Governing public credit creation

Leah Downey

New Political Economy, 2023, vol. 28, issue 1, 42-56

Abstract: Public credit programmes – the state provision of direct loans or loan guarantees – are difficult to govern. The dominant approach to governing public credit provision involves estimating the cost of public credit programmes and including these estimated costs in the budget process. This, I argue, is a mistake. The legislature uses the budget to make informed decisions about which programmes to fund and not fund. Conventional budgetary accounting, however, is technically incompatible with credit – regardless of the cost estimation procedure adopted. Consequently, using the budget to govern the public provision of credit results in the legislature making choices about what to fund and not fund based on an incomplete and inaccurate picture of the state’s fiscal capacity and the existing resource allocation. Instead, legislatures should govern the public provision of credit using an experimentalist architecture that controls credit provision through the regular reassessment of outcomes.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13563467.2022.2061437 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:cnpexx:v:28:y:2023:i:1:p:42-56

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/cnpe20

DOI: 10.1080/13563467.2022.2061437

Access Statistics for this article

New Political Economy is currently edited by Professor Colin Hay

More articles in New Political Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().