Thomas Sattler

• Professor at University of Geneva

The European debt crisis has uncovered serious tension between democratic politics and market pressure in contemporary democracies. This tension arises when governments implement unpopular fiscal consolidation packages in order to raise their macroeconomic credibility among financial investors. Nonetheless, the dominant view in current research is...

Power transitions among major states have shaped the course of cooperation in the history of the international system. We study this relationship from a public opinion angle by examining the effect of a potential power transition on attitudes toward bilateral trade liberalization. Power transitions can spur political and economic conflict because t...

In recent decades, governments in many Western democracies have shown a remarkable consensus in pursuing fiscal austerity measures during periods of strained public finances. In this paper, we show that these decisions have consequences for political polarization. Our macro-level analysis of 166 elections since 1980 finds that austerity measures in...

Governments often pursue procyclical fiscal policies, even though they reduce voter welfare. Is this because voters actually prefer procyclical policies? The analysis in this paper exploits the first individual-level evidence from an original survey of 12,000 respondents in 8 countries across Latin America. Prior research links support for procycli...

Governments have repeatedly adjusted fiscal policy in recent decades. We examine the political effects of these adjustments in Europe since the 1990s using both district-level election outcomes and individual-level voting data. We expect austerity to increase populist votes, but only among economically vulnerable voters, who are hit the hardest by...

Power transitions among major states have shaped the course of cooperation in the history of the international system. We study this relationship from a public opinion angle by examining the effect of a potential power transition on attitudes toward bilateral trade liberalization. Power transitions can spur political and economic conflict because t...

Intense debate surrounds the effects of trade on voting, yet less attention has been paid to how fluctuations in the real exchange rate may influence elections. A moderately overvalued currency enhances consumers’ purchasing power, yet extreme overvaluation threatens exports and economic growth. We therefore expect exchange rates to have a conditio...

Examining the twenty years since China acceded to the World Trade Organization, this collection provides an original, systematic assessment of the opportunities and challenges that China has presented to the WTO. Offering in-depth analyses of the 'two-way' relationship between China and the WTO, the contributions explore a range of key issues from...

IMF interventions are often associated with rising political discontent in countries where the Fund intervenes. Studies examining this relationship, however, face the challenge of disentangling the impact of the IMF from the impact of the crisis that triggered the intervention. To address this challenge, we conduct survey experiments in Greece, Ire...

Why do individuals' preferences for redistribution often diverge widely from their material self-interest? Using an original online survey experiment spanning eight countries and 12,000 respondents across Latin America, one of the most unequal regions in the world, we find significant evidence for an under-explored explanation: misconceptions regar...

IMF interventions are often associated with rising political discontent in countries where the Fund intervenes. Studies examining this claim, however, face the challenge of disentangling the impact of the IMF from the impact of the crisis that triggered the intervention. To address this challenge, we conduct survey experiments in Greece, Ireland, P...

The economic imbalances that characterize the world economy have unequally distributed costs and benefits. That raises the question of how countries could run long-term external surpluses and deficits without significant opposition against the policies that generate them. We show that political discourse helps to secure public support for these pol...

Over fifty years ago Andrew Shonfeld wrote a book, Modern Capitalism, which initiated a new field of inquiry about ‘comparative capitalism.’ His focus was the politics of the mixed economy and its national variants. At the basis of that politics was not just a concern with ‘who gets what’ in a static sense, but also how the various hybrid forms of...

Fiscal policy is an integral part of a country's growth model. An export-led strategy requires a reduction of fiscal deficits in order to promote cost competitiveness, while a demand-led strategy requires fiscal flexibility to manage domestic demand. This chapter shows that governments in fact subordinate their fiscal policy to the macroeconomic re...

Political opposition to fiscal adjustments has varied significantly across countries. Our analysis links this variation to differences in the congruence of voter attitudes towards fiscal trade-offs across political blocs in different countries. These differen- ces in attitudes, in turn, coincide with the implications of the distinct macroeconomic g...

Governments have repeatedly adjusted fiscal policy in recent decades. We examine the political effects of these adjustments in Europe since the 1990s using both district-level election outcomes and individual-level voting data. We expect austerity to increase populist votes, but only among economically vulnerable voters, who are hit the hardest by...

