Gordon unbound: The heresthetic of central bank independence in Britain

British Journal of Political Science

Volumn 43, Issue 2, 2013, Pages 263-293

  Dellepiane Avellaneda, Sebastian ^a  

^a UNIVERSITY OF STRATHCLYDE   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84875185365     PISSN: 00071234     EISSN: 14692112     Source Type: Journal    
DOI: 10.1017/S0007123412000221     Document Type: Review

References (338)

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2. The Times, 7 May 1997.
3. Paul Routledge, Gordon Brown: The Biography (London: Pocket Books, 1998), p. 298.
4. The Times, 7 May 1997;
5. The Mirror, 7 May 1997.
6. Hugh Pym and Nick Kochan, Gordon Brown: The First Year in Power (London: Bloomsbury, 1998) p. 8.
7. William Keegan, The Prudence of Mr Gordon Brown (Chichester: Wiley, 2004),
8. Robert Peston, Brown's Britain (London: Short Books, 2005).
9. Financial Times, 7 May 1997.
10. John Goodman, 'The Politics of Central Bank Independence', Comparative Politics, 23 (1991), 329-30;
11. Kathleen McNamara, 'Rational Fictions: Central Bank Independence and the Social Logic of Delegation', West European Politics, 25 (2002), 47-76.
12. Michael King, 'Epistemic Communities and the Diffusion of Ideas: Central Bank Reform in the United Kingdom', West European Politics, 28 (2005), 94-123.
13. Douglass North, Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990);
14. Norman Schofield, 'Evolution of the Constitution', British Journal of Political Science, 32 (2002), 1-20.
15. Jon Elster, Ulysses and the Sirens: Studies in Rationality and Irrationality (Cambridge: Cambridge University Press, 1979).
16. Following the convention in constitutional political economy, founding fathers refer to the core group of people playing a central role in the process of institutional framing.
17. Jon Elster, Ulysses Unbound: Studies in Rationality, Precommitment and Constraints (Cambridge: Cambridge University Press, 2000).
18. Robert Bates, Avner Greif, Margaret Levi, Jean-Laurent Rosenthal and Barry Weingast, Analytic Narratives (Princeton, N.J.: Princeton University Press, 1998), p. 3.
19. Iain McLean, Rational Choice and British Politics: An Analysis of Rhetoric and Manipulation from Peel to Blair (Oxford: Oxford University Press, 2001).
20. Graham Allison and Philip Zelikow, Essence of Decision: Explaining the Cuban Missile Crisis, 2nd edn (New York: Longman, 1999).
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22. Dietrich Rueschemeyer, 'Can One or Few Cases Yield Theoretical Gains?' in James Mahoney and Dietrich Rueschemeyer, eds, Comparative Historical Analysis in the Social Sciences (Cambridge: Cambridge University Press, 2003), pp. 305-36;
23. Alexander George and Andrew Bennett, Case Studies and Theory Development in the Social Sciences (Cambridge, Mass.: MIT Press, 2005);
24. John Gerring, Case Study Research: Principles and Practices (Cambridge: Cambridge University Press, 2007).
25. William Bernhard, 'A Political Explanation of Variations in Central Bank Independence', American Political Science Review, 92 (1998), 311-28;
26. William Bernhard, Lawrence Broz and Williams Roberts Clark, eds, The Political Economy of Monetary Institutions (Cambridge, Mass.: The MIT Press, 2003);
27. Jonathan Kirshner, Monetary Orders: Ambiguous Economics, Ubiquitous Politics (Ithaca, N.Y.: Cornell University Press, 2003);
28. Bumba Mukherjee and David Singer, 'Monetary Institutions, Partisanship and Inflation Targeting', International Organization, 62 (2008), 332-58;
29. Michael Hall, 'Democracy and Floating Exchange Rates', International Political Science Review, 29 (2008), 73-98.
30. Bernhard et al., The Political Economy of Monetary Institutions, p. 28.
31. Alberto Alesina, 'Alternative Monetary Regimes: A Review Essay', Journal of Monetary Economics, 21 (1988), 175-86;
32. Alan Drazen, Political Economy in Macroeconomics (Princeton, N.J.: Princeton University Press, 2000);
33. Torsten Persson and Guido Tabellini, eds, Monetary and Fiscal Policy, Vol. 1: Credibility (Cambridge, Mass.: The MIT Press, 1994);
34. Lawrence White, The Theory of Monetary Institutions (Malden, Essex: Blackwell Publishers, 1999).
35. Finn Kydland and Edward Prescott, 'Rules Rather Than Discretion: The Inconsistency of Optimal Plans', Journal of Political Economy, 85(1977), 473-91.
