The democracy of European fiscal consolidation: reform governments in Greece, Ireland and Italy

Abstract

Are technocratic governments the reformers of last resort? And why are they appointed? Facing the ongoing European debt crisis, some countries choose to put technocrats into reform government offices, while others are able to reform their markets and fiscal structure within regularly elected governments. What differentiates these technocratic from non-technocratic governments in terms of origins and reform efforts? And are technocratic government compositions more able to implement complex market and fiscal reforms in a short period of time when facing difficult institutional settings? In order to answer these questions, this research follows an institutional approach along rational choice theory and the concept of varieties of capitalism. A comparative study of the political economy of Greece, Ireland and Italy examines the different underpinnings that build-up to these reform governments and shows how reform efforts and forms of reform governments, understood as being either partisan or non-partisan composed, vary between different varieties of capitalism. The findings provides evidence that the varieties of capitalism configuration, and the embedded features of economic and political institutions, influence the incentives for counties to appoint technocratic governments when facing an economic crisis, thus advancing an existing model that describes the likelihood of