Iceland's Financial Crisis

Iceland’s Financial Crisis: The Politics of Blame, Protest, and Reconstruction has just been published by Routledge. The work, which is edited by Valur Ingimundarson, Philippe Urfalino, and Irma Erlingsdóttir, originated in an EDDA-sponsored transnational collaborative research project and the Center’s international conference In/Equalities, Democracy, and the Politics of Transition.

The edited volume deals with the political, economic, social and legal responses to the collapse of the Icelandic financial system in 2008. Interdisciplinary, with contributions from historians, economists, sociologists, legal scholars, political scientists, and philosophers, the book also compares and contrasts the Icelandic experience with other national and global crises. It examines the economic magnitude of the crisis, the social and political responses, and the transitional justice mechanisms used to deal with it. It studies both backward-looking elements, including a societal and legal reckoning—which included the indictment of a prime minister and jailing of leading bankers for their part in the financial crisis—and forward-looking features, such as an attempt to rewrite the Icelandic constitution. Throughout, it underscores the contemporary relevance of the Icelandic case. While the Icelandic economic recovery has been much quicker than expected, it shows that public faith in political elites has not been restored.

The manuscript is divided into three parts: the first section focuses on economic aspects. It puts the Icelandic financial crisis into a historical international framework, analyses the relationship between political and business interests in Iceland, and explores the boom and bust cycles of Iceland’s economy. The second section engages the political and societal responses to the banking collapse, with emphasis on the role of protest movements, on the restorative and retributive mechanisms used to deal with financial crash, and on questions of political practices and accountability in Iceland. The third part is a case study on the constitutional-writing process in Iceland, which was an attempt to achieve “democratic renewal” and to restore political legitimacy after a societal trauma.


Table of Contents



Valur Ingimundarson, Philippe Urfalino, and Irma Erlingsdóttir


Part I: The Road to Economic Disaster


  1. Iceland’s Financial Crisis: An Economic Perspective

Gylfi Zoega


  1. The Rise and Fall of a Financial Empire: Looking at the Banking Collapse from the Inside Out

Gudrun Johnsen


  1. The Political Economy of Iceland’s Boom and Bust

Stefán Ólafsson


Part II: The Political and Societal Responses to the Crisis


  1. Political Opportunity, Framing, and Mobilization in Iceland’s Post-Crash Protests

Jón Gunnar Bernburg and Anna Soffía Víkingsdóttir


  1. Contentious Politics, Political Expediency, and the Real Costs of the Icesave Debt

Helga Kristín Hallgrímsdóttir and Emmanuel Brunet-Jailly


  1. Democratic Practices, Governance, and the Financial Crash

Vilhjálmur Árnason


  1. The Politics of Transition, Memory, and Justice: Assigning Blame for the Crisis

Valur Ingimundarson


  1. The Strategy of Redistribution: Iceland’s Way Out of the Crisis

Stefán Ólafsson


Part III: The Politics of Iceland’s Constitutional Reform


  1. Icelandic Constitution-Making in Comparative Perspective

Jon Elster


  1. Constitution on Ice

Thorvaldur Gylfason


  1. Constitutional Revision: A Weak Legislative Framework Compounded by Political Disputes

Salvör Nordal


  1. Constituent Power and Authorization: Anatomy and Failure of a Constitution-Making Process

Pasquale Pasquino


  1. The Constitutional Council: Objectives and Shortcomings of an Innovative Process

Björg Thorarensen


  1. The Constituent Assembly: A Study in Failure

Jón Ólafsson