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The Many Faces of Crisis

An Analysis of Crisis Management from an Economic and Political Perspective

by Marek A. Cichocki (Volume editor) Tomasz Grzegorz Grosse (Volume editor)
Edited Collection 204 Pages

Summary

The authors of the book examine the phenomenon of crisis from the perspective of political and economic science. The texts of the book are focused on four aspects of the crisis: (1) the development problem, (2) the structural problem, (3) the management problem and (4) the problem of the weakening legitimacy of a specific crisis-stricken system. This book offers a proposal for a methodological approach to the evaluation of crisis reality and to research on the ways of overcoming the crisis by state authorities. The four proposed aspects of the analysis are an attempt to view the crisis from various perspectives, which are interrelated and not always clearly separable.

Table Of Content

  • Cover
  • Title Page
  • Copyright Page
  • About the author
  • About the book
  • Citability of the eBook
  • Contents
  • Introduction. The apparent dimension of the crisis as a research challenge
  • The Eurozone crisis
  • The Asian crisis
  • Regulatory impact assessment and the creation of the economic policy in Poland
  • Public finance crisis and state fiscal competences
  • From crisis to strategy – against the backdrop of the EU
  • Summary and conclusions
  • List of figures
  • List of tables
  • Biographical notes

Marek A. Cichocki

Introduction. The apparent dimension of the crisis as a research challenge

Presence of the crisis has become an apparent phenomenon in the contemporary world, particularly in Europe. This is a new situation compared to previous decades, when after WW2 the Western world was developing at varying degrees but under the general assumption that political and economic processes maintained their continuity, controllability and rationality. Certainly this development process experienced some shocks, e.g. the famous oil crisis of the 1970s, but still it proceeded within the framework of a defined process, within expanding and foreseeable institutional and legal structures, in an environment increasingly diversified but at the same time increasingly interdependent, and mutually linked. As a result of the collapse of the Soviet Union in the early 1990s and the relatively peaceful transformation of the post-communist part of the European continent, an optimistic conviction started to prevail about the solidification of a relatively predictable road of further development on a global scale, from the most advanced core of the Western world to its peripheries, and then on to more and more areas of the world. The emergence of global terrorism and the manifestation of its outcomes in the early 21st century greatly question further developmental prospects in various regions of the world. However, there are still no premises in place which might lead one to believe that the developmental form of the expanded Western world itself will be peaceful and devoid of any serious crises as was assumed. The second decade of the 21st century introduces a fundamental change in this respect. The crisis, which is mainly financial, affecting not only the functioning of the institutions of advanced capitalism themselves and of the globalized financial market being the bloodstream of the contemporary world economy, but also undermining the sense of their underlying values, beliefs, certainties and rules of political and social order, hits hard on the very core of the West. From this moment on all fundamental questions seem to be reopened; both in public debate and in the accompanying academic debate one of the significant issues becomes the question of the crisis as a phenomenon, the identification of its causes, the character of its course, decisive factors, and last but not least the question of what means are available today to well-developed modern western societies to counteract crises and predict their emergence as far as possible.

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The increasingly obvious nature of the manifestations of the crisis in its various dimensions: financial, social, geopolitical, migration-related or institutional, entails a challenge related to capabilities which contain a crisis. On the one hand this is a practical problem of management, related to the issue of political leadership and its ability to create an effective anti-crisis strategy. However, on the other hand we are dealing with a challenge of a theoretical nature, i.e. the necessity of such a conceptualization of the issue of a crisis that would capture its various dimensions – not only economic or political (which seem the most obvious), but also social and cultural. Questions of the inevitability of the emergence of crises and methods for the reduction of their destructive outcomes have always been a niggling issue in political and economic thought. An in-depth reflection related to crisis as a phenomenon is also encountered in the Western world in the period of late, developed western capitalism, i.e. in the late 20th century, when opinions prevailed about the irreversibility and predictability of development. A large body of literature on the said topic is an outcome of this reflection. In Poland, after the period of breakthrough that took place in 1989, besides a few notable exceptions, the problem of crisis did not become the subject of any serious thought. It seems that the issue of transformation, its inevitability and certain assumptions being taken for granted, removed the issue of crisis from sight. Only in recent years has this perspective changed in Poland, opening up the need to deal with the problem in a systematic manner.

This book is the result of an attempt to address the issue of a crisis and methods of crisis management from the perspective of economic and political science theories. Such a joint approach follows from the conviction that in the case of contemporary crises we are dealing with e.g. in Europe, the aspects of economy and politics which are impossible to separate. This is the main premise of the project financed from the National Science Centre funds and carried out by the authors of this volume of papers. It enabled the search for a shared theoretical and methodological thought in those two fields of knowledge with a view to investigating the phenomenon of crisis and attempting to explain it. Consequently this book aims to show relationships between the aforementioned during the performance of anti-crisis actions, i.e. through crisis management and the deployment of any attempted necessary reforms. The dynamics of the mutual relationship between economics and politics, which becomes manifested during a crisis, becomes particularly visible in relation to specific challenges faced by policy-makers. This is mainly the issue of growth that put the task, before politics, of the recovery of economic growth and political stability, which were undermined by the crisis. As a matter of fact this challenge should not be treated too statically, as a return to the lost status perspectives both in the period ←8 | 9→preceding the emergence of a crisis, i.e. the accumulation of various disadvantageous factors, and also quo; it shall refer to the fundamental question of how in the situation where the economic and political stability was impaired we can restore conditions for further safe and responsible development, for which economic growth and political stability themselves are important but inadequate factors. The second core challenge in the economic and political dynamics of a crisis is the problem of structural balance, which may be both the cause of the crisis and the fundamental determinant for an anti-crisis strategy. Structural imbalances can be related to divergent economic determinants (e.g. structural differences of a macroeconomic nature), political determinants (geopolitical differences) or organizational determinants (governance structures). Another challenge is related to the skills and institutions allowing for effective crisis management. This concerns first and foremost the problem of political leadership, the ability to create and apply political anti-crisis strategies, as well as the ability to coordinate actions and flexibility towards changing the dynamic determinants of a crisis. The last challenge constituting a point of reference of the dynamics of the economic-political relationship in a crisis is the challenge of political legitimacy. The fundamental question in this context is whether the deficit of the said legitimacy may effectively block the undertaking of anti-crisis actions and how it can positively influence those actions and under what conditions.

