‘The EU only gets and keeps the institutions that its powerful member states want’.
This quote from a recent article of mine sums up one part of what my research points toward. It says nothing about what member states want, however. Beyond the practical realities of researching financial markets, I am a student of decision-making psychology.
I received a classic education in rational choice, but became convinced early on that ideas matter very greatly to determining what governments demand, and what they can get away with. My work currently is very concrete, looking at the global and European responses to the financial crisis, but I am also exploiting this singular opportunity to see how ideas, combined with power, shape what we want and the outcomes we get. I am particularly interested in those ideas that reflect the instincts of decision-makers.
‘Instincts are not vague and indefinite by nature, but are specifically formed motive forces which, long before there is any consciousness, and in spite of any degree of consciousness later on, pursue their inherent goals’. (C.G. Jung, The Archetypes and the Collective Unconscious, Princeton University Press, 1969, p.41).
Since the financial crisis started, rational choice modelling has been damaged heavily as the dominant approach in economics and public policy, allowing room for those focused on institutional, cultural and behavioural theories of decision-making. My work on analytical psychology and collective decision-making looks at the role that agreement or disagreement on archetypal narratives play in deciding institutional development and policy outcomes, at the European and global levels. The institutions you get, if you get them at all, depend not only on power, but on whether the decision makers hold the same interpretation of the situation in which they find themselves, and of the roles that they must play from that point forward. These narratives can underpin policy choices in time of uncertainty and a working division of labour (specialisation) across important political actors. These are all factors that rational choice deals with insufficiently.
I cut my academic teeth studying monetary union in Europe as rules were being refined in the 1990s. My first book (Reshaping Economic and Monetary Union) looked at the budget politics of Germany, France and Spain in the context of debates over European budget rules. I argued there that national politics would continue to be more important than EU rules in the future. I am taking up the topic again in the context of the current euro debt crisis. The analysis is dealing with history in the making, and will appear as my next, third book: The Economic Constitution of Europe. It will make sense of how the crisis has changed what the EU is all about.
My second book (below) looked at financial market regulation in Germany and the UK, and how it affected three kinds of regulation in the EU: of companies, of securities markets, and of accounting standards. It is where I first refined how we understand norms as the ideas we live by, both consciously and subconsciously, and showed how they drove European integration and governance. Those findings have proven to be extremely important in the current crisis, as Europe’s financial market regulation remains fragmented. This book, and articles based on it, explains why that will persist.