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Blessing or Curse? The Rise of Tourism-Led Growth in Europe's Southern Periphery

January 2023
JCMS Journal of Common Market Studies 61(1):236-258

DOI:10.1111/jcms.13368

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Authors:

Reto Bürgisser

University of Zurich

Donato Di Carlo

London School of Economics and Political Science

Despite being one of the world's major internationally traded services, tourism remains neglected within debates on European integration and growth models. We highlight the rise of tourism-led growth in Southern Europe. We argue that the process of European integration has been a double-edged sword, simultaneously incentivizing and forcing Southern European economies to reap their comparative advantage in tourism. While European integration has created the preconditions for the expansion of intra-European tourism, monetary integration pre-empts macroeconomic management. Since the Eurozone crisis, internal devaluation and fiscal austerity have suppressed the domestic growth drivers, inducing these governments towards an export-led growth strategy. We document the emergence of unprecedented tourism-related current account surpluses in Southern Europe, driven strongly by tourism imports from the EMU-core countries and the UK. Thus, while different types of export-led growth strategies now coexist in the EMU, Southern Europe's excessive reliance on international tourism for growth comes with severe pitfalls.

Average Yearly Contribution of Net Exports to the Change of GDP.

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Defining Moments of European Integration for the Expansion of the Tourism Industry

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Blessing or Curse? The Rise of Tourism-Led Growth in Europe’s

Southern Periphery

RETO BÜRGISSER

and DONATO DI CARLO

Department of Political Science, University of Zurich, Zurich, Switzerland

Max Planck Institute for the Study of Societies, Cologne,

Germany

Abstract

Despite being one of the world’s major internationally traded services, tourism remains neglected

within debates on European integration and growth models. We highlight the rise of tourism-led

growth in southern Europe and argue that the process of European integration has been a

double-edged sword, simultaneously incentivizing and forcing southern European economies to

reap their comparative advantage in tourism. While European integration has created the precon-

ditions for the expansion of intra-European tourism, monetary integration pre-empts macroeco-

nomic management. Since the eurozone crisis, internal devaluation and ﬁscal austerity have sup-

pressed the domestic growth drivers, inducing these governments towards an export-led growth

strategy. We document the emergence of unprecedented tourism-related current account surpluses

in southern Europe, driven strongly by tourism imports from the EMU core countries and the UK.

Thus, while different export-led growth strategies now coexist in the EMU, southern Europe’s ex-

cessive reliance on international tourism for growth comes with severe pitfalls.

Keywords: European integration; growth models; varieties of capitalism; tourism; southern Europe

Introduction

Over the last half-century, tourism has grown from an elite pastime into the world’s larg-

est service sector industry in international trade (Lew, 2011). Today, tourism is the

third-largest economic sector in Europe (European Parliament, 2015) and a signiﬁcant

contributor to economic growth and employment to many national and local economies

worldwide (Scott and Gössling, 2015). Within this macro trend, southern Europe accounts

for more than 20 per cent of the global tourism market (UNWTO, 2020). Yet, while there

is awareness of the importance of the tourism industry among economists and

policy-makers (Du et al., 2016), one can rarely ﬁnd any mention of tourism in the com-

parative political economy (CPE) and European integration literature. This is remarkable

considering Europe’s leading role in the sector and, most importantly, tourism’s potential

for socio-economic integration and political co-operation within Europe (Lijphart, 1963;

Russett, 1970).

While the varieties of capitalism (Hall and Soskice, 2001) and the growth models lit-

erature (Baccaro and Pontusson, 2016; Hassel and Palier, 2021) have identiﬁed different

models of capitalism, scholars of European integration continue to debate whether these

can co-exist within a hard-currency regime like the economic and monetary union

(EMU). The debate is polarized around two contrasting views. Some scholars argue that

countries’diversity may be beneﬁcial in a monetary union, enabling mutual insurance

mechanisms among its members (Schelkle, 2017). Others, instead, argue that the EMU

JCMS 2023 Volume 61. Number 1. pp. 236–258 DOI: 10.1111/jcms.13368

Ltd.

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destroys the governance capabilities (that is, exchange rate and countercyclical ﬁscal pol-

icies) on which the domestic demand-led countries of southern Europe have historically

relied. Thus, participation in the EMU rewards export-led growth strategies pursued by

the EMU core countries while it precludes domestic demand-led growth strategies

of the southern countries (Hall, 2014). This article contributes to the ongoing debate

(Johnston and Regan, 2016,2018) by highlighting the rise of tourism-led growth in south-

ern Europe since the eurozone crisis.

Despite its richness, this debate has overlooked the growing economic importance of

tourism in Europe. While EMU core countries have long relied on net exports from

manufacturing goods (for example, Germany) or high-end services (for example, the

Netherlands) as drivers of aggregate demand (Hassel and Palier, 2021), growth in south-

ern Europe was mainly consumption-led and fuelled by ﬁnancial integration and capital

ﬂows from EMU core countries (Fuller, 2018; Jones, 2016; Stockhammer, 2016). Once

capital dried up during the eurozone crisis, ﬁscal austerity plus internal devaluations

forced southern European countries into export-led growth (Afonso, 2019; Perez and

Matsaganis, 2019; Scharpf, 2016). While this is well known, we complement this argu-

ment by documenting the emergence of a third variant of export-led growth strategy in

the EMU based on internationally traded tourism services, which today account for a sub-

stantial and growing part of southern Europe’s exports. By tracing the evolution of current

account (CA) balances, we argue that, from 2010 onwards, CA surpluses from interna-

tional tourism have grown to unprecedented levels, highlighting the increasing reliance

of Southern Europe on tourism-related surpluses to export their way to growth within

the EMU.

Moreover, through the analysis of bilateral CA balances, we also show that northern

and southern Europe have become increasingly integrated through international tourism

transactions. Since the crisis, southern Europe has substantially expanded its tourism

CA surpluses vis-à-vis EMU core countries and the UK. Although we cannot provide

conclusive evidence, we hypothesize that this process has likely been driven by a combi-

nation of internal devaluation and governments’industrial policies aimed at upgrading,

diversifying, and promoting their domestic tourism industries in the ever-expanding inter-

national tourism markets. We posit that the Single European Aviation Market (SEAM)

and travel and visa liberalizations have created the preconditions for an unprecedented ex-

pansion of intra-European travel. At the same time, EU state-aid prohibitions and a hard

currency regime cum legal constraints on national budgets pre-empt southern European

countries’previous capacity to pursue growth strategies centred on expansionary ﬁscal

and wage policy-making as well as competitive devaluations. Thus, the process of Euro-

pean integration has created both incentives and constraints, forcing southern European

countries to capitalize on their comparative advantages in international tourism.

