Reform Support in Times of Crisis: The Role of Family Ties

14 Pages Posted: 30 May 2017

See all articles by Elias Brumm

Elias Brumm

Hertie School of Governance, Students

Johannes Brumm

Karlsruhe Institute of Technology

Date Written: July 2017

Abstract

We argue that an important determinant of voters' support for economic reform is the strength of family ties. While the “crisis hypothesis” predicts that crises facilitate reform, we show in a political economy model that this relation can break down, and even reverse, when agents take into account the effect of reform on their family members. Applied to southern European countries with strong family ties, the model rationalizes why the extremely high (youth) unemployment following the Great Recession has not led to more substantial labor market reforms. In such countries austerity might block rather than foster additional structural reforms.

JEL Classification: D64, D72, J48

Suggested Citation

Brumm, Elias and Brumm, Johannes, Reform Support in Times of Crisis: The Role of Family Ties (July 2017). Economic Inquiry, Vol. 55, Issue 3, pp. 1416-1429, 2017. Available at SSRN: https://ssrn.com/abstract=2976576 or http://dx.doi.org/10.1111/ecin.12426

Elias Brumm (Contact Author)

Hertie School of Governance, Students ( email )

Friedrichstraße 180
Berlin
Germany

Johannes Brumm

Karlsruhe Institute of Technology ( email )

Kaiserstraße 12
Karlsruhe, Baden Württemberg 76131
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
85
PlumX Metrics