36. Giandomenico Majone, 'Public Policy and Administration: Ideas, Interests and Institutions', in Robert Goodin and Hans-Dieter Klingemann, eds, A New Handbook of Political Science (Oxford: Oxford University Press, 1997), pp. 610-27.
37. Francesco Giavazzi and Marco Pagano, 'The Advantage of Tying One's Hands: EMS Discipline and Central Bank Credibility', European Economic Review, 32 (1988), 1055-82.
38. Kenneth Rogoff, 'The Optimal Degree of Commitment to an Intermediate Monetary Target', Quarterly Journal of Economics, 100 (1985), 1169-90.
39. Alex Cukierman, Central Bank Strategy, Credibility and Independence: Theory and Evidence (Cambridge, Mass.: The MIT Press, 1992);
40. Susanne Lohmann, 'Optimal Commitment in Monetary Policy: Credibility versus Flexibility', American Economic Review, 82 (1992), 273-86;
41. Alan Blinder, Central Banking in Theory and Practice (Cambridge, Mass.: The MIT Press, 1998).
42. McNamara, 'Rational Fictions'.
43. Vittorio Grilli, Donato Masciandaro and Guido Tabellini, 'Political and Monetary Institutions and Public Financial Policies in the Industrial Countries', Economic Policy, 10 (1991), 342-92;
44. Alberto Alesina and Lawrence Summers, 'Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence', Journal of Money, Credit and Banking, 25 (1993), 151-62;
45. Alberto Alesina and Roberta Gatti, 'Independent Central Banks: Low Inflation at No Cost?' American Economic Review, 85 (1995), 196-200.
46. Adam Posen, 'Declarations Are Not Enough: Financial Sector Sources of Central Bank Independence', NBER Macroeconomics Annual, 10 (1995), 253-74.
47. McNamara, 'Rational Fictions';
48. James Forder, 'Central Bank Independence: Reassessing the Measurements', Journal of Economic Issues, 33 (1999), 23-40. Other authors have found a trade-off between inflation and real variables.
49. See Guy Debelle and Stanley Fischer, 'How Independent a Central Bank Should Be?' Working Papers in Applied Economic Theory, 94-05 (Federal Reserve Bank of San Francisco, 1994);
50. Sylvester Eijffinger and Jakob De Haan, 'The Political Economy of Central-Bank Independence', Special Papers in International Economics, 19 (Department of Economics, Princeton University, 1996).
51. Allan Drazen, Political Economy in Macroeconomics (Princeton, N.J.: Princeton University Press, 2000).
52. McNamara, 'Rational Fictions', p. 7.
53. Fabrizio Gilardi, 'The Same, but Different: Central Banks, Regulatory Agencies, and the Politics of Delegation to Independent Authorities', Comparative European Politics, 5 (2007), 303-27.
54. Majone, Public Policy and Administration, p. 617.
55. Benjamin Cohen, The Geography of Money (New York: Cornell University Press, 1998).
56. Bernhard et al., The Political Economy of Monetary Institutions, p. 18.
57. Jonathan Kirshner, Monetary Orders, p. 3.
58. King Banaian, Leroy Laney and Thomas Willett, 'Central Bank Independence: An International Comparison', Economic Review (Federal Reserve Bank of Dallas, March, 1983), 1-13;
59. Arend Lijphart, Patterns of Democracy (New Haven, Conn.: Yale University Press, 1999);
60. Mark Hallerberg, 'Veto Players and the Choice of Monetary Institutions', in Bernhard et al., The Political Economy of Monetary Institutions, pp. 83-110.
61. Goodman, 'The Politics of Central Bank Independence';
62. Posen, 'Declarations Are Not Enough'.
63. Gian Maria Milesi-Ferretti, 'The Disadvantage of Tying Their Hands: On the Political Economy of Policy Commitments', Economic Journal, 105 (1995), 1381-402;
64. Geoffrey Garrett, 'Capital Mobility, Trade, and the Domestic Politics of Economic Policy', International Organization, 49 (1995), 657-87.