Tourism-led growth now provides these economies with an option for export-led growth

compatible with the requirements of the EMU’s hard currency regime and Europe’s reg-

ulatory state.

This article contributes to European political economy scholarship both theoretically

and empirically. First, we contribute to burgeoning debates on growth models by urging

attention to international tourism as a full-ﬂedged growth strategy. For peripheral econo-

mies with suitable pre-conditions (for example, warm climate, coastlines, cultural heri-

tage), tourism represents a developmental strategy worth studying alongside other growth

The Rise of Tourism-Led Growth in Europe’s Southern Periphery 237

Ltd.

strategies based on foreign direct investment (FDI) and tax dumping (Ban and

Adascalitei, 2020; Bohle and Regan, 2021). Second, we contribute to political economy

debates on European integration by highlighting the growing international interdepen-

dence of southern Europe’s tourism-led growth strategies with northern Europe’s strate-

gies of export-led growth and privatized Keynesianism in the UK.

The article proceeds as follows. We ﬁrst locate tourism within key debates on growth

models and European integration. Then, we introduce international tourism as an

export-led strategy and brieﬂy discuss how European integration contributed to its expan-

sion. After that, we trace the evolution of southern Europe’s growth models and demon-

strate the rise of tourism-led growth. We conclude by discussing the perils of an excessive

reliance on tourism and sketching a future research agenda on the comparative political

economy of tourism.

I. The Political Economy of European Economic and Monetary Integration

The process of European economic and monetary integration was premised on the idea

that free trade within a European single market would beneﬁt both producers and con-

sumers thanks to ﬁrms’economies of scale and countries’greater specialization based

on their respective comparative advantages (European Commission, 1985). A single cur-

rency was seen as complementary to enhance these gains from trade by reducing transac-

tion costs and guaranteeing macroeconomic stability (European Commission, 1990).

While the theory of optimal currency areas portrayed monetary integration as beneﬁcial

only for Member States with ﬂexible labour markets or synchronized business cycles,

in-

tegration proceeded under the assumption that greater competition and economic/ﬁnancial

integration would induce governments to generate the institutional and economic conver-

gence necessary for a common currency to work (Frankel and Rose, 1998).

Yet, three decades later, structural differences among European countries persist

(Höpner and Schäfer, 2012). Within the EMU, mounting economic divergence between

core countries and southern peripheral economies has instead ensued (Gambarotto and

Solari, 2015). Against this backdrop, scholars of the political economy of European inte-

gration debate whether European integration can successfully accommodate different va-

rieties of capitalism or growth models (Höpner and Schäfer, 2010; Johnston and

Regan, 2018; Scharpf, 1999; Stockhammer, 2016) without a political union capable of su-

pranational macroeconomic stabilization and social protection (McNamara et al., 2015;

Scharpf, 2014).

Some scholars argue that the diversity of European political economies within the

EMU allows for forms of monetary solidarity by providing diverse countries with mech-

anisms for mutual insurance for income and consumption smoothing (Schelkle, 2017).

Others oppose this view on three grounds: (1) the very crisis of the EMU was in the ﬁrst

place due to its members’incompatible growth models joined together within a system of

ﬁxed exchange rates which penalizes the previously soft-currency regimes of southern

Europe (Hancké, 2013; Höpner and Lutter, 2018; Johnston and Regan, 2016;

Scharpf, 2011); (2) the euro can now only be saved at the cost of suppressing democracy

As noted by some prominent US economists, these conditions were hardly achieved in Europe at the time (Feldstein, 1997).

For an extensive review on EMU and the theory of optimal currency areas, see Mongelli (2005).

Reto Bürgisser and Donato Di Carlo238

Ltd.

in southern Europe (Crum, 2013); (3) since the crisis, the EMU’s strengthened economic

governance imposes a process of ‘forced structural convergence’on southern economies

(Regan, 2017; Scharpf, 2016). Scholars have highlighted how northern European coun-

tries dispose of the institutional complementarities necessary for an export-led growth

strategy suitable for economic success within the EMU (Hall, 2014). On the contrary,

lacking these institutional prerequisites, southern Europe’s economies that have tradition-

ally relied on domestic demand-led growth strategies ﬁnd it hard to operate successfully

in the EMU without currency devaluations and tools for aggregate demand management

(Hassel, 2014; Iversen et al., 2016). Therefore, due to ﬁscal austerity, internal devalua-

tions and market-enhancing structural reforms, the EMU suppresses domestic growth

drivers and forces southern economies into export-led growth (Scharpf, 2016).

Despite their richness, current debates on the political economy of Europe have so far

overlooked the implications of European integration for the steep rise of the international

tourism industry and the consequences this development has had for the reconﬁguration

of southern Europe’s growth models within the EMU. We contribute to these debates

by highlighting how European integration has put in place the preconditions for

expanding the international tourism industry. We demonstrate that southern European

economies have increasingly exploited their comparative advantage in the tourism indus-

try vis-à-vis northern Europe’s countries to rekindle their export-led growth strategies

within Europe’s post-crisis constrained governance environment.

II. International Tourism as an Export-Led Growth Strategy

The classic varieties of capitalism literature had identiﬁed four different models of capi-

talism: coordinated market economies (CMEs), liberal market economies (LMEs), mixed

market economies (MMEs) (Hall and Soskice, 2001; Molina and Rhodes, 2006) and

economies dependent on FDI (Nölke and Vliegenthart, 2009). Instead, the current growth

models literature categorizes countries based on an economy’s main drivers of aggregate

demand formation (Baccaro and Pontusson, 2016). Northern Europe’s CMEs consist of

export-led growth models with subdued domestic demand and a specialization in

manufacturing goods’exports (Austria, Belgium, Germany) and ‘balanced growth

models’with extensive exports of ICT-based services and high domestic demand (Nordic

countries, the Netherlands). The United Kingdom is an LME that relies on

consumption-led growth underpinned by deregulated access to credit and vibrant housing

markets –also known as ‘privatized Keynesianism’(Crouch, 2009). Central and eastern

European economies and Ireland largely rely on lower labour costs and/or favourable tax

schemes and incentives to attract FDI by multinational corporations to generate growth

and jobs (Ban and Adascalitei, 2020; Bohle and Regan, 2021; Reurink and Garcia-

Bernardo, 2020). Lastly, before the eurozone crisis, the MMEs of southern Europe relied

on domestic private and public consumption underpinned by easy access to credit and/or

generous wage and ﬁscal policies (Hassel and Palier, 2021).

