Preferences, Preference Formation and Position Taking in a Eurozone Out: Lessons from the United Kingdom
| Author | Hussein Kassim,Thomas Warren,Shaun Hargreaves Heap,Scott James |
| DOI | 10.1177/1478929919864774 |
| Published date | 01 November 2020 |
| Date | 01 November 2020 |
| Subject Matter | Special Issue: The Puzzle of National Preference Formation and the Study of the Euro Crisis |
research-article2020
Special Issue Article
Political Studies Review
2020, Vol. 18(4) 525 –541
Preferences, Preference
© The Author(s) 2020
Article reuse guidelines:
sagepub.com/journals-permissions
Formation and Position
https://doi.org/10.1177/1478929919864774
DOI: 10.1177/1478929919864774
journals.sagepub.com/home/psrev
Taking in a Eurozone
Out: Lessons from
the United Kingdom
Hussein Kassim1 , Scott James2,
Thomas Warren1 and
Shaun Hargreaves Heap2
Abstract
In the literature on member state position-taking in the eurozone crisis, the debate has mainly
centred on whether national preferences are shaped exclusively within the domestic setting or
influenced by shared EU-level norms or interaction within EU institutions. This article goes beyond
this discussion. Drawing on original data collected by the authors, it uses the UK’s experience to
test the claims both of society-centred approaches, including liberal intergovernmentalism, and
perspectives that emphasise the importance of shared EU norms or interaction. It argues that
while the first overlook the role of institutions as both actors and mediating variables in preference
formation, the second have so far focused on the experience of eurozone members, thereby
raising the possibility of selection bias. Treating eurozone form as a series of processes rather than
a single event, it contests the claim that preference formation is always driven by societal interests,
highlights instances where government acts in the absence of or contrary to expressed societal
interests, and reveals limitations of the shared norms critique of liberal intergovernmentalism. It
shows that the UK government was driven by a scholars concern to protect the UK economy
from financial contagion rather than solidarity with its European partners.
Keywords
preferences, preference formation, eurozone crisis, United Kingdom, institutions
Accepted: 10 June 2019
The positions taken by governments in response to the eurozone crisis provide an impor-
tant testing ground for competing theoretical approaches to preference formation.
Although liberal intergovernmentalism (LI) remains the ‘baseline theory’ for many
1University of East Anglia, Norwich, UK
2King’s College London, London, UK
Corresponding author:
Hussein Kassim, University of East Anglia, Norwich NR4 7TJ, UK.
Email: h.kassim@uea.ac.uk
526
Political Studies Review 18(4)
(Naurin, 2018), critics highlight as problematic its assumption that the domestic arena is
insular and emphasise the influence of the wider EU context and shared EU norms in
shaping national preferences (Csehi and Puetter, 2017; Hall, 2012; Schirm, 2016, 2018;
Zimmermann, 2014). Yet, the role of top officeholders or institutions in deciding national
responses to the eurozone crisis has not yet been fully explored.
This article sets out to assess the claims of both LI and its critics through an analysis
of the UK’s role during the eurozone crisis. We argue that although powerful economic
interests (the City of London) were important, they did not always actively mobilise
around the issue and the government frequently adopted preferences at odds with them.
We offer two explanations for this. First, during the early phase of the sovereign debt
crisis, UK government preferences were developed relatively autonomously by a small
group of senior ministers and officials close to the Prime Minister (PM) and the Chancellor.
Second, as the crisis unfolded, however, important political interests – namely, Parliament
and the Bank of England – became central to the definition of UK preferences on euro-
zone reform. Importantly, the UK’s preferences shifted over time from a position of delib-
erately distancing the UK from the crisis to trying to reset relations with the EU. But we
find little concern for EU norms or solidarity.
We make a threefold contribution to the existing literature. First, while LI empha-
sises a bottom-up view of preference formation in the eurozone crisis, this article fol-
lows scholars who have highlighted the importance of political institutions and strategic
calculation by governmental actors (Zimmermann, 2014). Drawing on the ‘old institu-
tionalism’ (Rhodes, 2011), which highlights the role of political institutions as actors, it
argues for the centrality of government agency and the importance of domestic institu-
tional contexts in accounting for government positions. This top-down perspective
stresses that at time governments have significant autonomy from organised societal
interests.
