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Jerome Roos cover PhD thesis

Why Not Default? The Structural Power of Finance in Sovereign Debt Crises

PhD Thesis
Jerome Roos
European University Institute. Defended (without corrections) on May 19, 2016. Jury: Pepper Culpepper (EUI/Oxford); Robert Wade (London School of Economics); Daniel Mügge (Univ. of Amsterdam); Lászlo Brúszt (EUI/Scuola Normale Superiore).


This thesis aims to answer a simple question with far-reaching implications: why do heavily indebted peripheral states not default on their external debts more often? Building on case studies of sovereign debt crises in Mexico (1982-’89), Argentina (1999-’05) and Greece (2010-’15), the findings of this research demonstrate that the traditional explanations of debtor compliance proposed in the economics literature — centering on reputation, sanctions and democratic institutions — hold limited explanatory power.

Instead, the thesis spells out a political economy approach to sovereign debt that recognizes the importance of social conflicts and power struggles over the distribution of adjustment costs. In these conflicts, it is argued that finance possesses a unique advantage over indebted states: through its capacity to withhold the short-term credit lines on which the latter depend for their reproduction, lenders can inflict debilitating spillover costs that greatly limit the debtor’s room for maneuver. This structural power of finance has increased markedly as a result of globalization and financialization, and the main objective of this project is to identify the exact mechanisms through which it operates and the conditions under which it is effective and under which it breaks down.

The findings highlight the importance of debt concentration in the lending structure (which eases the formation of creditors’ cartels, strengthening market discipline); the exposure of big banks and institutional lenders in core countries (which compels creditor states and international financial institutions to intervene as lenders of last resort and provide emergency loans under strict policy conditionality); and the bridging role fulfilled by bankers and elites inside the borrowing country (which endows them with a privileged position in financial policymaking and internalizes fiscal discipline into the debtors’ state apparatus). The thesis concludes by spelling out the implications of these findings for the quality of democracy and the study of political economy more generally.

Street Politics in the Age of Austerity

A Global Movement for Real Democracy? The Resonance of Anti-Austerity Protest from Spain and Greece to Occupy Wall Street

Book Chapter
Leonidas Oikonomakis and Jerome Roos
In: Angelovici, Marcos, Pascale Dufour and Héloïse Nez, Street Politics in the Age of Austerity: From the Indignados to Occupy, Amsterdam: Amsterdam University Press.
How do instances of popular protest spread across borders? This question, which has eluded social scientists for decades, appears to have become more salient than ever in the wake of the mass protests that rocked the world in the wake of the Arab Spring in early 2011. In this chapter, we look at the diffusion of anti-austerity protests from Spain to Greece to the United States, focusing in particular on the claims and organizational forms behind these mobilizations. We note that, despite clear local varieties between them, the15M movement in Spain, the Movement of the Squares in Greece, and the Occupy movement in the United States had a number of basic elements in common, most notably its critique of representation and its alternative organizational forms. How did this critiques and organizational forms spread so rapidly across such widely divergent and geographically distant contexts? This chapter provides a critical theoretical engagement with the theory of diffusion commonly found in the contentious politics literature and proposes an alternative theoretical framework based on the concept of resonance.
Spreading Protest

They Don't Represent Us: The Global Resonance of the Real Democracy Movement from the Indignados to Occupy

Book Chapter
Jerome Roos and Leonidas Oikonomakis
In: Della Porta, Donatella and Alice Mattoni (2014), Spreading Protest: Social Movements in Times of Crisis, Colchester: ECPR Press.
In this chapter, we argue that the international movements for “real” democracy in 2011 spread around the globe through a pattern of resonance. In drawing on this concept, we move beyond the traditional literature in social movement studies, which has generally identified diffusion as the mechanism by which movements spread from one place to another. As we aim to demonstrate, the concept of diffusion rests upon a number of assumptions that do not appear to hold up in the case of the RDM. Building on extensive participatory observation as wellas follow-up interviews with key activists in Greece, Spain, and the United States, we argue that two conditions must be in place for a social movement to resonate and spread across borders:first, different countries must share similar structural conditions; and second they must have pre-existing movement experience and activist networks in place to trigger a broader pattern of resonance within their own country. Movements ultimately spread not as a result of “contagion,” or mindless imitation, but rather because latent potentialities for mobilisation are activated through the inspiration provided by movements elsewhere.