Along these ideal types identiﬁed by the literature, we conceptualize and add a hitherto

overlooked export-led growth strategy centred on exporting international tourism ser-

vices. According to standard classiﬁcations, tourism consists of ‘the activity of visitors

taking a trip to a main destination outside the usual environment, for less than a year,

for any main purpose, including business, leisure or other personal purposes, other than

The Rise of Tourism-Led Growth in Europe’s Southern Periphery 239

Ltd.

to be employed by a resident entity in the place visited’(Eurostat, 2014). Three types of

tourism activities can be distinguished. Domestic tourism consists of within-country tour-

ism by residents. Travels by incoming foreign tourists are considered as inbound tourism,

and vice versa outbound tourism. Even though domestic tourism is a hefty economic sec-

tor in many countries and constitutes an essential component of private consumption, to

study the importance of tourism as an export-led growth strategy, we will focus only on

international tourism, that is, inbound/outbound tourism.

Today, international tourism is one of the world’s major internationally traded services.

Its transactions are recorded in the ‘travel’and ‘passenger transport’items of the balance

of payment’s current account. To assess the economic contribution of tourism, we rely

mainly on data provided by the World Tourism Organization (UNWTO), which has de-

veloped a harmonized system of tourism satellite accounts together with the Organisation

for Economic Co-operation and Development (OECD) and Eurostat. Inbound tourism is

an export component (X) because foreign visitors travel to the country and acquire locally

produced tourism services spending their foreign currency earned in the country of resi-

dence. Vice versa, outbound tourism is an import component (M). Given the aggregate

demand (AD) equation, where:

AD ¼CþIþGþX–MðÞ;

international tourism’s net contribution to aggregate demand

is positive when receipts

from inbound tourism exceed those from outbound tourism, that is, when (X –M) >0.

In multiple ways, international tourism surpluses contribute to economic growth, em-

ployment, foreign exchange earnings and tax income (Clancy, 1999; UNCTAD, 1998).

Historically, tourism –in liaison with remittances –has played a vital role in fostering

the industrialization of those developing countries that lacked the domestic factors of pro-

duction (De Kadt, 1984). This is because importing capital goods or raw materials from

abroad implies deﬁcits in the current account, which must be ﬁnanced through exports.

Inbound tourism has an essential developmental function because it mitigates the balance

of payment constraints by bringing foreign exchange into the country. Foreign currency’s

availability, in turn, could be exploited to import the capital goods and raw materials

needed to kick-start industrialization (McKinnon, 1964). Furthermore, tourism can con-

tribute to development by stimulating governments’investment in physical infrastructures

and human capital, thereby increasing productivity and generating positive externalities

(Blake et al., 2006). It is also an important driver of employment creation, providing in-

come to households that underpins domestic consumption (Lee and Chang, 2008).

However, an excessive reliance on tourism-led growth comes with notable pitfalls.

First, critical scholars link tourism to dependency theory and denounce a new form of co-

lonialism whereby foreign multinationals invest in developing countries’touristic destina-

tions and deprive the local population of the proﬁts generated through the intensive

Focusing only on the current account likely underestimates the actual contribution of tourism to domestic growth because it

does not consider foreign tourists’consumption of goods and services other than travel and transport. Moreover, tourism

does not sell just one product and decomposing each industry into tourism- and non-tourism-related components is chal-

lenging. Some scholars recommend the analysis of backward and forward linkages to fully assess the economic impact

of tourism (Cai et al., 2006), which, however, goes beyond the scope of this article.

Reto Bürgisser and Donato Di Carlo240

Ltd.

exploitation of local natural resources.

Second, as a growth strategy dependent on foreign

tourists’inﬂows, an excessive reliance on tourism makes the country highly vulnerable to

exogenous shocks such as the recent outbreak of the Covid-19 pandemic (Financial

Times, 2021) or terrorism (Fauzel and Seetanah, 2021; Pizam and Smith, 2000). Third,

excessive reliance on tourism leads to a restructuring of the economy around low produc-

tivity, low value-added sectors, characterized by seasonal jobs and precarious employ-

ment (Eurofound, 2012). Fourth, tourism can have severe adverse effects on the environ-

ment and on socio-cultural spaces; not only due to the expansion of the airline industry

but also the erosion of public infrastructures due to extensive use by foreign tourists,

the commodiﬁcation and over-utilization of natural resources, vandalism and damage to

over-crowded cultural sites (Tisdell, 1987).

At any rate, for lack of better alternatives, international tourism can become a

full-ﬂedged strategy for governments to generate growth and employment, particularly

for less developed countries unable to compete with advanced economies in high-end

manufacturing or the knowledge economy. Yet, for such a growth strategy to be success-

ful, countries need a liberal travel visa regime to minimize transaction costs for foreign

tourists and a cheap and competitive passenger transportation system to facilitate travels.

By putting these conditions into place, European integration has been key to fostering the

rise of the European tourism industry.

III. How European Integration Has Underpinned the Expansion of Tourism

Tourism is not mentioned in the EU treaties until 1992 when the Maastricht Treaty intro-

duced the possibility for the EU to take ‘measures in the spheres of energy, civil protec-

tion, and tourism’. The European Commission has long aimed at expanding its competen-

cies in tourism policy, which it has used strategically to foster the completion of the EU

single market (Estol and Font, 2016). However, a full-ﬂedged EU tourism policy remains

limited due to the lack of direct competencies and unanimity requirements in the Euro-

pean Council (European Parliament, 2015). Member States have thus jealously protected

and advanced their national interests in tourism policy due to its strategic importance for

achieving balance of payment parity (Estol and Font, 2016, p. 231). With the Lisbon

Treaty, the EU eventually acquired competencies to encourage and promote

co-operation between Member States in tourism policy. However, EU competencies re-

main anchored to the principle of subsidiarity and the EU can only ‘support, coordinate

or supplement’(art. 6, TFEU) Member States’actions. Any harmonization of Member

States’laws and regulations related to tourism is explicitly excluded (art. 195, TFEU).

Yet, tourism has indirectly beneﬁted from the process of European integration in multiple

ways (see Table 1).

First, a liberal visa regime and the right to free movement have facilitated travels

within the EU. Thanks to the Schengen agreements (1985 and 1990), since the mid-

1990s, tourists have beneﬁted from a common visa policy for short stays and the gradual

removal of internal barriers, enabling persons to cross borders freely irrespective of their

nationality. Visa obligations considerably impact tourism since potential travellers may be

deterred from traveling if visa procedures are too costly or burdensome. While European

For a review of the dependency literature, see Bianchi (2018, pp. 90–91).

