Gordon Unbound: The Heresthetic of Central Bank Independence in Britain

Sebastián Dellepiane Avellaneda
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Sebastián Dellepiane Avellaneda: Institute of Development Policy and Management, University of Antwerp

No 201052, Working Papers from Geary Institute, University College Dublin

Abstract: This article combines theory and historical narratives 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 decision to rewrite the British monetary constitution in May 1997 constituted an act of political manipulation in a Rikerian sense. The institutional change involved can be conceptualized as a heresthetic move, that is, structuring the process of the political game so you can win. The incoming government removed a difficult issue from the realm of party politics in order to signal competence and enforce internal discipline in the context of a government that was moving toward the right. But building on Elster’s constraint theory, the paper argues that the institutional reform was not a case of self-binding in an intentional sense. Rather, Brown adopted a precommitment strategy that was aimed at binding others, including members of his government. The reform had dual consequences: it was not only constraining, it was also enabling. The institutionalization of discipline enabled New Labour to achieve key economic and political goals. By revisiting the political rationality of precommitment, this paper questions the dominant credibility story underlying the choice of monetary and fiscal institutions.

Pages: 43 pages
Date: 2010-12-16
New Economics Papers: this item is included in nep-cba, nep-his, nep-hpe and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:ucd:wpaper:201052

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