When are policy makers willing to make costly adjustments to their macroeconomic policies to mitigate balance-of-payments problems? Which types of adjustment strategies do they choose? Under what circumstances do they delay reform, and when are such delays likely to result in financial crises? To answer these questions, this book examines how macroeconomic policy adjustments affect individual voters in financially open economies and argues that the anticipation of these distributional effects influences policy makers' decisions about the timing and the type of reform. Empirically, the book combines analyses of cross-national survey data of voters' and firms' policy evaluations with comparative case studies of national policy responses to the Asian Financial Crisis of 1997/8 and the recent Global Financial Crisis in Eastern Europe. The book shows that variation in policy makers' willingness to implement reform can be traced back to differences in the vulnerability profiles of their countries' electorates.

Puts voters at the center of the analysis and provides a microfoundation for voters' policy preferences about the type and timing of economic reform

First book to analyze the political consequences of the increase in private borrowing in foreign currencies

Provides a theoretically guided analysis of the two most important recent crisis episodes: the Asian financial crisis of 1997/8 and the current global crisis

Stefanie Walter, Universität Zürich

Stefanie Walter is Assistant Professor for International and Comparative Political Economy in the Department of Political Science at the University of Heidelberg. Her work has been published in Economics and Politics, the European Journal of Political Research, European Political Science, International Organization, International Studies Quarterly, Politische Vierteljahresschrift, the Review of International Political Economy and World Development. She received her PhD in Political Science from ETH Zurich.