Explaining variations in bailout policies: A review of Cornelia woll's the power of inaction

Abstract

In The Power of Inaction: Bank Bailouts in Comparison, Professor Cornelia Woll asks a question of fundamental importance: “What was the nature of power finance wielded over the fate of the economy and the crisis management in 2008, which affected the lives of so many?”1 To measure the effective power that the financial industry wielded during the crisis, Woll compares the terms of bailout packages that governments adopted in six countries in the aftermath of the 2008 financial crisis. She contends that financial institutions were more likely to receive larger amounts of public support, and to make minimal contributions to rescue plans, in nations where the financial industry's influence satisfied three important factors.