In a world of increasing austerity measures, democratic politics comes under pressure. With the need to consolidate budgets and to accommodate financial markets, the responsiveness of governments to voters declines. However, democracy depends on choice. Citizens must be able to influence the course of government through elections and if a change in government cannot translate into different policies, democracy is incapacitated. Many mature democracies are approaching this situation as they confront fiscal crisis. For almost three decades, OECD countries have - in fits and starts - run deficits and accumulated debt. As a result, an ever smaller part of government revenue is available today for discretionary spending and social investment and whichever party comes into office will find its hands tied by past decisions. The current financial and fiscal crisis has exacerbated the long-term shrinking government discretion; projects for political change have lost credibility. Many citizens are aware of this situation: they turn away from party politics and stay at home on Election Day. With contributions from leading scholars in the forefront of sociology, politics and economics, this timely book will be of great interest to students and scholars throughout the social sciences as well as general readers.

In a world of increasing austerity measures, democratic politics comes under pressure. With the need to consolidate budgets and to accommodate financial markets, the responsiveness of governments to voters declines. However, democracy depends on choice. Citizens must be able to influence the course of government through elections and if a change in government cannot translate into different policies, democracy is incapacitated.Many mature democracies are approaching this situation as they confront fiscal crisis. For almost three decades, OECD countries have - in fits and starts - run deficits and accumulated debt. As a result, an ever smaller part of government revenue is available today for discretionary spending and social investment and whichever party comes into office will find its hands tied by past decisions. The current financial and fiscal crisis has exacerbated the long-term shrinking government discretion; projects for political change have lost credibility. Many citizens are aware of this situation: they turn away from party politics and stay at home on Election Day.With contributions from leading scholars in the forefront of sociology, politics and economics, this timely book will be of great interest to students and scholars throughout the social sciences as well as general readers.

Contributors vii1 Introduction: Politics in the Age of Austerity 1Armin Schäfer and Wolfgang Streeck2 Public Finance and the Decline of State Capacity in DemocraticCapitalism 26Wolfgang Streeck and Daniel Mertens3 Tax Competition and Fiscal Democracy 59Philipp Genschel and Peter Schwarz4 Governing as an Engineering Problem: The Political Economy ofSwedish Success 84Sven Steinmo5 Monetary Union, Fiscal Crisis and the Disabling of DemocraticAccountability 108Fritz W. Scharpf6 Smaghi versus the Parties: Representative Government andInstitutional Constraints 143Peter Mair7 Liberalization, Inequality and Democracy's Discontent169Armin Schäfer8 Participatory Inequality in the Austerity State: A Supply-SideApproach 196Claus Offe9 From Markets versus States to Corporations versus CivilSociety? 219Colin Crouch10 The Normalization of the Right in Post-Security Europe239Mabel Berezin11 The Crisis in Context: Democratic Capitalism and itsContradictions 262Wolfgang StreeckNotes 287Index 303