Technocratic economic governance and the politics of UK fiscal rules

Abstract

This exploration of UK fiscal rules and the establishment of an independent UK fiscal watchdog focuses on the practical enactment of rules-based fiscal policy to analyse the politics of technocratic economic governance. Analysing UK macroeconomic policy rules and their operation unearths numerous dimensions of the politics of technocratic fiscal policy-making. Firstly, policy rules are marshalled for partisan purposes. Secondly, a politics of economic ideas surrounds the invention, revision and interpretation of fiscal rules. Thirdly, technocratic economic governance entails a ‘politics of method’, selecting methodological approaches necessarily built on particular political economic assumptions. Finally, a ‘politics of numbers’ sees politicians cooking the books to present their economic record favourably against fiscal yardsticks. Successive governments have altered UK fiscal rules, informed by different political economic principles. The Office for Budget Responsibility (OBR) sees itself as a technocratic and apolitical institution, yet its operational work entails contrasting accounts of the economy and policy. The scale of discretion and judgement inherent in operating fiscal rules is under-appreciated. This article finds technocratic economic governance to be a much more social and political process than many advocates of economic rules-based policy acknowledge. It engenders new forms of distinctive fiscal politics within elite statecraft and expert technocracy.

Labour, more or less? Policy reasoning in a fiscal register

“…Fiscal rules are inescapably performative and communicative (Clift, 2023): the political goal is to look and sound tough while maintaining some freedom of action. Reeves' (2022) pledge to maintain 'iron-clad discipline' in borrowing only to invest and reducing the debt/GDP ratio should be seen in that light.…”

“…As Arthur Greenwood (1943) put it in the House of Commons debate on the Beveridge Report, wartime experience seemed to show that ‘pounds, shillings and pence’ were just ‘meaningless symbols’: ‘real wealth’ was ‘the production of organisation, executive ability and manual labour’. The fact that key fiscal policy metrics such as the Public Sector Borrowing Requirement are socially constructed (Clift, 2023; Labarca, 2022) naturally plays into this line of argument. In the early 1990s, for instance, Margaret Beckett had to warn shadow ministers not to ‘indulge in exercises redefining the PSBR so as to be of benefit [to] their particular areas’ (Labour Party, 1992).…”

British politics symposium on Ben Clift (2022) the OBR and the politics of technocratic economic governance (Oxford University Press)

“…That is, technocrats respond to political and environmental pressures first, and only then engage in learning as a post hoc rationalisation for their actions. To illustrate, one might point to the way in which the government has repeatedly relaxed and revised its fiscal rules since 2010 in response to economic and political imperatives (Clift 2023b). But how might we interpret evidence of experimentation and improvisation within the OBR, particularly following the Brexit and Covid shocks?…”

The Impact of Fiscal Councils on Public Perception: A Survey Experiment in the Czech Republic

“…Similarly, Clift (2023) addresses the political dimension of technocratic fiscal governance, exemplified by the UK's Office for Budget Responsibility (OBR). Clift points out that despite its goal of independent and objective fiscal oversight, the OBR's activities involve significant freedom and interpretation, inherently politicizing its work.…”