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When policy feedback fails: “collective cooling” in Detroit's municipal bankruptcy

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When policy feedback fails: “collective cooling” in Detroit's municipal bankruptcy

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Abstract and Figures

The received wisdom among welfare state scholars is that policy feedbacks render social insurance programs durable. Yet, in the case of Detroit’s municipal bankruptcy, a voting majority of retired city workers accepted a settlement that asked them to waive key legal protections, formally accept gutted medical benefits, trimmed pension benefits, and a new public-private pension financing mechanism. This article synthesizes interactionist theories of loss to introduce the concept of “collective cooling.” I argue that collective cooling helps to establish the limits of policy feedbacks by explaining how a group of retirees’ collective self-understandings were adjusted from that of contractual rights holders to charitable dependents. Key components of this process included: First, seeking to adjust understandings of how pensioners were perceived by powerful outsiders; And, second, seeking to adjust the loss from one that reflected poorly on pensioners to one that did not. Implications are discussed for how people accept unexpected economic losses, especially those imposed by a trusted institution such as an employer or government organization.
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When policy feedback fails: collective cooling
in Detroit's municipal bankruptcy
Mikell Hyman
1
#Springer Nature B.V. 2020
Abstract
The received wisdom among welfare state scholars is that policy feedbacks render social
insurance programs durable. Yet, in the case of Detroits municipal bankruptcy, a voting
majority of retired city workers accepted a settlement that asked them to waive key legal
protections, formally accept gutted medical benefits, trimmed pension benefits, and a new
public-private pension financing mechanism. This article synthesizes interactionist theo-
ries of loss to introduce the concept of collective cooling.I argue that collective cooling
helps to establish the limits of policy feedbacks by explaining how a group of retirees
collective self-understandings were adjusted from that of contractual rights holders to
charitable dependents. Key components of this process included: First, seeking to adjust
understandings of how pensioners were perceived by powerful outsiders; And, second,
seeking to adjust the loss from one that reflected poorly on pensioners to one that did not.
Implications are discussed for how people accept unexpected economic losses, especially
those imposed by a trusted institution such as an employer or government organization.
Keywords Collective cooling .Economic loss .Identity repair .Interactionism .Policy
feedbacks .Public employment pensions
How do people come to terms with unexpected economic loss, especially when
imposed by a trusted institution, such as the state or an employer? A key insight of
welfare state scholarship is that social insurance programs produce self-reinforcing
feedback effects (Campbell 2005;Pierson1993,1994; Soss 1999). According to this
theory, policies, such as Social Security, confer resources and social status onto
beneficiaries that foster resistance to subsequent policy revisions, making these insti-
tutions increasingly durable. This article undertakes an in-depth analysis of a policy
episode that challenges these theoretical expectations, and helps to specify the limits of
policy feedbacks. I argue that collective identity work may diminish resistance to
regressive reforms.
https://doi.org/10.1007/s11186-020-09387-0
*Mikell Hyman
hyman@mpifg.de
1
Max Planck Institute for the Study of Societies, Cologne, Germany
Published online: 1 April 2020
Theory and Society (2020) 49:633668
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
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Chapter
City governments in the United States are largely supported by taxes imposed upon their residents and business owners. After World War II, Detroit lost its economic base as factories, residents and trade moved from the city to the suburbs. The tax base disappeared. The recession that began in 2008 drove the city into bankruptcy. Fortunately, that process was concluded quickly. At present, major firms and prosperous individuals are investing great sums in erecting new and renovating old buildings. In downtown, Midtown and the east river front, there are numerous signs of economic growth and population increases. Will Detroit become a model for the revitalization of older cities that once relied upon manufacturing? Or will Detroit become a model of “disaster capitalism,” that is, a city with a prosperous core but with many neighborhoods populated by impoverished minority residents whose economic status falls further and further behind that of those who are now enjoying the revived areas of the city of Detroit?