Armin Schäfer is a researcher at the Max Planck Institute for the Study of Societies in Cologne, Germany. Wolfgang Streeck is Managing Director at the Max Planck Institute for the Study of Societies in Cologne, Germany.

• Contributors vii1 Introduction: Politics in the Age of Austerity 1Armin Schäfer and Wolfgang Streeck2 Public Finance and the Decline of State Capacity in Democratic Capitalism 26Wolfgang Streeck and Daniel Mertens3 Tax Competition and Fiscal Democracy 59Philipp Genschel and Peter Schwarz4 Governing as an Engineering Problem: The Political Economy of Swedish Success 84Sven Steinmo5 Monetary Union, Fiscal Crisis and the Disabling of Democratic Accountability 108Fritz W. Scharpf6 Smaghi versus the Parties: Representative Government and Institutional Constraints 143Peter Mair7 Liberalization, Inequality and Democracy’s Discontent 169Armin Schäfer8 Participatory Inequality in the Austerity State: A Supply-Side Approach 196Claus Offe9 From Markets versus States to Corporations versus Civil Society? 219Colin Crouch10 The Normalization of the Right in Post-Security Europe 239Mabel Berezin11 The Crisis in Context: Democratic Capitalism and its Contradictions 262Wolfgang StreeckNotes 287Index 303

"Poses (very well) the questions that will shape our world for many years to come."European Voice "Nothing less than a novel, comprehensive and syncretic analysis of what has changed in the relationship between capitalism and democracy over the past thirty years - and into the future."Philippe C. Schmitter, European University Institute "Insightful and engaging, the essays in this volume cover a remarkably wide range of topics related to the fundamental question of our time: what happens to democracy when governments have so little fiscal room to manoeuvre? A great read that will inspire new thinking and research."Jonus Pontusson, University of Geneva "Politics in the Age of Austerity is a hugely important contribution to the contemporary literature on the political economy of the advanced capitalist countries. Featuring a series of penetrating essays by some of the field’s foremost theorists, the book offers a powerful – and sobering – picture of the dilemmas and constraints that governments face as they seek to reconcile the increasingly conflicting demands of two constituencies – voters and 'the markets'. As such, it sheds new light on the enduring question of the evolving relationship between democracy and capitalism."Kathleen Thelen, MIT