65. Sylvia Maxfield, Gatekeepers of Growth: The International Political Economy of Central Banking in Developing Countries (Princeton, N.J.: Princeton University Press, 1997).
66. McNamara, 'Rational Fictions', p. 61.
67. John Goodman, Monetary Sovereignty: The Politics of Central Banking in Western Europe (Ithaca, N.Y.: Cornell University Press, 1992);
68. Susanne Lohmann, 'Federalism and Central Bank Independence: The Politics of German Monetary Policy, 1957-92', World Politics, 50 (1998): 401-46;
69. Delia Boylan, 'Preemptive Strike: Central Bank Reform in Chile's Transition from Authoritarian Rule', Comparative Politics, 30 (1998), 443-62.
70. William Bernhard, Banking on Reform: Political Parties and Central Bank Independence in the Industrial Democracies (Ann Arbor: University of Michigan Press, 2002);
71. William Bernhard and David Leblang, 'Political Parties and Monetary Commitments', in Bernhard et al., The Political Economy of Monetary Institutions, pp. 111-38.
72. Cukierman, Central Bank Strategy, Credibility and Independence;
73. Elster, Ulysses Unbound.
74. Lucia Quaglia, 'An Integrative Approach to the Politics of Central Bank Independence: Lessons from Britain, Germany and Italy', West European Politics, 28 (2005), 549-68;
75. Lucia Quaglia, Central Banking Governance in the European Union: A Comparative Analysis (New York: Routledge, 2008).
76. King, 'Epistemic Communities and the Diffusion of Ideas';
77. Michael Tager, 'Central Bank Independence: A Research Note on the Case of the United Kingdom', Social Science Journal, 44 (2007), 359-66.
78. Hallerberg, 'Veto Players and the Choice of Monetary Institutions', p. 95.
79. King, 'Epistemic Communities and the Diffusion of Ideas';
80. Quaglia, 'An Integrative Approach to the Politics of Central Bank Independence';
81. Robert Elgie and Helen Thompson, The Politics of Central Banks (London: Routledge, 1998).
82. King, 'Epistemic Communities and the Diffusion of Ideas', p. 115.
83. King, 'Epistemic Communities and the Diffusion of Ideas', p. 115.
84. Of course, my point weakens but is not completely inconsistent with King's argument. As one of the reviewers rightly suggested, the reform might have been targeting long-term electoral gains.
85. According to Peston, 'the young Balls deserves as much credit-probably more-than anyone else for the creation of the modern Bank of England' (Peston, Brown's Britain, p. 118).
86. Ed Balls, Euro-Monetarism: Why Britain Was Ensnared and How It Should Escape (London: Fabian Society, 1992).
87. Peter Burnham, 'New Labour and the Politics of Depoliticisation', British Journal of Politics and International Relations, 3 (2001), 127-49.
88. Peter Burnham, 'The Politicisation of Monetary Policy-Making in Postwar Britain', British Politics, 2 (2007), 395-419;
89. Jim Buller and Matthew Flinders, 'The Domestic Origins of Depoliticisation in the Area of British Economic Policy', British Journal of Politics and International Relations, 7 (2005), 526-44.
90. Elgie and Thompson, The Politics of Central Banks.
91. King, 'Epistemic Communities and the Diffusion of Ideas', p. 113, emphasis added.
92. Similarly, mentions to the works of Schofield, Shepsle, Tsebelis and Weingast are exceptional.
93. Robert Bates, 'Contra Contractarianism: Some Reflections on the New Institutionalism', Politics & Society, 16 (1988), 387-401;
94. Randall Calvert, 'The Rational Choice Theory of Social Institutions: Cooperation, Coordination and Communication', in Jeffrey Banks and Eric Hanushek, eds, Modern Political Economy (Cambridge: Cambridge University Press, 1995), pp. 216-67.
95. Terry Moe, 'Political Institutions: The Neglected Side of the Story', Journal of Law, Economics, and Organizations, 6 (1990), 213-53, at p. 213.
96. Douglass North, 'Economic Performance through Time', American Economic Review, 84 (1994), 359-68, at p. 360.
97. Paul Pierson and Theda Skocpol, 'Historical Institutionalism in Contemporary Political Science', in Ira Katznelson and Helen Milner, eds, Political Science: The State of the Discipline (New York: Norton, 2002), pp. 693-721.
