1. washingtonpost.com/politics/2020/… This article by @ankehassel and Kathy Thelen is a good example of how @monkeycageblog can bridge academic knowledge and public debate. There's a lot of argument around the US Paycheck Protection Program. How does it compare to what other countries do?
2. Hassel and Thelen use their understanding of comparative political economy and public policy to get at the crucial differences between US and European approach. Both have programs to subsidize firms to keep people working. But differences of approach have big consequences.
3. First, the US approach was to throw a specific pot of money at the program on a first-come, first served basis. This led to a feeding frenzy - far more companies wanted it than got it (hence some of the politics around a second package). Big contrast to European approach
4. which was to introduce this as a universal program - all firms that qualified would get support. Result - less panic, far more predictability. But the second difference between European states and the US was arguably more politically consequential.
5. European states have bureaucracies that can dispense money straightforwardly. Some countries (Germany) already had wage support programs, and infrastructure in place. Other countries (UK) were able to retrofit existing bureaucracy quickly to carry out the new task.
6. The US - despite its size - does not have this kind of bureaucratic capacity. As is often the case, it handed the key tasks of implementation to private actors - in this case banks, who were supposed to administer the loans. Unsurprisingly, the banks had their own interests.
7. This explains why, for example, as the NYT reported nytimes.com/2020/04/22/bus… banks gave "concierge treatment" to favored customers. These customers are both more valuable and easier to deal with (the bank already has much of their relevant information)
8. So, unsurprisingly US reporting has focused on the visible problems of the program - the brawl among businesses desperate to get support they need to keep going, the consequences for people who will lose their jobs, and the mixed incentives of the banks administering it.
9. But reporters don't usually have the luxury of investigating the deeper structural forces beneath these problems - and the reasons why some countries have different structures that mean that these problems don't exist (although they have their own special difficulties).
10. This also means that US based commenters sometimes get things wrong, because they understandably extrapolate from the US experience to draw incorrect generalizations about how support schemes work in other countries. This is a good example -
11. Trump has applied for worker assistance from the Irish government. @ilangoldenberg assumes that this gives the Irish government great leverage over Trump - Ireland might or might not provide assistance, depending presumably on whether Trump does some favor in return.
12. That would be plausible in the US system - but the Irish scheme is universal and nondiscretionary. If you meet the criteria - explained here - gov.ie/en/press-relea… - you get the money. Trump's financial entanglements abroad may be a problem - but this isn't an example.
13. Finally, the US debate is often extremely parochial. There isn't much knowledge of how other countries do things, or attention paid to it. This impoverishes the US understanding of what is and is not possible. It isn't easy to draw straightforward lessons from other countries
14. With different trajectories of development, ways of organizing economy etc. But the notion that the US is some unique and incomparable case is more often than not its own kind of rhetoric, insulating the US from change by denying that things could possibly be different. Finis
As an update, reading it over again, the above mention of @ilangoldenberg comes across as much more ungracious than it should be, for which my apologies (he had separately acknowledged the point about Ireland's system while I was composing the thread)