This publication presents the effects of research carried out under the project called Crisis management challenges in economic and political perspective. Each chapter of this publication is the final report of the research in the respective areas addressed by each member of the research team. In the chapter titled “Eurozone crisis”, Tomasz Grzegorz Grosse analyses the character of the anti-crisis measures in the Eurozone undertaken by EU institutions and member states after 2009. In his part he focuses mainly on the issue of developmental conditions in a crisis, on the causes underlying the internal, systemic imbalance of the Eurozone, on the political component of crisis management (leadership and the political arena) and finally on the issue of the democratic legitimacy of the process of anti-crisis actions. In the chapter titled “Asian crisis” Piotr Koryś analyses the crisis in Southeast Asian countries in late 1990s, attempting to describe its causes, course and consequences for a changed arrangement of economic and political power between the states of the entire region. This analysis also allows readers to see interesting parallels between the Asian crisis and the current one in the Eurozone, highlighting the similarities of certain phenomena and fundamental differences. In the chapter titled “Regulatory impact assessment and the creation of the economic policy in Poland”, Łukasz Hardt focuses mainly on the quality and risks related to decisions made by the government. He ←9 | 10→also reflects on the current state-of-play of research on the quality of governance in the state, its traditional and modern forms, and tries to identify the major problems of governance quality in relation to the case of Poland with particular focus on the role of the regulatory impact assessment system. In the chapter titled “Public finance crisis and state fiscal competence”, Jan Fałkowski addresses one of the fundamental problems of the ability of contemporary states to pursue public policies from the viewpoint of a state’s fiscal policy. This problem became glaringly visible in the context of the financial crisis in Europe of recent years, which confronted some states with the threat of total bankruptcy and the necessity to revise existing fiscal policies. However, as Fałkowski demonstrates, this leads governments to embark on a dangerous game with democratic constituencies and social needs, which grow during a crisis and fundamentally influence the ability to perform rational reforms of state policies and the related necessary changes of fiscal policy. In the last chapter titled “From crisis to strategy” Marek Cichocki addresses the relationship between the crisis and the nature of strategies undertaken by policy-makers. From the viewpoint of democratic public opinion expecting the government to launch swift and effective actions in the face of crisis, this relationship seems obvious. However, the problem itself of building the strategy and ability for strategic planning action as the fundamental governance elements remains unsolved on the part of such political actors as states and governments. The joint conclusions of the project related to crisis management problems were put together by Tomasz Grzegorz Grosse in the final conclusions.

This book in no way exhausts the entirety of the issue related to crisis and crisis management. Many problems were only signalled by the authors in the hope that they will become the subject-matter of in-depth research in the future. As has been pointed out before, in Poland there is a clearly visible need to develop research and reflections of the problem of crisis both in social and political science, as well as economics. In the case of our project and the ensuing publications, it was not our top priority to exhaust the topic, as this would have been unrealistic; we wanted first and foremost to combine the political science and economic perspectives with the research on crisis phenomenon and crisis management. This task yielded quite an interesting research plan with multiple practical conclusions, either from the viewpoint of a public administration’s actions or the pursuance of policies by the state. We hope this book will help readers to become familiar with the research results, attract their interest to the covered issues, and in some cases provoke them to embark on their own research.

Tomasz Grzegorz Grosse

The Eurozone crisis

Abstract: The chapter presents an analysis of the Eurozone crisis, reflecting on political and economic challenges, structural problems, especially in the context of the geopolitical system of Europe, as well as crisis management and integration process together with legitimisation questions. The study proves why the defence of the Eurozone was attempted, aiming in particular at the opposition to strong secession tendencies. Furthermore, according to the author, it is difficult to explain why the crisis has not led to an “institutional breakthrough” towards a democratic federation and triggered sharp rivalry for power, as well as over crisis costs distribution between member states instead. The answer to this question should be attached to the problem of political legitimisation. Although the crisis did not cause any formal changes of the treaties in Europe, there have been several informal adjustments within the system. The author defines the described systemic modifications as a model of “asymmetric confederation”, whose main features include not only the uneven distribution of political power between the core and peripheries, but also the asymmetric levels of political legitimisation.

Details

Pages
204
ISBN (PDF)
9783631791981
ISBN (ePUB)
9783631791998
ISBN (MOBI)
9783631792001
ISBN (Hardcover)
9783631791257
Language
English
Publication date
2019 (November)
Tags
political legitimacy geopolitics economic policy institutional theory financial crisis state strategy
Published
Berlin, Bern, Bruxelles, New York, Oxford, Warszawa, Wien, 2019. 204 pp., 2 fig. col., 2 fig. b/w, 3 tables.

Biographical notes

Marek A. Cichocki (Volume editor) Tomasz Grzegorz Grosse (Volume editor)

Marek Aleksander Cichocki is a research director at the Natolin European Centre, a professor of International Relations at the Collegium Civitas and a visiting professor at the College of Europe Natolin. Tomasz Grzegorz Grosse is a sociologist, political scientist and historian. He is also a professor at the University of Warsaw and the head of the Department of European Union Policies.

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Title: The Many Faces of Crisis