98. Jack Knight, Institutions and Social Conflict (Cambridge: Cambridge University Press, 1992).
99. Moe, 'Political Institutions'.
100. George Tsebelis, Nested Games: Rational Choice in Comparative Politics (California, University of California Press, 1990), p. 97.
101. William Riker, 'Implications from the Disequilibrium of Majority Rule for the Study of Institutions', American Political Science Review, 74 (1980), 432-46.
102. William Riker, Liberalism against Populism (Longrove, Ill.: Waveland Press, 1988).
103. Riker, Liberalism Against Populism. For an excellent account of heresthetic,
104. see Iain McLean, 'William H. Riker and the Invention of Heresthetic(s)', British Journal of Political Science, 32 (2002), 535-38.
105. Albert Weale, 'Social Choice Versus Populism: An Interpretation of Riker's Political Theory', British Journal of Political Science, 14 (1984), 369-85.
106. Schofield, 'Evolution of the Constitution'.
107. William Riker, The Art of Political Manipulation (New Haven, Conn.: Yale University Press, 1986), p. 9.
108. William Riker and David Weimer, 'The Political Economy of Transformation: Liberalization and Property Rights', in Banks and Hanushek, Modern Political Economy, pp. 80-108;
109. Norman Schofield, 'Constitutional Political Economy: On the Possibility of Combining Rational Choice Theory and Comparative Politics' (Center of Political Economy, Washington University, St. Louis, Missouri, 2000).
110. McLean, Rational Choice and British Politics.
111. Norman Frohlich, Joe Oppenheimer and Oran Young, Political Leadership and Public Goods (Princeton, N.J.: Princeton University Press, 1971);
112. Itai Sened, 'The Emergence of Individual Rights', in Jack Knight and Itai Sened, eds, Explaining Social Institutions (Michigan: The University of Michigan Press, 1995), pp. 161-89.
113. Elster, Ulysses and the Sirens;
114. Avinash Dixit and Barry Nalebuff, Thinking Strategically (New York: Norton, 1991);
115. Kenneth Shepsle, 'Discretion, Institutions and the Problem of Government Commitment', in Paul Bourdieu and James Coleman, eds, Social Theory for a Changing Society (Boulder, Colo.: Westview, 1991).
116. Giavazzi and Pagano, 'The Advantage of Tying One's Hands';
117. Milesi-Ferretti, 'The Disadvantage of Tying Their Hands';
118. Douglass North and Barry Weingast, 'Constitutions and Commitments: The Evolution of Institutions Governing Public Choice in 17th Century England', Journal of Economic History, 19 (1989), 803-32;
119. Hilton Root, 'Tying the King's Hands: Credible Commitments and Royal Fiscal Policy during the Old Regime', Rationality and Society, 1 (1989), 240-58.
120. Blinder, Central Banking in Theory and Practice, pp. 56-61, emphasis added.
121. Elster, Ulysses Unbound, p. 92, emphasis added.
122. Elster's research on constitution-making in post-communist societies might have shaped his view on this issue (Jon Elster, Claus Offe and Ulrich Preuss, Institutional Design in Post-Communist Societies: Rebuilding the Ship at Sea (Cambridge: Cambridge University Press, 1998).
123. Elster, Ulysess Unbound, pp. 276-7.
124. Stephen Holmes, 'Pre-commitment and the Paradox of Democracy', in Jon Elster and Rune Slagstad, eds, Constitutionalism and Democracy (Cambridge: Cambridge University Press, 1988), pp. 195-240, at p. 215.
125. Thomas Schelling, The Strategy of Conflict (Cambridge, Mass.: Harvard University Press, 1981), p. 22.
126. Douglass North and Barry Weingast, 'Constitutions and Commitments'.
127. Root, 'Tying the King's Hands', p. 241.
128. Wyn Grant, Economic Policy in Britain (Basingstoke, Hants.: Palgrave, 2002).
129. Andrew Gamble, The Free Economy and the Strong State: The Politics of Thatcherism (London: Macmillan, 1988);
130. Peter Hall, 'Policy Paradigms, Social Learning, and the State: The Case of Economic Policymaking in Britain', Comparative Politics, 25 (1993), 275-96.
