideological leanings of the political party in office. They are moments when a given class coalition exercises a full ideological hegemony, when a set of common understandings, assessments of reality, narratives, theories and policies become dominant during a certain period of time. Thus, policy regimes correspond to historical forms of state, in so far as the state is the sovereign political institution defining the political regime in each country or nation state, but they require a level of ideological hegemony of the dominant groups, which is not always present in periods that we define as historical phases. The last policy regime corresponded to 30 Neoliberal Years of Capitalism - the period that began around 1980 and came to a close with the 2008 global financial crisis. It was a time in which technical progress was strong, but economic growth lost momentum, financial instability soared, individual freedom suffered major setbacks and inequality increased everywhere; within this period, the neoliberal policy regime was strongly present in the 1990s.

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