Abstract: Passed by Congress in the midst of the financial crisis and shortly before the 2008 elections, the Troubled Asset Relief Program (TARP) authorized the Treasury Department to distribute emergency funds to banks requesting assistance. An individual bank gains utility from the public good of system stability as well as a potential utility from the private good of direct bailout funds. If a bank anticipates enjoying only the public good aspect, then it should face incentives to free ride on the lobbying efforts of others. If it expects to need the bailout funds directly, then it would have an incentive to contribute to lobbying efforts. These lobbying efforts should be more effective if the banks are direct constituents of the elected officials, i.e., the bank is located in the member’s district. I argue that controlling for underlying, district level economic conditions, voting for TARP should increase the probability that banks located in a Representative’s district would receive TARP funds. Moreover, I expect districts where the Representative switched their vote from no to yes should receive additional benefits beyond the baseline effects of supporting passage. Coding TARP recipients according to the congressional district where the bank’s headquarters are located, I test my argument using an instrumental variable approach to isolate the independent effects of supporting TARP on the amount of funds received in a Congressional district. Moreover, the fact that TARP failed on its initial floor vote and required 58 Representatives to switch their votes for passage creates an unique comparison group to test if Representatives were able to secure additional benefits for banks in their district in return for changing their vote. I find that controlling for underlying economic factors, a vote for the TARP program increases the per capita amount of TARP funds by just over $500. Thus, the paper contributes to our understanding of the political economy of responses to the current financial crisis and whether implicit bailout guarantees require active support in order to be carried out.
Currencies and the Aesthetics of Nationalism: Can the Euro Help Establish a European Political Collective? (with Andrew Poe) (PDF)
Abstract: A strategic assumption currently divides the literatures on political economy and nationalism: Public interests are either determined by materialist concerns dictated by economic interests or, conversely, by notions of allegiance defined by ascriptive identities. Both notions of public interest have entangled a growing literature on the status of the European Union as a political entity. Attempting to mitigate this divide, some in the EU literature have begun to focus on the Euro as a means of fostering European identity. Yet, too little theoretical or empirical work has been done on the relationship between the Euro and the genesis of a uniquely European identity compared to specific European nation-states’ own histories in developing nationalist identities through currencies. Our paper argues that, while nation-states have historically employed specific imageries through currencies as a means of evoking an aesthetic of specific national identities, the EU, by contrast, must take a different path to mitigate the still persistent nationalist identities within this new political entity. Ultimately, it is our claim that there is a specific relationship between currencies and the aesthetics of nationalism, and that the European Union, as a super-national polity, must engage in a different style of politics that overcomes both the economic interests and the historical legacy of the nation-building strategies of member states (as indeed it has begun to do already in negotiations with the Greek and Bulgarian states). We use empirical evidence drawn from the EU decisions on the physical appearance of the Euro and public opinion data on attitudes toward the Euro to test our theory.