The Rise of Tourism-Led Growth in Europe’s Southern Periphery 241

Ltd.

residents travel freely across the EU, more than 70 per cent of the world’s population

needed a visa to travel to Europe in 2012, making it one of the most restrictive regions

regarding visa obligations for non-Europeans (Attström et al., 2013). The 1992 Maastricht

Treaty then introduced the concept of EU citizenship and institutionalized the individual

right for every EU citizen to move freely across the EU.

Second, tourism has beneﬁted enormously from the deregulation and liberalization of

the European air transport markets. The creation of the Single European Aviation Market

(SEAM), the poster child of negative integration in Europe, was pushed forward by the

strategic actions of the Commission in alignment with the Dutch and British governments

(Dobson, 2010). National air transport markets have been liberalized through three legis-

lative packages by the European Council, which were inspired by the requirements of

market competition enshrined in the Treaty of Rome (1957) (Button, 2001). Before the

1990s, Europe’s aviation market was regulated by bilateral agreements. Strict national

regulations regulated routes, fares and market access.

Table 1: Deﬁning Moments of European Integration for the Expansion of the Tourism Industry

Agreements and regulations Year Relevant institutional changes Effects on the tourism industry

Schengen Agreements 1985

1990

Common visa policy for short

stays and removal of internal

border controls

Persons’freedom to cross

internal borders without border

checks, irrespective of

nationality

legislative package on the

liberalization of air transport

markets (Council regulations,

directives & decisions)

1988 European Commission enabled

to apply antitrust regulation to

airlines; airlines granted greater

pricing freedom; partial

liberalization of market access

by airlines

First step in the creation of the

SEAM

legislative package on the

liberalization of air transport

markets (Council regulations)

1990 Deregulation of air trafﬁc

limitations; elimination of

governments’discrimination

against airlines not

substantially owned by a

European state

Second step in the creation of

the SEAM

Maastricht Treaty 1992 Introduction of EU citizenship Institutionalization of

individual right for every EU

citizen to move and reside in

EU Member States

legislative package on the

liberalization of air transport

markets (Council regulations)

1993 Removal of all signiﬁcant

barriers to market entry;

regulation of common safety

rules and ﬁnancial

requirements; removal of

national restrictions on ticket

prices; removal of restrictions

on routes; deregulation of fares;

permitted foreign ownership of

airlines

Third and ﬁnal step in the

gradual establishment of the

SEAM, leading to greater

competition in air transport

markets, lower ticket fares,

increased frequency of ﬂights,

larger number of routes,

emergence of the low-cost

airlines

Reto Bürgisser and Donato Di Carlo

242

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Moreover, the market was monopolized by state-owned ﬂag carriers, vigorously

protected by state aid (Button and Swann, 1988). This regime was misaligned with EU

principles of open markets and free competition. During the late 1980s and early

1990s, the European Council proceeded to deregulate and liberalize the European air mar-

kets, introducing the freedom for an EU carrier to operate any route within the EU, re-

moving restrictions on their capacity and operations and empowering airlines to set prices

by market principles rather than being dictated by government. The liberalization has led

to an enormous expansion of the European aviation industry to the beneﬁt of European

travellers who have enjoyed more ﬂights, lower fares, a greater number of routes and des-

tinations, not least thanks to the mushrooming of low-cost airlines across Europe

(Burghouwt et al., 2015). Thus, by the 2000s, the preconditions had been put in place,

which would subsequently pave the way for southern European countries’growing reli-

ance on international tourism for growth.

IV. The Rise of Tourism-Led Growth in Southern Europe after the Crisis

Southern Europe’s Growing Peripheralization

Despite their national differences, Greece, Italy, Portugal and Spain share some key fea-

tures that have induced scholars to speak of a distinct model of southern European capi-

talism. These countries had large agricultural sectors and developed into industrialized

economies with a substantial lag. Late and disorganized industrialization led to idiosyn-

cratic models of capitalism characterized by inconsistencies between the productive sys-

tem and the institutional and regulatory setting (Fuà, 1980). These structural weaknesses

pushed the state into adopting a direct role in the economic governance of markets to

compensate for market failures, promote coordination among market actors and give co-

herence to the system of capitalist accumulation (Molina and Rhodes, 2006;

Schmidt, 2002). Thus, in the aftermath of World War II, the interventionist state played

a central role in shaping and directing markets through regulation and active forms of in-

dustrial policy such as direct ownership in strategic sectors (Vernon and Aharoni, 2014),

active credit policy and various forms of ﬁscal subsidies (Shonﬁeld, 1965;

Thatcher, 2014).

In brief, by the 1980s, southern European economies developed into a model of capi-

talism featuring the following characteristics (Amable, 2003): dualized welfare states or-

ganized around the central role played by the family and the protection of labour market

insiders (Ferrera, 1996); dual labour markets with a divide between highly protected in-

siders and unprotected outsiders; adversarial industrial relations and a fragmented system

of interest representation conducive to inﬂationary wage-setting; the dominance of small

and medium enterprises, often family-owned; a bank-based system of corporate gover-

nance, often under political control; rooted forms of political clientelism (Hopkin and

Mastropaolo, 2001); little investment in research and development, low public expendi-

tures in education, low enrolment rates in tertiary education and weak vocational training

systems. Unsurprisingly, these countries pursued production strategies based on price

rather than quality competition and were apt to currency devaluations to compensate

for systematic expansionary ﬁscal and wage policies and structural deﬁciencies

(Hancké, 2013; Scharpf, 2016).

The Rise of Tourism-Led Growth in Europe’s Southern Periphery 243

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Due to these characteristics, the deepening of European economic and monetary inte-

gration and economic globalization have hit southern European economies

disproportionally hard. First, the rise of the European regulatory state has imposed a shift

in national economic governance for which southern Europe’s statist models were unﬁt.

European competition policy and state aid regulations have severely reduced the capacity

for statist forms of economic governance and have tilted the balance of power in favour of

markets and regulatory governance (Majone, 1994). By privatizing state-owned assets

and liberalizing core strategic sectors, southern European states have lost their grip on

the economy and their pivotal role in domestic markets.

Second, the Maastricht Treaty and the adoption of the single currency have removed

further governance capabilities that had historically been crucial for southern Europe’s

states. On the one hand, the loss of exchange rate policy prevents the pursuit of compet-

itive currency devaluations to mitigate structural deﬁciencies. Conversely, the Stability

and Growth Pact constrains countercyclical ﬁscal policy to pursue aggregate demand

management. Finally, a one-size-ﬁts-none supranational monetary policy fostered eco-

nomic divergence between the high-inﬂation southern periphery and the northern

low-inﬂation core (Enderlein, 2006; Scharpf, 2011).

