Who Adjusts?

by Simmons, Beth A.

• ISBN13: 9780691086415
• ISBN10: 0691086419
• Format: Hardcover
• Copyright: 1994-02-01
• Publisher: Princeton Univ Pr

Summary

In this work Beth Simmons presents a fresh view of why governments decided to abide by or defect from the gold standard during the 1920s and 1930s. Previous studies of the spread of the Great Depression have emphasized "tit-for-tat" currency and tariff manipulation and a subsequent cycle of destructive competition. Simmons, on the other hand, analyzes the influence of domestic politics on national responses to the international economy. In so doing, she powerfully confirms that different political regimes choose different economic adjustment strategies.
Using cross-sectional time series data and four cases, Simmons offers a profile of the domestic politics and institutions associated with capital flight, current account deficit, currency devaluation, and tariff protection - all of which were inconsistent with the demands of remaining on gold. She demonstrates that capital flight and current account deficits stemmed largely from governmental failure to develop credible anti-inflationary policies. In turn, decisions to externalize the subsequent deficits, whether through high tariffs or devaluation, were also driven by domestic political conditions. Who Adjusts? thus moves beyond systemic theories of international political economy, adding a new dimension to the study of the interwar situation.

Author Biography

Beth A. Simmons is Assistant Professor of Political Science at Duke University.

Table of Contents

List of Figures	p. ix
List of Tables	p. xi
Acknowledgments	p. xiii
Introduction	p. 3
The Problem: Explaining International Economic Relations during the Interwar Years	p. 4
The Argument of This Book	p. 11
Toward an Explanation of the Policy Mix: Methodology and Organization	p. 13
Findings	p. 18
The Interwar Gold Standard	p. 20
The Prewar and Interwar Gold Standards	p. 20
The Norms of Gold Standard Adjustment	p. 31
Explaining Policy Choice during the Interwar Years	p. 42
Conclusions	p. 50
The Determinants of External Imbalance	p. 52
Politics, Credibility, and External Imbalance	p. 52
Capital Movements	p. 64
The Current Account	p. 84
Conclusions	p. 101
Appendix	p. 104
Devaluation	p. 106
Descriptive Statistics: Currency Depreciation	p. 107
On Gold or Off?	p. 112
Explaining Currency Depreciation	p. 118
Domestic Politics and Currency Depreciation: The Evidence	p. 125
Conclusions	p. 136
Cumulative Results	p. 138
France, 1924-1927	p. 140
The Real Economy	p. 145
Cracks in Credibility	p. 149
From a Crack to a Gulf: January 1925-July 1926	p. 156
The Politics of Credibility	p. 164
Conclusions	p. 168
Tariff Protection	p. 174
Descriptive Statistics of Tariff Protection	p. 175
Explaining Tariff Levels	p. 178
Changes in Tariff Policy	p. 191
Conclusions	p. 212
Cumulative Results	p. 214
Appendix	p. 217
Deficits during Depression: Britain, Belgium, and France in the Thirties	p. 219
Aggregate Introduction to the Cases and to the Policy Mix	p. 223
The Case of Britain, 1929-1931	p. 226
The Case of Belgium, 1934-1936	p. 241
The Case of France, 1935-1937	p. 256
Conclusions	p. 270
Conclusions	p. 275
The Argument	p. 276
Major Findings	p. 278
Implications for International Cooperation	p. 282
Implications for International Political Economy	p. 283
Parting Words	p. 286
General Data Appendix	p. 289
Central Bank Independence Data	p. 299
Select Bibliography	p. 305
Index	p. 319
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