Deliberate Recovery-Policy, Politics, the Economic Recovery from the International Financial Crisis

The international financial crisis and its aftermath raised fundamental issues in economics and political science. In particular the observation that some nondemocratic countries apparently were affected less severely than mature democracies leads to the uncomfortable question: Are democracies really best equipped to face economic disruption and return their economies to a sustained high growth path, or do autocratic regimes have the advantage of more effective policy tools due to fewer political restrictions? In this essay, we provide a theoretical framework and large cross-country database that is meant to help investigate questions about the connection between political regimes and policy responses to the crisis. The database is comprised of thirty-eight developed and emerging market countries for which a consistent set of turning points were calculated to date the start and end of the international financial crisis, as well as related measures to quantify the qualitative features of the recession and subsequent recovery. These results are connected to measures of fiscal and monetary policy interventions in the sample countries.