Michele Chang pays particular attention to the role of domestic elections, since these may prevent governments from credibly committing to a fixed exchange rate and from responding quickly and coherently to market instability, thus encouraging speculation.

Introduction The European Monetary System Political Economy of Currency Crisis and Devaluation France, 1981-1986 France, 1988-1995 Italy: Domestic Versus International Origins of Currency Crises Ireland Conclusion

"The financial crises of the last decade - from Latin America, to Asia and Russia - frequently had political roots. Prof. Michele Chang's careful analysis of the European integration process shows that such factors were at work there as well. In particular, she shows how elections play a powerful role in exchange rate policy. The lessons for emerging markets - where democracy is expanding - are clear and important." - Stephan Haggard, Professor, Graduate School of International Relations and Pacific Studies, University of California, San Diego "This book is a valuable contribution to the literature on currency crises, stressing the critical role of elections and political instability in determining the timing and resolution of crises. Well written and creative, the carefully structured analysis demonstrates a mastery of both empirical detail and theoretical understanding. Chang's insights offer much of interest to economists and political scientists alike." - Benjamin J. Cohen, Benjamin Jerry Cohen, Department of Political Science, University of California, Santa Barbara "In Realigning Interests, Michele Chang presents a careful analysis of the political economy of exchange rate policy. Chang uses an effective combination of statistical evidence and country studies of France, Italy, and Ireland, to demonstrate how political variables impinge upon foreign exchange markets. Realigning Interests is a valuable contribution to our understanding of the complex interaction of markets and politics, especially currency markets and electoral politics. " - Jeff Frieden, Professor of Government, Harvard University