131. Nigel Lawson, The View from No. 11 (London: Bantam Press, 1992);
132. Margaret Thatcher, The Downing Street Years (London: Harper Collins, 1993);
133. Norman Lamont, In Office (London: Little Brown, 1999);
134. John Major, The Autobiography (London: Harper Collins, 1999);
135. Philip Stephens, Politics and the Pound (London: Macmillan, 1996).
136. Hall, 'Policy Paradigms, Social Learning, and the State', p. 283.
137. This argument draws from Sandholtz's brilliant analysis of Maastricht. See Wayne Sandholtz, 'Choosing Union: Monetary Politics and Maastricht', International Organization, 47 (1993), 1-39.
138. See Lawson, The View from No. 11;
139. Grant, Economic Policy in Britain.
140. Ed Balls, 'Delivering Economic Stability' (Speech by the Chief Economic Advisor to the Treasury to the Oxford Business Alumni Annual Lecture, 12 June 2001);
141. Ed Balls and Gus O'Donnell, Reforming Britain's Economic and Financial Policy (London: Palgrave, 2002).
142. Mark Wickham-Jones, Economic Strategy and the Labour Party (Basingstoke, Hants.: Macmillan, 1996);
143. Mark Wickham-Jones, 'New Labour in the Global Economy: Partisan Politics and the Social Democratic Model', British Journal of Politics and International Relations, 2 (2000), 1-25;
144. Colin Hay, The Political Economy of New Labour (Manchester: Manchester University Press, 1999);
145. Simon Lee, Best for Britain? The Politics and Legacy of Gordon Brown (Oxford: Oneworld, 2007).
146. Yet Garrett demonstrates that national governments enjoy more freedom than suggested by the globalization thesis. See Geoffrey Garrett, Partisan Politics in the Global Economy (Cambridge: Cambridge University Press, 1998).
147. Hay, The Political Economy of New Labour.
148. David Sanders, 'Conservative Incompetence, Labour Responsibility and the Feel-Good Factor: Why the Economy Failed to Save the Conservatives in 1997?' Electoral Studies, 18 (1999), 251-70;
149. David Coates and Peter Lawler, eds, New Labour in Power (Manchester: University of Manchester Press, 2000);
150. Anthony Heath, Roger Jowell and John Curtice, The Rise of New Labour (Oxford: Oxford University Press, 2001);
151. Harold Clark, David Sanders, Marianne Stewart and Paul Whiteley, Political Choice in Britain (Oxford: Oxford University Press, 2004).
152. Hay, The Political Economy of New Labour.
153. Hay, The Political Economy of New Labour, p. 126.
154. Tony Blair, 'The Economic Framework for New Labour', in Forrest Capie and Geofrrey Wood, eds, Policymakers on Policy: The Mais Lectures (London: Routledge, 2001), pp. 103-22.
155. McLean, Rational Choice and British Politics, p. 231.
156. Mervyn King, 'The MPC Ten Years On' (Speech of the Governor of the Bank of England to the Society of Business Economists, 2 May 2007).
157. Mervyn King, 'The MPC Two Years On' (Lecture at Queen's University Belfast, 17 May 1999).
158. Mervyn King, 'The MPC Five Years On' (Speech delivered to the Society of Business Economists, at the Royal College of Pathologists, London, 22 May 2002).
159. Eddie George. 'The New Lady of Threadneedle Street', Bank of England Quarterly Bulletin, 38 (1998), 172-8.
160. Jagjit Chadha, Peter Macmillan and Charles Nolan, 'Independence Day for the "Old Lady": A Natural Experiment on the Implications of Central Bank Independence', Manchester School, 75 (2007), 311-27.
161. In a way, Brown 'misled' the markets, as he had hinted that any decision on independence 'would have to follow an assessment of the Bank's long-term track record in giving policy advice' (The Times, 7 May 1997.
162. Sucheen Patel, 'An Independent Bank of England: The Political Process in Historical Perspective', Public Policy and Administration, 23 (2008), 27-41.
163. The Economist, 5 October 1997;
164. The Mirror, 7 May 1997;
165. The Independent, 7 May 1997.
166. Andrew Rawnsley, Servants of the People: The Inside Story of New Labour (London: Hamish Hamilton, 2000), p. 37.
167. The manifesto pledged 'to ensure that decision-making on monetary policy is more effective, open, accountable and free from short-term manipulation' (Labour Party, 'New Labour, New Life for Britain' (London: Labour Party, 1996)).