Taken together, the EMU has forced a hard-currency regime into previously

soft-currency countries, while the European regulatory state prevents governments from

steering domestic markets. Having lost the crucial governance capabilities necessary to

run a statist model, southern Europe’s economies found themselves between a rock and

a hard place by the turn of the century. On the one hand, their political economies were

simultaneously too regulated and expensive to compete on price with the low-cost newly

industrialized economies in the developing world and eastern Europe. On the other hand,

their persisting structural weaknesses prevented them from competing upmarket with the

high-skilled, high value-added production systems of northern Europe (Burroni et

al., 2022; Simoni, 2020). In fact, China’s entry into the World Trade Organization

(WTO) in 2001 generated an asymmetric shock in the eurozone. Northern Europe’s econ-

omies based on the export of high value-added production were well positioned to reap

the beneﬁts of the growing Chinese demand for capital and industrial goods. At the same

time, however, southern European economies were hit hard by low-cost competition in

key sectors of their economies by countries with low labour costs and weak labour rights

(De Ville and Vermeiren, 2016). All these factors, some scholars have argued, contributed

to the ‘peripheralization’of southern European economies within the EMU (Celi

et al., 2017; Rhodes et al., 2019) and their deindustrialization (Gambarotto et al., 2019).

Before the crisis, southern European economies within the EMU pursued a growth

strategy based on domestic demand expansion and centred in their large, sheltered sectors.

Conversely, EMU core countries relied on export-led growth strategies based on

manufacturing goods (Austria, Belgium, and Germany) or high-end services (the

Netherlands) (Hassel and Palier, 2021). These two complementary models were kept to-

gether in the EMU thanks to ﬁnancial integration and capital ﬂows from Germany, France

and the UK to peripheral economies (Blyth, 2013; Jones, 2015; Stockhammer, 2016).

However, this ‘toxic complementarity’(Fuller, 2018) came to a halt when the global ﬁ-

nancial crisis disrupted ﬁnancial markets and inter-bank lending froze. Panic and uncer-

tainty generated a sudden stop crisis and the reversal of ﬁnancial ﬂows towards northern

Europe (Merler and Pisani-Ferry, 2012).

Reto Bürgisser and Donato Di Carlo244

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In the adjustment process, southern European countries were forced into ﬁscal auster-

ity, internal devaluations and structural reforms through formal and informal conditional-

ity imposed by European institutions (Braun et al., 2021; Bulfone and Tassinari, 2020;

Hodson and Puetter, 2013). These measures have killed the domestic drivers of aggregate

demand, imposing a ‘ﬂight to exports’(Scharpf, 2016). Since the ﬁnancial crisis, southern

European countries have been forced to export their way to economic growth or ‘perish’

(Perez and Matsaganis, 2019).

However, as we document below, southern European economies have increasingly

capitalized on their comparative advantage in the tourism industry in their quest for

export-led growth. In fact, these countries enjoy a comparative advantage in tourism

exports thanks to their climate, geographical location, natural resources and historical/

cultural heritage, as indicated by their high scores in the ‘Travel and Tourism Competi-

tiveness Index’of the World Economic Forum (Calderwood and Soshkin, 2019).

Export or Perish? Southern Europe’s Shift towards Tourism-Led Growth in the Aftermath

of the Euro Crisis

As shown in Figure 1,ﬁscal austerity and internal devaluation during the last decade de-

pressed domestic demand and forced southern European countries into a ‘ﬂight to ex-

ports’(Scharpf, 2016). The slow growth of the post-crisis period has been driven almost

Figure 1: Average Yearly Contribution to the Change of GDP by Aggregate Demand Component.

Source: AMECO.

The Rise of Tourism-Led Growth in Europe’s Southern Periphery 245

Ltd.

exclusively by net exports in Greece, Italy and Spain. In Portugal, next to net exports, pri-

vate consumption has also been an important driver of GDP growth.

The contribution of net exports to GDP growth has diminished in northern Europe

after the crisis –most notably in Germany but also in Austria, Belgium and Finland.

Conversely, since the aftermath of the ﬁnancial crisis, net exports have become the

main drivers of GDP growth in southern Europe, reversing the pre-crisis trend (see

Figure 2).

However, export-led growth in southern Europe was driven mainly by exporting tour-

ism services. Figure 3shows that receipts from international tourism account for around

one-fourth of total exports in Greece and Portugal. Here, one should highlight an apparent

‘country-size effect’regarding the incidence of tourism exports in total exports. Smaller

countries with less diversiﬁed industrial systems like Portugal and Greece depend heavily

on tourism receipts for their export-led growth. Spain is located somewhere between the

smaller southern countries and Italy. Italy, instead, does not differ much from the other

countries of the EMU core, with tourism exports accounting for only around 8 per cent

of total exports. While surprising, Italy’s low share of tourism exports can be explained

partly due to Italy’s incapacity to devise coherent developmental policies to keep up with

the international competition in tourism markets (OECD, 2011) and due to Italy’s larger,

more sophisticated, and resilient industrial sector.

Southern Europe’s increased dependence on international tourism for growth can be

gauged through a balance of payment analysis. Figure 4shows current account balances

Figure 2: Average Yearly Contribution of Net Exports to the Change of GDP.

Source: AMECO.

Reto Bürgisser and Donato Di Carlo246

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Figure 3: Incidence of Tourism Exports in Total Exports.

Notes: EMU core includes Austria, Belgium, France, Germany, Netherlands and Finland. Tourism

includes the travel and passenger transport items.

Source: UNWTO

Figure 4: Current Account Balance for International Tourism Services, % of GDP.

Notes: EMU core includes Austria, Belgium, France, Germany, Netherlands and Finland. Tourism

balance includes the travel and passenger transport items.

Source: UNWTO

The Rise of Tourism-Led Growth in Europe’s Southern Periphery 247

Ltd.

for international tourism services. While EMU core countries and the UK record stable

deﬁcits, southern European surpluses have skyrocketed between 2010 and 2019. Italy –

the outlier –displays a small and constant surplus of around 1 per cent of GDP while

Spain’s tourism surplus has increased from 3 to 4 per cent. However, it is in the small

southern European economies that the most spectacular tourism-led growth can be ob-

served. As of 2019, Greece runs a 9 per cent of GDP tourism surplus –a threefold in-

crease compared with 2010. Over the same period, Portugal’s tourism surplus has more

than doubled, standing at more than 7 per cent of GDP. Thus, while EMU core countries

continue to run current account surpluses driven by exports of manufactured goods (for

example, Germany) or high-end services (for example, Netherlands) (Hassel and

Palier, 2021), these imbalances have now been mirrored by southern Europe’s mounting

surpluses from international tourism.

