Policy Responses to the Financial Crisis: a Comparative Analysis

The present paper compares between the ways in which different countries reacted to the constraints and effects of the economic and financial crisis that begun in 2008. The paper analyzes the ways in which the different countries’ institutional framework differently affects both the capacity of response and the quality of the adopted policies. The paper compares between countries in South America (Argentina, Brasil, Chile and Colombia) and OECD countries (Spain, Ireland, UK and Israel), countries which represent a broad range both concerning the degree in which they were affected by the crisis and also concerning the kinds of policies they implemented. The paper begins by analyzing two kinds of measures: fiscal policy (taxation, state’s infrastructure and social expenditure); and institutional reforms that modify the interaction between the different state agents that must cope with the crisis. The paper analyses those policies according to four criteria: degree of adaptability, coordination and coherency, quality of implementation and effects on inequality. In its second section the paper asks about the kind of relationship between the types of response to the crisis and the countries’ institutional characteristics. Thirdly, the paper asks whether, and in which cases, the adopted policies imply a challenge to the neo-liberal market paradigm.