Gordon Unbound: The Heresthetic of Central Bank Independence in Britain

Abstract

<jats:p>This article combines theory and narrative to shed new light on the politics surrounding the making of central bank independence in contemporary Britain. Its central argument is that Gordon Brown's rewriting of the British monetary constitution in May 1997 constituted political manipulation in a Rikerian sense. The government removed a contentious issue from party politics in order to signal competence and enforce internal discipline. Building on Elster's constraint theory, the paper argues that Brown adopted a pre-commitment strategy aimed at binding others. The heresthetic move had dual consequences, both constraining and enabling. The institutionalization of discipline enabled New Labour to achieve economic and political goals. By revisiting the political rationality of precommitment, this article questions the dominant credibility story underlying the choice of economic institutions.</jats:p>

When, why and how institutional change takes place: a systematic review and a future research agenda on the importance of policy entrepreneurship in macroeconomic bureaucracies

“…Only one article adopts rational choice institutionalism, assuming that the institutional change is a rational response by politicians who are shaped by their perceptions about other significant political actors' material preferences and powers (Bernhard, 1998). In addition to these studies, which mostly adopt one variant of institutional perspectives, 11 articles combine two or more varieties of institutionalisms and offer broader analytical frameworks (Bakir, 2009a;Dellepiane-Avellaneda, 2013;Epstein, 2006;Johnson, 2006;King, 2005;Maman & Rosenhek, 2009, 2012McNamara, 2002;Patel, 2009;Quaglia, 2005aQuaglia, , 2005b. These studies highlight the significant role of policy entrepreneurs and/or ideational entrepreneurs who utilise strong ideas in domestic policy-making processes to deliver reform outcomes.…”

To Democratize Finance, Democratize Central Banking

“…To "the markets," CBI underscored New Labour's rejection of radical policies, but the specter of bank-rate rises was also meant to ensure that fiscal conservatives would have the whip hand in internal party disagreements. 40 Later, when the Conservative-led coalition government took over in 2010, predeflationary economic conditions meant that the Bank of England's inflation target required expansionary policy; this allowed the Tories to implement their preference for austerity secure in the knowledge that the central bank would mitigate some of the economic impact. 41 Given low world interest rates that reduce the prospective borrowing cost consequences of a reversal of CBI, and Labour's ambition to reverse austerity, resubordination of the Bank of England to the Treasury is a real prospect should the party return to power.…”

Historical Institutionalism and New Dimensions of Agency: Bankers, Institutions and the 2008 Financial Crisis

“…Because agents operate simultaneously in multiple institutional contexts (Lieberman, 2002; Schneiberg, 2007), it is also true that change in one arena might be designed to secure greater predictability and stability in other institutional arenas. This is a finding of Sebastian Dellepiane-Avellandea (2012: 283), who argues that Gordon Brown’s move in 1997 to give the Bank of England independence was at one level a big step, but at another, wider level, it was aimed at ‘stability, rules, discipline and prudence’ through controlling inflation, appeasing markets, constraining opponents and off-loading difficult responsibilities.…”