Figure 5further indicates that rising tourism surpluses are not the result of declining

outbound tourism. Outbound tourism (imports) in southern Europe has remained ﬂat over

the last three decades and has even increased slightly since 2015. On the contrary, except

for Italy, inbound tourism (exports) in southern Europe has skyrocketed after 2010. More-

over, the steep rise in inbound tourism in southern Europe is not mirrored by an equal in-

crease in outbound tourism in EMU core countries and the UK. However, this does not

imply that tourism-led growth in southern Europe relies increasingly on non-European

Figure 5: Inbound and Outbound Tourism Expenditure, % of GDP.

Notes: EMU core includes Austria, Belgium, France, Germany, Netherlands and Finland. Tourism

balance includes the travel and passenger transport items.

Source: UNWTO

Reto Bürgisser and Donato Di Carlo248

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tourists, but instead that northern Europeans are more often travelling to southern Europe

than other world regions, pointing to a regional recomposition of tourism patterns.

This regional recomposition is evident in Figure 6, which shows countries’bilateral

balances of the travel item of the services’current account. It unequivocally indicates that

northern European and British citizens have substantially expanded their imports of tour-

ism services from southern Europe after the eurozone crisis. Thus, southern Europe has

become increasingly economically integrated with northern Europe and the UK thanks

to international tourism. Greece runs surpluses of around 1.4 per cent of GDP vis-à-vis

both Germany and the UK. These surpluses have more than doubled over the last decade.

Greece also runs substantial and increasing surpluses vis-à-vis France, Austria and the

Netherlands. Similarly, Portugal runs a 1.4 per cent of GDP travel surplus vis-à-vis the

UK, surpluses of around 1 per cent of GDP vis-à-vis both Germany and France, and sub-

stantial and increasing surpluses vis-à-vis other EMU core countries. Data on Spain are

scant and bilateral balances are unavailable. Yet, travel receipts as a per cent of GDP show

inﬂows of 1.2 per cent of GDP from the UK and of 0.8 per cent of GDP from both

Germany and France. Again, Italy is the outlier with 0.3 per cent of GDP travel surpluses

from Germany.

In a nutshell, the analysis of tourism’s contribution to economic growth yields unique

insights. As highlighted in the literature, the engine of growth in southern Europe after the

crisis has been net exports engineered via ﬁscal and wage devaluations (Perez and

Matsaganis, 2019; Scharpf, 2016). However, what has been neglected is the central role

Figure 6: Bilateral Travel Balances or Inbound Receipts, as a percentage of GDP.

Notes: Data on bilateral balances for the travel item of the current account is not available in Spain

and travel receipts only from 2016

Sources: Bank of Greece, Bank of Italy, Bank of Portugal, Bank of Spain

The Rise of Tourism-Led Growth in Europe’s Southern Periphery 249

Ltd.

of international tourism in this adjustment process. Tourism is a substantial component of

these countries’exports and a major engine of growth and employment creation. When

considering the direct and indirect impact of tourism on national economies, tourism ac-

counts for roughly 20 per cent of GDP in Greece, 17 per cent in Portugal, 15 per cent in

Spain, and 13 per cent in Italy (Figure 7left panel). In terms of employment, one-fourth in

Greece and one-ﬁfth in Portugal are employed in a business that directly or indirectly de-

rives its income from tourism activities. In Spain and Italy, around 15 per cent work in a

tourism-related undertaking (Figure 7right panel). On the contrary, tourism services’con-

tribution to GDP and employment in EMU core countries and the UK is low and declin-

ing steadily over time.

While we do not have the space to provide conclusive evidence, we hypothesize that

the rise of tourism-led growth in the south has likely been driven by the combination of

amarket-based and an agency-based mechanism.

On the one hand, the expansion of tourism exports has likely been boosted by internal

devaluation in southern Europe after the crisis. Our calculations indicate that tourism ex-

ports are signiﬁcantly price-sensitive in Italy, Greece and Spain, while Portugal’s tourism

Figure 7: Total Contribution of Tourism to National GDP (Left Panel) and Employment (Right

Panel)

Source: World Travel and Tourism Council (WTTC).

This is only partially related to political turmoil in the Middle East and Northern Africa (MENA). Despite a fall in tourist

arrivals in 2011, they returned to previous levels and experienced steady tourism growth above the world’s average before

the COVID-19 pandemic (Hopﬁnger and Scharfenort, 2020; UNWTO, 2019). However, it played a role in the restructuring

of tourism ﬂows, that is, northern Europeans travelling more often to southern Europe, while the MENA countries increas-

ingly rely on non-European tourists.

Reto Bürgisser and Donato Di Carlo250

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competitiveness appears less price-sensitive (Tables A1–A4 and Figure A1 in the Online

Appendix). This may be due to Portugal already being a much cheaper travel destination

than Italy, Spain and Greece.

Since 2008/09, Spain, Greece and Italy have experienced

lower inﬂation of tourism services’prices relative to the EU average. Thus, southern

Europe’s tourism exports have seemingly beneﬁted from the decline in the relative price

of tourism-related services vis-à-vis the rest of the EU.

On the other hand, however, southern European governments have also developed co-

herent industrial policies to capitalize on their comparative advantage in tourism. Avail-

able assessments of industrial policies for tourism development suggest that governments

succeed (i) when generous public budgets support comprehensive developmental strate-

gies; (ii) when the governance of tourism policy is centralized or tightly coordinated at

the national level to activate synergies and co-operation among the plethora of actors

and economic sectors involved in the travel and tourism industry; and (iii) when govern-

ments support domestic markets by creating institutional complementarities on which

tourism thrives –such as physical (for example, airports, highways) and digital (for ex-

ample, marketing/advertising platforms) infrastructures, vocational training schools to up-

grade tourism-speciﬁc skills, and the integration of small and medium-sized enterprises

(SMEs) in the tourism value chains (Haxton, 2015).

