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Long before the epicenter of the financial crisis shifted to the European Union (EU), ���ϳԹ��� political scientist Elliot Posner had been studying the region’s financial arrangements and their international effects. This year, as an EU Affairs Fulbright Research Scholar, Posner is using his previous work to understand EU, transatlantic and international responses to the crisis—and efforts to prevent another one. Posner, an associate professor of political science, is based in Paris for the 2011-12 academic year. He is affiliated with two organizations, Sciences Po’s European Studies Center (Centre d’études européennes) and Bruegel, a Brussels-based think tank, while also participating in a group research project at the University of Amsterdam. “A basic premise of my research is that economic exchange requires a complex set of legal, political, administrative and social foundations,” Posner said. “Inside countries, governments and the state apparatus tend to be the providers.” His research explores questions about economic activity across national frontiers: What are the foundations for cross-border commerce and finance? Where do they come from? Whose interests do the rules promote? “These kinds of questions have led scholars in my field to look at state-to-state cooperation (as in the International Monetary Fund), the role of powerful polities (like the U.S. and the European Union), multinational corporate lobbies, and regulatory networks,” Posner said. Posner became interested in international finance during the dot-com boom of the late 1990s. As a graduate student in the Bay Area, he watched countries around the world copy U.S. financial arrangements. His research resulted in The Origins of Europe's New Stock Markets (Harvard University Press, 2009), which focuses on efforts to imitate the Nasdaq stock market. “I thought it was surprising and inherently interesting that the French and Germans would want to emulate icons of U.S.-style capitalism like the Nasdaq and the venture capital industry.” Since 2004, Posner’s research has centered on EU efforts to overhaul its financial system and the consequences for banks, exchanges, insurance companies, investors and regulators in the United States and abroad. “My research helps us understand why we ended up with the international arrangements we had in the decade before the current crisis,” he said. “A big part of the story is that the EU, for largely internal reasons, adopted a financial regulatory framework quite similar to the one in the U.S.” Between 2000 and 2008, when European policy makers found themselves in a position to challenge the U.S. approach to financial regulation, they opted instead for transatlantic rules that helped financial services firms operate more easily across borders, Posner reported. “My research this year is helping to explain surprising levels of international coordination. With the failure of financial systems, we might have predicted countries would go their own ways.” Some of this openness to cooperation he attributes to the European Union. “Over the last half century,” he said, “scholars have observed how Europeans built the foundations for cross-border economic and financial activity.” A historical lens for understanding the EU has given Posner a fresh perspective on today’s international economy. He pointed to examples from his research that show how efforts to cooperate, even if modest or ineffective, create constraints and possibilities for leaders 10 and 20 years later. “We certainly see this in the financial crisis and its aftermath. Think about the flawed setup of the eurozone that can be traced to decisions made in the early 1990s. “On a more positive note, EU leaders have come up with very creative new agencies for improving financial supervision,” Posner said. “Europe is an amazing laboratory for political and economic innovation.”