Governments have great difficulties to design politically sustainable responses to rising public debt. These difficulties are grounded in a limited understanding of the popular constraints during times of fiscal pressure. For instance, an influential view claims that fiscal austerity does not entail significant political risk. But this research pot...

Central bankers are expected to communicate facts about the economy and shape individuals' expectations about the economic future. However, credibility in economic affairs is often male-coded, particularly around the anti-inflationary commitments that central banks often need to project. Does gender shape central bankers' effectiveness as communica...

In recent decades, governments in many Western democracies have shown a remarkable consensus in pursuing austerity during periods of strained public finances. In this paper, we show that these decisions have consequences for political polarization. Our macro-level analysis of 166 elections since 1980 finds that fiscal restraint increases both elect...

Political opposition to fiscal adjustments has varied significantly across countries. Our analysis links this variation to differences in the congruence of voter attitudes towards fiscal trade-offs across political blocs in different countries. These differences in attitudes, in turn, coincide with the implications of the distinct macroeconomic gro...

Why do some countries run persistent current account surpluses? Why do others run deficits, often over decades, leading to enduring global imbalances? Such persistent imbalances are the root cause of many financial crises and a major source of international economic conflict. We propose that differences in wage-bargaining institutions explain a lar...

The relationship between politics and financial markets is central for many, if not most, political economy arguments. The existing literature focuses on the effect of domestic and international political interests, institutions and policy decisions on returns and volatility in stock, bond and foreign exchange markets. This research bears implicati...

Why do some countries run persistent current account surpluses? Why do others run deficits, often over decades, leading to enduring global financial imbalances? Such persistent imbalances are the root cause of many financial crises and a major source of international economic conflict. We propose that differences in wage-bargaining institutions exp...

Conventional wisdom holds that the creation of international, court-like institutions helps countries to peacefully settle trade conflicts, thereby enhancing overall welfare. Many scholars and pundits have argued, however, that these institutions remain ultimately ineffective, because they merely reflect the distribution of power in the anarchic in...

Whereas some researchers emphasize how World Trade Organization (WTO) dispute settlement reduces complexity and clarifies legislation, others argue that dispute rulings promote co-operation by providing an enforcement mechanism. This article identifies empirical implications from these distinct arguments and tests them on WTO disputes from 1995 to...

The political economy literature finds that stock markets drop after left-wing and increase after right-wing electoral victories. This study shows that the size of this reaction strongly depends on the political constraints that the incoming government faces. When constraints are high, the discretion of governments to implement their preferred poli...

In democratic societies, international integration requires popular approval. What determines the level of public support for international integration? We argue that national economic performance and the stringency of the proposed integration treaty modify the effects of two individual characteristics on public support: knowledge about the treaty...

The strong presence of large countries in World Trade Organisation (WTO) dispute settlement and the absence of very poor ones have raised concerns that increasing legalisation in the global trading system has not diminished discrimination against less powerful countries as much as expected. This article examines dispute initiations in all WTO membe...

This paper analyzes how political institutions affect the execution of exchange-rate policy. By focusing on policy-makers' responses to the emergence of speculative pressure on their currencies, we argue that the effect of democratic institutions on exchange-rate stability is likely to be conditioned by the officially announced exchange-rate regime...

Despite strong pressures from international financial markets, political parties continue to propose policies that differ considerably. This article examines to what extent actual government policies have converged notwithstanding the distinct policies that parties embrace in their party manifestos, and whether potential policy convergence can be t...

We analyze democratic accountability in open economies based on different hypotheses about political evaluations and government responsiveness. Specifically, we assess whether citizens primarily rely on government policies or if they focus on economic outcomes resulting from these policies to evaluate governments. Our empirical analysis relies on B...

Many studies of the Room to Maneuver make no provision for popular evaluation of policy. They assert rather than demonstrate popular satisfaction with policy choices and macroeconomic outcomes. We present a framework that explicitly models channels for popular preferences to influence policies and outcomes. Our results for economic policymaking in...