Tangled Governance ─ International Regime Complexity, the Troika, and the Euro Crisis

Tangled Governance addresses the institutions that were deployed to fight the euro crisis, re-establish financial stability, and prevent contagion beyond Europe. The author addresses why European leaders chose to include the IMF and provides a detailed account of the decisions of the institutions that make up the 'Troika' (the European Commission, ECB, and IMF). He explains the institutions' negotiating strategies, the outcomes of their interaction, and the effectiveness of their cooperation. The book also explores the strategies of the member states, including Germany and the United States, with respect to the institutions and the advantages they sought in directing them to work together.

The book locates the analysis within the framework of regime complexity, clusters of overlapping and intersecting regional and multilateral institutions. It tests conjectures spawned by that literature against the seven cases of financial rescues of euro area countries that were stricken by crisis during 2010-2015. Tangled Governance concludes that regime complexity is the consequence of a strategy by key states to control 'agency drift'. States mediate conflicts among institutions, through informal as well as formal mechanisms, and thereby limit fragmentation of the regime complex and underpin substantive efficacy. In so doing, the book answers several key puzzles, including why (a) Germany and other Northern European countries supported IMF inclusion despite substantive positions opposed to their economic preferences, (b) crisis-fighting arrangements endured intense conflicts among the institutions, and (c) the United States and the IMF promoted further steps to 'complete' the monetary union.

C. Randall Henning, Professor of International Economic Relations, School of International Service, American University, Washington D.C.

C. Randall Henning is Professor of International Economic Relations in the School of International Service at American University in Washington, D.C. He specializes in International Political Economy, Global Governance, and regional integration, especially with respect to Europe and East Asia. Europe's monetary union and the interaction among regional and multilateral institutions are topics of special focus. The author of numerous books and journal articles, he has written most recently on emerging-market perspectives on the Group of Twenty (G20) and international financial institutions, regional financial facilities, and the lessons for Europe from fiscal federalism in the United States.