168. Gordon Brown, 'Labour's Economic Approach' (Speech on 17 August 1993);
169. Gordon Brown, 'Labour's Macroeconomic Framework' (Speech to the Labour Finance and Industry Group, 17 May 1995).
170. Rawnsley, Servants of the People, p. 31.
171. Rawnsley, Servants of the People.
172. Keegan, The Prudence of Mr Gordon Brown, p. 199.
173. McLean, Rational Choice and British Politics, p. 229.
174. Burnham, New Labour and the Politics of Depoliticisation.
175. House of Commons, Hansard, 11 November 1997.
176. Gordon Brown, 'Statement by the Chancellor on the Central Economic Objectives of the New Government', 6 May 1997.
177. Gordon Brown, 'Chancellor's Speech at the Mansion House', 22 June 2005.
178. Balls, 'Delivering Economic Stability'.
179. Keegan, The Prudence of Mr Gordon Brown, p. 171.
180. Ed Balls, 'Stability, Growth and UK Fiscal Policy' (Speech at the Inaugural Ken Dixon Lecture, Department of Economics, University of York, 23 January 2004).
181. Peston, Brown's Britain, p. 91.
182. Keegan, The Prudence of Mr Gordon Brown, p. 169.
183. Stephen, The Treasury under Labour, p. 189.
184. Gordon Brown, 'Letter from the Chancellor to the Governor', 6 May 1997 (printed in Bank of England Quarterly Bulletin, 37 (August 1997).
185. Financial Times, 7 May 1997, emphasis added.
186. Patel, 'An Independent Bank of England';
187. Elgie and Thompson, The Politics of Central Banks.
188. Thatcher, The Downing Street Years, p. 698.
189. Lawson, The View from No. 11, p. 871.
190. Thatcher, The Downing Street Years.
191. Peston, Brown's Britain, p. 144.
192. Thatcher, The Downing Street Years, pp. 706-7.
193. Major, The Autobiography, p. 676.
194. Lamont, In Office, p. 325.
195. Major, The Autobiography, p. 675.
196. The debate continued during Ken Clarke's chancellorship.
197. Major stated that: 'Like Norman, he [Ken Clarke] favoured an independent Bank of England, but, cheerfully noting that there was 'not a snowball's chance in Hades' that I would agree, he merely chipped away at me by adding to the Bank's authority without conceding full independence' (p. 682).
198. Lamont, In Office, p. 325.
199. Lamont, In Office, p. 325.
200. And indeed the idea that central bank independence would be a step towards EMU was an important theme in media reports during May 1997.
201. Peston, Brown's Britain, p. 68.
202. Keegan, The Prudence of Mr Gordon Brown.
203. Rawnsley, Servants of the People, p. 31.
204. Peter Riddell, 'Blair as Prime Minister', in Anthony Seldon, ed., The Blair Effect (London: Little, Brown & Company, 2001), pp. 21-43.
205. Tony Blair, A Journey (London: Hutchinson), p. 113.
206. Peston, Brown's Britain, p. 148.
207. Brown's determination to implement this reform was reinforced by a conversation he had with the Chairman of the US Federal Reserve, Alan Greenspan, on 20 February 1997.
208. Peston, Brown's Britain, p. 128.
209. Keegan, The Prudence of Mr Gordon Brown, p. 156.
210. Lamont, In Office, p. 326, emphasis added.
211. House of Commons, Hansard, 11 November 1997.
212. House of Commons, Hansard, 11 November 1997.
213. House of Commons, Hansard, 11 November 1997.
214. The Tories sought to limit the damage by claiming that independence was the first step towards EMU.
215. According to a Conservative MP: 'The fourth, and in many ways most important, reason for the change is to prepare the way for Britain to enter a single European currency managed by a European central bank that will be wholly independent of any form of democratic control'. Sir Tapsell, House of Commons, Hansard, 11 Nov 1997.
216. William Riker, The Strategy of Rhetoric (New Haven: Yale University Press, 1996).
217. Gordon Brown, 'The Chancellor's Statement to the House of Commons on the Bank of England', 20 May 1997. Printed in the Bank of England Quarterly Bulletin, 37(3), August 1997.