In this respect, Greece (2007), Spain (2009) and Portugal (2007) have all successfully

implemented ‘National Strategic Plans’to rebrand, upgrade, diversify and promote their

domestic tourism industries internationally. While Greece and Portugal feature a highly

centralized governance of tourism, Spain tightly co-ordinates the autonomous regions’ac-

tivities at the national level under the aegis of the Ministry of Industry, Tourism and Trade

(OECD, 2012,2014). By the early 2010s, all three countries devoted large budgets to the

promotion of tourism; earmarking between 6 and 8 per cent of their total budgets to tour-

ism policy (Blanke and Chiesa, 2013, p. 405). Italy –the outlier in our account –has so

far not implemented a national developmental plan, let alone formed a coherent institu-

tional setting for tourism governance. This is largely due to the regionally fragmented

and unco-ordinated governance of tourism policy, which resulted from the broader disor-

ganized decentralization to regional governments in the late 1990s (OECD, 2011). As a

result, Italy’sﬁrst strategic tourism plan developed by the government in 2013 has never

been implemented. Initially developed to counteract Italy’s loss of tourism market share,

the plan failed because the government did not include the regional stakeholders, which

continue to promote their regional destinations individually (Banca D’Italia, 2018,p.

102). Moreover, Italy spent approximately half (3.6 per cent of total budgets) compared

to its southern European peers on tourism development and promotion (Blanke and

Chiesa, 2013, p. 405).

Conclusion: Tourism-Led Growth in the European Political Economy

This article speaks to burgeoning European political economy debates by directing

scholars’attention towards a novel and hitherto neglected strategy for export-led growth

based on internationally traded tourism services. We aimed to analyse how the process of

For instance, measured in terms of average hotel room rates, prices in Portugal were much lower than those in Spain,

Greece, and Italy in the early 2010s (Blanke and Chiesa, 2013, p. 440).

The Rise of Tourism-Led Growth in Europe’s Southern Periphery 251

Ltd.

European economic and monetary integration has provided both opportunities and con-

straints underpinning southern Europe’s increasing reliance on tourism-centred growth.

Through a balance of payment analysis, we have shown that southern European econo-

mies have substantially expanded their current account surpluses in the tourism services

and that the main export markets reside in the EMU core countries and the UK. Especially

after the ﬁnancial crisis, tourism exports have thus been major drivers of growth and em-

ployment creation in southern Europe.

We argue that the process of European economic and monetary integration has been a

double-edged sword, simultaneously incentivizing and forcing southern European

governments to reap their comparative advantages in the tourism industry. On the one

hand, European integration processes have created the preconditions for a boom of

intra-European travel, paving the way for southern Europe’s growing specialization

as Europe’s tourism destinations. On the other, EU state-aid prohibitions and a

hard-currency regime cum legal constraints on national budgets pre-empt southern

European countries’previous capacity to pursue growth strategies centred on expansion-

ary ﬁscal and wage policy as well as competitive devaluations. International tourism now

provides these economies with an option for export-led growth compatible with the re-

quirements of the EMU’s hard-currency regime and Europe’s regulatory state. Although

the EMU as a whole has moved towards a sizeable export-oriented bloc (Scharpf, 2016),

different types of export-oriented growth strategies now co-exist in Europe. Over the last

decade, the persistent surpluses of northern economies in manufacturing or high-end

services have become the mirror image of structural tourism surpluses in southern

Europe.

However, while growing tourism surpluses have partially compensated for the collapse

of domestic demand in southern Europe after the eurozone crisis, an over-reliance on in-

ternational tourism is highly problematic. First, tourism fosters a restructuring of eco-

nomic activity centred on low-skilled, low-productivity activities. It leaves southern

Europe structurally dependent on northern European tourists for growth and likely

trapped in a bad equilibrium, while northern core countries increasingly move towards

high-skilled, high value-added manufacturing and high-end services. Second, the unstop-

pable growth of global tourism comes with ﬁerce competition from developing countries,

which are easily reachable through affordable ﬂights. These countries enjoy comparable

natural and cultural resources but have lower prices and labour standards. Unless southern

Europe upgrades its tourism offer, low-cost price competition for tourist destinations is

likely to worsen even further employment and wage conditions in its tourism industry.

Third, high CO

emissions of the aviation industry and the damage to local natural re-

sources are orthogonal to climate change mitigation and environmental protection.

Fourth, a tourism-led growth strategy is highly vulnerable to exogenous shocks. As the

world has faced an unprecedented global pandemic, tourism activities have been among

the most affected sectors and southern Europe has been hit disproportionally hard.

Therefore, it is crucial to gain a better understanding of the role of international tourism

within today’s globalized economies. The recent literature on the political economy of

growth focused mainly on the (shrinking) manufacturing sector, high-end services, or

FDI attraction. While this focus remains legitimate, neglecting the tourism industry is

no longer possible. For better or worse, tourism has emerged as one of the world’s

fastest-growing industries and internationally traded services. Too little, if anything, is

Reto Bürgisser and Donato Di Carlo252

Ltd.

known in comparative political economy about the determinants of these secular

socio-economic transformations and their social, economic, environmental and political

consequences.

We aimed to provide a macro-level analysis of longitudinal and cross-country develop-

ments of tourism-led growth in Europe. Building on our ﬁndings, future research should

investigate the comparative political economy of tourism and uncover the characteristics

and the socio-economic drivers of different varieties of tourism-led growth strategies in

Europe. In fact, the tourism industry has become highly diversiﬁed over time with coun-

tries specializing in different types of tourism activities (for example, educational, medi-

cal, cultural or business tourism). Such specializations differ substantially in terms of the

sophistication and the value added of the services provided as well as the institutional

complementarities and physical infrastructures required to sustain such growth strategies.

Hence, future research should analyse the different policy pillars of various

tourism-centred strategies: investment in transport infrastructure, systems of skills forma-

tion, attraction of tourism FDI, destination management organizations, and professional

services in support of the tourism industry (for example, insurance, marketing, advertise-

ment). Lastly, future research should investigate the politics of tourism-led growth in dif-

ferent countries to uncover the social coalitions underpinning governments’developmen-

tal strategies.

Acknowledgements

We would like to thank Odysseas Konstantinakos for excellent research assistance. Previous versions

of this article were presented at the Annual Conference of the Council of European Studies 2021,

the Workshop on the Political Economy of Growth in Peripheral Economies, and at seminars at

the European University Institute, University of Zurich, and the Max Planck Institute for the Study

of Societies. We are very grateful for insightful comments and feedback from Björn Bremer, Fabio

Bulfone, Loriana Crâsnic, Lukas Haffert, Anke Hassel, Martin Höpner, Philipp Kerler, Maximilian

Kiecker, Camilla Locatelli, Giorgio Malet, Valentina Petrović, Vera Šćepanović, Marco Simoni,

Wolfgang Streeck, Arianna Tassinari, Elisa Volpi, Visnja Vukov and the anonymous reviewers of

the JCMS. Open access funding provided by Universitat Zurich.

