Financially engineering a “self-generative” political economy of creditworthiness: expertocratic exemption problems for sustainable debt and democracy

Bartholomew Paudyn

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Repeated crises have proven credit rating agency (CRA) models/methods erroneous and “business-as-usual” unsustainable. Nevertheless, considerable dubious “default risk” management and technoscientific capitalist expertise remain unchanged. Unpacking sovereign ratings, we appreciate how “debt sustainability analysis” (DSA) distortions underpin expertocratic CRA (default) anomaly. Their neoliberal “politics of limits” performance helps market (shareholder) imperatives trump those of democratic (stakeholder) politics. Given surging inflation and debt (distress) to remedy Covid-19-induced shocks, ratings aid constitute and (re)validate the subjectivities/affinities and organizational conditions advancing a “self-equilibrating,” “self-generative” agencement political economy of creditworthiness (PEC). Antagonizing sustainable budgetary government’s programmatic/expertocratic and operational/democratic asymmetry, econophysics ratings diminish fiscal sovereignty. Universal PEC management through hybrid credit risk/uncertainty qualculation mitigates negative externality contestation shielding CRAs from serious reform. Ratings procyclicality and contagion reinforce this precarious sociotechnical agencement PEC as the status quo.

Keywords: credit ratings; democracy; expertocracy; risk/uncertainty management; sovereign debt (search for similar items in EconPapers)
JEL-codes: F3 G3 J1 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2023-04-01
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Published in Competition and Change, 1, April, 2023, 27(2), pp. 354 - 379. ISSN: 1024-5294

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