Second, the paper challenges the ‘new institutionalist critique’ (NIC) (Van de Ven
and Hargrave, 2004: 260) of LI, which asserts from several theoretical perspectives
that government preferences are increasingly shaped by EU institutional norms or
orientations. The existing literature focuses on the experience of euro area members
without investigating whether shared norms extend to eurozone ‘outs’. Our evaluation
of EU norms in the context of the UK therefore represents a ‘tough case’ for NIC.
Finally, although ‘big country’ studies of France (Rothacher, 2015), Germany (Bulmer,
2014; Hall, 2012,) and Italy (Bull, 2018) exist, analysis of the UK’s role during the
eurozone crisis remain relatively sparse (Schelkle, 2016; Thompson, 2017 are
exceptions).
The article uses process tracing to examine the development of the UK’s position in
four areas, and to provide a cross-section of policy cases: emergency measures for Greece,
a permanent bailout facility for the eurozone, the fiscal compact and Banking Union. Our
rationale is that the eurozone crisis and eurozone reform need to be analysed as a process
or processes, rather than an event. The analysis of public documents, industry reports and
media coverage from this period is supported by eight anonymous interviews with UK
politicians, civil servants and representatives of financial institutions.
The discussion is organised into three parts. The first critically reviews LI and other
bottom-up approaches, together with the NIC perspective, related to the eurozone crisis.
The second section defines the empirical expectations tested in this article. The third sec-
tion undertakes a process tracing of UK preferences across each of the four cases, before
summarising our main findings.
Kassim et al.
527
Theorising Preferences, Preference Formation and Position
Taking in the Eurozone Crisis: A Critical Overview
Three main theoretical perspectives have been applied to explain national responses to
the eurozone crisis: LI (Moravcsik, 1993, 1997, 1998), a societal approach (Schirm, 2016,
2018), and a ‘new institutionalist’ critique (NIC) (Bickerton et al., 2015; Puetter, 2014).
We review each in turn.
LI and Preference Formation
LI assumes that governments act purposively in the international arena, but emphasise
the critical role of societal actors in defining government preferences (Moravcsik,
1997: 516). Defining preferences as ‘the fundamental social purposes underlying the
strategic calculations of governments’ (Moravcsik, 1997: 513; emphasis added), LI
characterises national preferences as socially constructed and changeable, rather than
fixed and exogenous. Its explanation rests on classical pluralism. Preferences emerge
through domestic political conflict: groups compete for influence by articulating their
interests, and governments respond to these demands by aggregating them (Moravcsik,
1993: 481–483). Hence, ‘[s]ocietal ideas, interests, and institutions influence state
behaviour by shaping state preferences’ (Moravcsik, 1997: 513). In intergovernmental
negotiations, the government therefore ‘represent[s] some subset of domestic society’
(Moravcsik, 1998: 518).
LI’s pluralist foundations have been widely critiqued. Although Moravcsik (1993: 488)
suggests that sectoral issue interdependence creates incentives for groups to mobilise, little
consideration is given to the conditions under which a government will balance these
against other electoral, ideological, partisan or political considerations. Moreover, LI is
largely silent on the causal significance of the particular political or institutional channels
through which societal interests are transmitted to government. In other words, it down-
plays the mediating role played by institutions in privileging some societal interests over
others (Schattschneider, 1960; Tarrow, 1996). It similarly overlooks how the powers of
different branches of government influence outputs (Eckstein, 1979), or how interests and
ideas embodied in state institutions shape decision making (March and Olson, 1989).
More broadly, LI lacks a coherent theory of the state: that is, an account of the organi-
sational structure, constitutional rules, established traditions, and accumulated history of
the domestic polity. While Moravcsik makes reference to the ‘executive’, there is no
account of how governments interact with legislatures, judiciaries or state bureaucracies.
The distinction between ideational, commercial and republican sub-variants of liberalism
could be interpreted as an attempt to recognise and accommodate cross-national differ-
ences ‘linking social preferences and state behaviour’ (Moravcsik, 1997: 515). But these
categories are insufficiently fine-grained to capture how macro-institutional variation in
political systems (e.g. presidential vs parliamentary, majoritarian vs consensual) shape
government...
To continue reading
Request your trial