The 2010-12 European banking crisis triggered severe recessions, job losses, and austerity measures. In response, member states delegated some bank-supervision authority to the European Union (EU). We argue that blame for a taxpayer-funded bank rescue can be shifted from the government to the EU, especially from Left-wing governments, and especially by Eurosceptic citizens. We also argue that blame shifting cannot take place where the public does not attribute blame to the government for bank rescue in the first place, which is the case for net recipients of taxpayer-funded bank rescues, the well informed, those who trust banks, and ideological supporters of the party in government (in group bias). We test these arguments using a conjoint survey experiment with 1,724 participants in Germany. We find that a hypothetical taxpayer-funded bank rescue reduces support for governing parties by 18 percent on average, but that this effect is mitigated by 11 percent on average if the EU is involved in bank-supervision. Our contribution to the literatures on retrospective and economic voting, and blame avoidance, is threefold: (1) we use experimental design to separate blame attribution from blame shifting, studying the potential for blame shifting (citizens’ behavior, not government action); (2) we control for blame attribution to, and shifting from non-government; (3) we demonstrate that banking failures in particular can change citizens’ political behavior, and that banking failures can politicize bank supervision by the public, even if in normal times it may seem as too technical for citizens to grasp. Our findings provide important insights into the potential for international organizations (IO) to offer blame avoidance opportunities for national governments.
Moderator: Stephen Chaudoin