218. Brown, 'The Chancellor's Statement to the House of Commons on the Bank of England'.
219. Brown, 'Letter from the Chancellor to the Governor'.
220. Brown, 'Letter from the Chancellor to the Governor';
221. Brown, 'The Chancellor's Statement to the House of Commons on the Bank of England'.
222. William Nordhaus, 'The Political Business Cycle', Review of Economic Studies 42 (1975): 169-90.
223. Bernhard, Banking on Reform.
224. King, Epistemic Communities and the Diffusion of Ideas, p. 112.
225. Philip Stephens, 'The Treasury Under Labour', in Anthony Seldon, ed, The Blair Effect, p. 186.
226. Anthony King et al., eds, New Labour Triumphs: Britain at the Polls, Chatham, NJ: Chatham House;
227. Philip Gould, The Unfinished Revolution: How the Modernisers Saved the Labour Party (Abacus, 1998);
228. Paul Webb, The Modern British Party System (London: Sage, 2000);
229. Heath et al., The Rise of New Labour;
230. Thomas Quinn, Modernising the Labour Party: Organisational Change Since 1983 (London: Palgrave Macmillan, 2004).
231. Hay, The Political Economy of New Labour.
232. Ed Balls, 'Open Macroeconomics in an Open Economy', Scottish Journal of Political Economy, 45 (1998): 113-32.
233. The Independent, 7 May 1997.
234. Stephens. The Treasury Under Labour, p. 188.
235. It is also worth stressing that structural inflation (and hence interests rates) in major capitalist economies was much lower in the late 1990s.
236. This means that the issue of who controls interests was less contentious than in the past. This factor might have also affected Brown's decision.
237. Gordon Brown, 'Chancellor's Speech at the Mansion House', 12 June 1997.
238. Gordon Brown, 'Chancellor's Speech at the CBI National Conference', 10 November 1997.
239. Stephens, The Treasury Under Labour, p. 186.
240. The Sun, 7 May 1997.
241. The Guardian, 7 May 1997.
242. House of Commons, Hansard, 11 November 1997.
243. Peter Tapsell, House of Commons, Hansard, 11 November 1997.
244. House of Commons, Hansard, 11 November 1997.
245. On this important issue, see Elgie and Thompson, The Politics of Central Banks.
246. See Lawson, The View from No. 11;
247. Lamont. In Office;
248. Thatcher, The Downing Street Years;
249. Major, The Autobiography.
250. Bob Woodward, Maestro: Greenspan's Fed and the American Boom (New York: Simon & Schuster, 2000);
251. David Marsh, The Bundesbank: The Bank That Rules Europe (London: Mandarin, 1993).
252. The Economist, 5 October 1997.
253. Balls, Euro-Monetarism, p. 16.
254. Keegan, The Prudence of Mr Gordon Brown, p. 245.
255. The Times, 25 July 2006.
256. Balls, 'Open Macroeconomics in an Open Economy';
257. Gordon Brown, 'The Conditions for High and Stable Growth and Employment', Economic Journal, 111 (2001), 30-44.
258. Torben Iversen, Jonas Pontusson and David Soskice, Unions, Employers and Central Banks (Cambridge: Cambridge University Press, 2000).
259. Balls, Euro-Monetarism, p. 23.
260. Gordon Brown, 'The Conditions for Full Employment' (The Mais Lecture by the Chancellor of the Exchequer, 19 October 1999).
261. Elster, Ulysses Unbound, p. 226.
262. Peston, Brown's Britain, p. 76.
263. Holmes, Precommitment and the Paradox of Democracy.
264. Peston, Brown's Britain, p. 76.
265. Lee, Best for Britain? p. 73.
266. Ben Clift and Jim Tomlinson, 'Credible Keynesianism? New Labour Macroeconomic Policy and the Political Economy of Coarse Tuning', British Journal of Political Science, 37 (2006), 47-69;
267. Brian Burkitt, 'Constrained Discretion: New Labour's Third Way for Economic and Social Policy', International Journal of Social Economics, 33 (2006), 4-10.
