Bringing Balance to the Force? A Comparative Analysis of Institutionalisation Processes in the G20’s Mutual Assessment Process and the EU’s Macroeconomic Imbalances Procedure

ABSTRACT

Events from 2008 onwards have bought the old consensus on the sound money and finance paradigm (the ‘Great Moderation’) into bold relief. One manifestation of this crisis of belief is the increased focus on global imbalances, institutionally reflected in the creation of the Mutual Assessment Process (MAP) at the G20 level and subsequently the Macroeconomic Imbalances Procedure (MIP) at the European Union (EU) level. Comparing both newcomers to international macroeconomic policy coordination, this article analyses four features that shape (and we show, institutionalise) the process of paradigm contestation: presence, position, promotion and plausibility. We argue that although initially the G20’s MAP scored higher in terms of presence, position and promotion, it is the EU’s MIP, which heralds a more substantial shift in macroeconomic management. Collectively, both indicate the increased prominence of global imbalances as the subject of inter- or supranational management, and a broadening of the notion of necessary or legitimate economic governance.

KEYWORDS:

• Macroeconomic policy
• global imbalances
• the IMF
• the EU
• G20
• stability and growth pact

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Charlotte Rommerskirchen is Lecturer in International Political Economy at the University of Edinburgh. Her research interests lie in the politics of financial and economic crisis, monetary integration and financial globalisation. She has recently published in the European Journal of Political Research, Socio-Economic Review and New Political Economy.

Holly Snaith is Assistant Professor at the University of Copenhagen, where she is affiliated with the Europe and the New Global Challenges (‘Eurochallenge’) project. Her research interests lie in the construction of economic ideas within European institutions. She has published in the Journal of Common Market Studies, Politics, and New Political Economy.

Notes

1 The EES is now also conducted as part of the European Semester process.

Additional information

Funding

This work was supported by German National Merit Foundation (Studienstiftung des deutschen Volkes); the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007–2013); University of Copenhagen UCPH 2016 funds.