The sovereign debt crisis that currently engulfs Europe highlights how little we understand why flourishing developed countries amass so much public debt in times of peace and prosperity that they become excessively vulnerable to sudden changes in financial markets. It has been extensively investigated why countries borrow from one year to another, but it remains unclear why countries fail to put their fiscal houses in order once their indebtedness reaches dangerous proportions. Arguing against institutionalist and ideational approaches to public borrowing, the talk offers a structuralist explanation, contending that it is the degree of socio-economic polarization within a polity and the country’s position in the international economy that determine a country’s ability to avoid amassing dangerous amounts of debt. It discusses Italy’s and Belgium’s long histories of excessive borrowing and fiscal consolidations to illustrate in a comparative perspective how unsettled societal conflicts lead to unstoppable debt accumulation.
About the lecturer:
Zsófi Barta was a Max Weber Fellow in the European University Institute in Florence, Italy in the 2011-2012 academic year. She completed her Ph.D. in European Studies at the London School of Economics and Political Sciences in August 2011. She holds a graduate degree in International Economics from the Paul H. Nitze School of Advanced International Studies of the Johns Hopkins University and an undergraduate degree in Business Administration and Finance from the Budapest University of Economics. Currently, she is on maternity leave.