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This chapter begins with a discussion of the classic theories of fiscal federalism from economics, and it compares the European Union with fiscal federalism in the United States. The US federal government has fiscal capacity but it does not regulate fiscal conduct at the state level. The EU, by contrast, has little fiscal capacity but it does regulate the fiscal conduct of the member states. After the financial crisis that began in 2008, multiple veto players in the EU left it in a reactive mode. There was still some regulatory change because the two most important states in the Union, France and Germany, can become the crucial agenda setters for reform. The US federal government, in contrast, did not try to regulate the states during the crisis, but it did successfully increase further its fiscal capacity

This chapter aims to add to the literature on welfare retrenchment by consolidating prospect theoretical, party competition and veto player explanations into one framework of analysis. It tests this framework against comparative historical evidence of four Western European democracies, namely Denmark, France, Germany and the Netherlands. It suggests answers to the questions ‘why’, ‘when’ and ‘how’ policymakers engage in welfare retrenchment are indeed best considered jointly: looking at the ‘why’ question through ‘losses domains’ enables us to identify governments that are more likely to engage in “treacherous” welfare retrenchment, but falls short of telling us much about possible stumbling blocks to reform in political systems with multiple constitutional constraints. Considering party competition and particularly the strength of Left parties helps us to understand ‘when’ policymakers are likely to engage in unpopular welfare retrenchment, but fails to illuminate ‘how’ – or the mechanisms through which – welfare retrenchments are achieved, namely consensus seeking.

This chapter analyses the change (or continuity) of MENA regimes in a post-Arab Spring context, focusing on governments and power relationships. This chapter firstly analyses the place governments occupy in their respective political systems; how they are perceived by their populations; and the extent to which are they capable of managing violence and imposing their authority across the whole of their national territory. Governments are responsible for the policies carried out in their countries. Thus, many of the social protests - predominantly focused on the high levels of corruption - were directed against governments. However, while governments are perceived to be the institutions responsible for meeting citizens’ welfare needs, there are other non-elected institutions (formal or informal) with significant decision-making powers that are non-accountable, such as the presidents of the republic, the monarchs, and other national (the armed forces in the case of Egypt; armed groups in the cases of Libya, Syria and Yemen) or international actors (such as Saudi Arabia and Iran). On the other hand, this chapter studies changes in the power structure. The author finds evidence of greater power concentration, with the exception of the new democratic regime of Tunisia.