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Complexity, coupling and policy effectiveness: the European response to the Greek sovereign debt crisis

Published online by Cambridge University Press:  15 June 2012

Nikolaos Zahariadis
Nikolaos Zahariadis*
Affiliation:
Department of Government, Political Science, University of Alabama at Birmingham, USA
*
Nikolaos ZahariadisProfessor Department of Government 410 HHB University of Alabama at Birmingham Birmingham AL 35294 USA Tel.: 1 (205) 934-3482; Fax: 1 (205) 975-5712 Email: nzaharia@uab.edu
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Abstract

What is the impact of Greece's fiscal meltdown on the effectiveness of Europe's response? Using Perrow's normal accidents theory, I argue that efforts to reduce the likelihood of a Greek default activated conflicting centripetal and centrifugal modes of governance. Greater centralisation in decision-making at the European Union level improves policy effectiveness because it addresses problems of contagion but it simultaneously raises the risk of overall failure by increasing diagnosis, coordination and compliance costs. Three episodes are explored: the first bailout in May 2010, the mid-term fiscal strategy in June–July 2011 and the second bailout in February 2012. Implications are drawn for theories of delegation, intergovernmentalism and the future of EU crisis management.

Keywords

Greecesovereign debt crisiscrisis managementEconomic and Monetary Unionnormal accidents theorypolicy effectiveness
Type
Research Article
Information
Journal of Public Policy , Volume 32 , Issue 2 , August 2012 , pp. 99 - 116
Copyright
Copyright © Cambridge University Press 2012

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