Correspondence:

Reto Bürgisser, Department of Political Science, University of Zurich, Affolternstrasse 56,

CH-8050 Zurich, Switzerland.

email: buergisser@ipz.uzh.ch

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Many African states are relying on or have identified tourism to accelerate their growth and the continent has become the world’s second fastest growing tourist industry. However, African states have also not been spared by increasing terrorism attacks during the past decades, probably hindering the growth of this sector to certain extent. This study examines the relationship between terrorism and tourism for a sample of selected African countries over the period 1995 to 2017. Given the dynamic nature of tourism demand and the possibility of endogenous relationships in the terrorism-tourism nexus, dynamic panel data analysis, namely a Panel vector error correction model (PVECM) is employed. The results confirm that terrorism negatively affects tourism demand in Africa and this can be explained by the reactive psychology of tourists to the various aggravated terrorist attacks in the countries. Moreover, the findings show that an increase in tourism may have resulted in an increase in terrorist attacks, hence confirming a bi directional causality between tourism and terrorism.

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Article

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This article argues that the quiet politics of informal business-state interaction explains the political determinants of growth regimes. Building on the business power literature within the study of comparative capitalism, it shows that the noisy politics of elections often leads to changes of government but rarely to fundamental changes in the growth regime. Rather, growth models can be traced to the interactions and interests of dominant corporations within a country and its policymaking elites. The argument is developed through a comparative case study research design, using the case of foreign direct investment–led (FDI-led) growth in Ireland and Hungary. FDI-led growth regimes are a universe of cases that rely on state-led industrial and enterprise policies targeting the capital investment of foreign-owned multinational firms. Despite periods of noisy electoral politics challenging basic tenets of the FDI-led growth model in both Hungary and Ireland, the continuity of FDI-oriented growth is traced to the corporate politics of business-state elite deals.

Growth and Welfare in Advanced Capitalist Economies: How Have Growth Regimes Evolved?

Book

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Growth and Welfare in Advanced Capitalist Economies takes stock of the major economic challenges that advanced industrial democracies have faced since the early 1990s and the responses by governments to them. It has three goals: firstly, to further our understanding of how political economies have transformed over the past decades; secondly, to analyse the contribution of governments to these changes, by looking at their growth strategies and thirdly, to highlight and analyse the role of the reforms of welfare systems in this transformative change.In a nutshell, this book maps and provides general understanding of the evolution of growth regimes in advanced capitalist countries. It identifies five main growth regimes in contemporary advanced capitalist economies (three export-led and two domestic demand-led ones). To do so the book combines a supply side approach to economic growth as advocated by the Varieties of Capitalism Literature (OUP, 2001) with a demand side perspective as the recent discussion on growth models has exemplified. It argues that all political economies consist of growth regimes, which are based on a set of institutions that shape the supply side of the economy as well as on demand drivers such as government spending and private consumption. Both supply and demand are heavily shaped by the welfare state which provides for skills through education systems and stimulates demand through high social spending and private pension funds. The book focuses on the analysis of welfare reforms as growth strategies pursued by governments in an era characterised by financialization and the rise of the knowledge economy.

Tourism Geography of the MENA Region: Potential, Challenges and Risks: Editorial

Article

Oct 2020

The countries of the MENA region cover an area with a diverse geography and a diverse tourist capital. The natural and cultural assets of the region appeal to different target groups, but have not yet been fully exploited, are not usable or have been irrevocably destroyed by unrest, uprisings, and wars. In many countries in the region, structural problems in tourism policy and the economy aggravate the situation. As a result, international tourist arrivals and income from tourist expenditures have developed differently in the various countries of the region. Using selected examples, this special issue provides a deeper but necessarily selective insight into the many facets of tourism in the countries of the MENA region and highlights at least some of the broad spectrum of phenomena associated with tourism geography. This editorial provides a framework to position the selected case studies within broader aspects of tourism development in the MENA region. It assesses the spatial differentiation of tourism supply and demand and looks at the political situation, especially since the so-called ‘Arab Spring’ and the related challenges for the tourism industry. The current effects of the so-called coronavirus crisis are not considered, as the special issue was conceived before the crisis began.

Varieties of Capitalism

Book

Aug 2001

Applying the new economics of organization and relational theories of the firm to the problem of understanding cross‐national variation in the political economy, this volume elaborates a new understanding of the institutional differences that characterize the ‘varieties of capitalism’ found among the developed economies. Building on a distinction between ‘liberal market economies’ and ‘coordinated market economies’, it explores the impact of these variations on economic performance and many spheres of policy‐making, including macroeconomic policy, social policy, vocational training, legal decision‐making, and international economic negotiations. The volume examines the institutional complementarities across spheres of the political economy, including labour markets, markets for corporate finance, the system of skill formation, and inter‐firm collaboration on research and development that reinforce national equilibria and give rise to comparative institutional advantages, notably in the sphere of innovation where LMEs are better placed to sponsor radical innovation and CMEs to sponsor incremental innovation. By linking managerial strategy to national institutions, the volume builds a firm‐centred comparative political economy that can be used to assess the response of firms and governments to the pressures associated with globalization. Its new perspectives on the welfare state emphasize the role of business interests and of economic systems built on general or specific skills in the development of social policy. It explores the relationship between national legal systems, as well as systems of standards setting, and the political economy. The analysis has many implications for economic policy‐making, at national and international levels, in the global age.

FROM PATRONAGE TO CLIENTELISM: COMPARING THE ITALIAN AND SPANISH EXPERIENCES

Chapter

Sep 2001

This 2001 book charts the evolution of clientelist practices in several western European countries. Through the historical and comparative analysis of countries as diverse as Sweden and Greece, England and Spain, France and Italy, Iceland and the Netherlands, the authors study both the 'supply-side' - the institutional context in which party leaders devise and implement their political strategies - and the 'demand-side' - the degree of 'empowerment' of civil society - of clientelism. This approach contends that clientelism is a particular mix of particularism and universalism, in which interests are aggregated at the level of the individual and his family 'particularism', but in which all interests can potentially find expression and accommodation 'universalism'. In contrast, 'consociationalism' and 'corporatism' are systems of interest representation in which interests are aggregated at the level of 'social pillar' or the functional association 'universalism', but in which not all interests can find representation and accommodation 'particularism'.

The Political Economy of Monetary Solidarity: Understanding the Euro Experiment

Book