Explaining Political Leadership: Germany’s Role in Shaping the Fiscal Compact

This paper explores the origins and the impact of political leadership: Why and how do political leaders emerge? And, once in charge, how do these leaders influence outcomes? What determines their success or failure? In order to answer these questions, the paper presents a theory of political leadership which takes into account both the structural and the behavioral aspects of the concept. More precisely, it argues that the emergence and the impact of leadership represent two different analytical steps. A leader emerges if there is a supply of and demand for leadership. While the supply depends on a leader’s expected benefits, the demand is determined by the followers’ status quo costs. Both demand and supply are also influenced by the relevant institutions’ capacity to manage situational challenges. The second step, in contrast, concerns a leader’s impact. Since leadership as a process consists in the use of strategies, there can be an impact only if the intensity of the strategies employed by the leader is greater than the intensity of the strategies required by the situational circumstances. While a leader’s capacity to employ strategies is determined by the material, institutional and ‘soft’ power resources at disposal, the intensity of strategies actually needed to influence outcomes depends on the heterogeneity of preferences and on the adaptability of the institutional setting to be changed. The theory is applied within the scope of the current Euro-crisis by conducting a qualitative analysis of Germany’s role in shaping the European Fiscal Compact. Although the empirical findings corroborate the theory, the case study reveals that further comparative research on political leadership is needed.