When the Lenders Leave Town: Veto Players, Electoral Calculations and Vested Interests as Determinants of Policy Reversals in Spain and Portugal

ABSTRACT This article aims to identify the resilience of measures adopted during bailout programmes, and the conditions under which decisions-makers reverse them. Focusing on Spain and Portugal (2014–2019), we calculated that almost half (46 per cent) of the most important measures adopted during the programmes were reversed in the five years following the bailouts. We also show that left-wing parties reversed more than right wing and that the bulk of structural reforms remained unchanged. Using crisp-set qualitative-comparative analysis (QCA), we find that business interests, veto players’ preferences and governments’ electoral calculations are determinants of reversals.