Asset struggles and credit regimes: how dominant growth coalitions shaped credit policy and homeownership in Germany and Sweden

Political cleavages in rich democracies are increasingly characterised by struggles over different forms of asset ownership. To explain the outcomes of asset struggles and their cross-country variation, I focus on the role of producer group politics in shaping national credit policy. Producer groups display conflicting preferences regarding credit permissiveness. Easy access to mortgages and housing wealth benefits firms in the financial sector and can help parties expand electoral coalitions, but such policies can also create wage pressures that weaken the competitiveness of exporters. The (re)configuration of political support coalitions determines how this tradeoff is decided. A most-similar comparative case study of credit regulation in Germany and Sweden substantiates the argument. In Germany, an export coalition supported incremental financial liberalisation that followed a purpose-driven path in line with the preferred macroeconomic policies of the manufacturing sector. In Sweden, the financial sector defected from a rigid credit control regime and lobbied for radical financial liberalisation while incumbents lacked organisational capacity and willingness to defend the status quo. The article provides a comparative analysis of asset struggles and improves our understanding of the coalitional mechanisms that create the potential for real estate bubbles, financial crisis, and asset inequalities in rich democracies.