268. Cited in Peston, Brown's Britain, p. 77.
269. The Observer, 8 August 2004.
270. Keegan, The Prudence of Mr Gordon Brown, p. 247.
271. Rawnsley, Sevants of the People, p. 32.
272. Peston, Brown's Britain, p. 77.
273. Balls and O'Donnell, Reforming Britain's Economic and Financial Policy, p. 92.
274. Balls, Euro-Monetarism.
275. Keegan, The Prudence of Mr Gordon Brown, p. 156, emphasis added.
276. Ed Balls, 'Where Next After Euro-Monetarism?' Fabian Review, 105 (1992), 7-8.
277. Balls, Euro-Monetarism;
278. Balls, 'Where Next After Euro-Monetarism?'
279. Balls, Euro-Monetarism;
280. Brown, 'The Conditions of High and Stable Growth and Employment'.
281. Brown, 'The Conditions of High and Stable Growth and Employment'.
282. Brown, 'The Conditions of High and Stable Growth and Employment', p. C34., emphasis added.
283. Balls, 'Open Macroeconomic in an Open Economy';
284. Balls, 'Delivering Economic Stability'.
285. Balls, Euro-Monetarism.
286. Ed Balls Interview in The Independent, 8 September 2010.
287. Balls, 'Stability, Growth and UK Fiscal Policy'.
288. Balls, 'Open Macroeconomics in an Open Economy, p. 120.
289. Keegan, The Prudence of Mr Gordon Brown.
290. Stephens, The Treasury under Labour.
291. Andrew Marr, The History of Modern Britain (London: Macmillan, 2007), p. 534.
292. Malcolm Sawyer, 'Fiscal Policy under New Labour', Cambridge Journal of Economics, 31 (2007), 885-99, at p. 892.
293. Peston, Brown's Britain.
294. Stephens, The Treasury under Labour.
295. Peston, Brown's Britain, p. 152.
296. Clift and Tomlinson, 'Credible Keynesianism?' p. 67. For an alternative account of this process,
297. Colin Hay, 'Credibility, Competitiveness and the Business Cycle in Third Way Political Economy', New Political Economy, 9 (2004), 39-56;
298. Colin Hay, 'What's in a Name? New Labour's Putative Keynesianism', British Journal of Political Science, 37 (2006), 187-92.
299. This important point was suggested to the author by Hugh Ward.
300. Ruth Kelly, House of Commons, Hansard, 11 November 1997.
301. Financial Times, 7 May 1997;
302. The Times, 7 May 1997;
303. The Independent, 7 May 1997.
304. Marr, The History of Modern Britain, p. 532.
305. Lee, Best for Britain? p. 70.
306. Peston, Brown's Britain, p. 149.
307. Brown, 'The Conditions of High and Stable Growth and Employment', p. C35.
308. Gordon Brown, 'Chancellor of the Exchequer's Budget Statement', 21 March 2000;
309. Gordon Brown, 'Chancellor of the Exchequer's Budget Statement', 7 March 2004.
310. Gordon Brown, 'The Conditions for Full Employment'.
311. David Coates and Colin Hay, 'The Internal and External Face of New Labour's Political Economy', Government and Opposition, 36 (2001), 447-71.
312. Gordon Brown, 'Speech by Gordon Brown at the James Meade Memorial Lecture', 8 May 2000.
313. Clift and Tomlinson, Credible Keynesianism?
314. Brown, 'The Conditions for Full Employment'.
315. As a case in point, the publication of Blair's memoir has activated a fresh debate about the paternity of the Bank of England reform.
316. Blair, Brown or Balls?' Left Next Blog, 1 September 2010. Following Garnett, we believe that the uniquely rich collection of diaries and memoirs by the participants of the New Labour project should receive more attention from academics (Mark Garnett, 'New Labour's Literary Legacy', British Politics, 5 (2010), 315-36).
317. But see Philippe Aghion, Alberto Alesina and Francesco Trebbi, 'Endogenous Institutions', Quarterly Journal of Economics, 119 (2004), 565-612;
318. Avner Greif, Institutions and the Path to the Modern Economy (Cambridge: Cambridge University Press, 2006).
319. Schofield, 'Evolution of the Constitution'.
320. Elster, Ulysses Unbound; Pranab Bardhan, Scarcity, Conflicts and Cooperation (Cambridge, Mass.: The MIT Press, 2005).
321. Christopher Crewe and Ellen Meade, 'The Evolution of Central Bank Governance around the World', Journal of Economic Perspectives, 21 (2007), 69-90;
322. Marvin Goodfriend, 'How the World Achieved Consensus on Monetary Policy', Journal of Economic Perspectives, 21 (2007): 47-68;
323. Alex Cukierman, 'Central Bank Independence and Monetary Policymaking Institutions: Past, Present and Future', European Journal of Political Economy, 24 (2008), 722-36.
324. Balls and O'Donnell, Reforming Britain's Economic and Financial Policy.
325. Daron Acemoglu, Simon Johnson, Pablo Querubin and James Robinson, 'When Does Policy Reform Work? The Case of Central Bank Independence', NBER Working Paper No. W14033, 2008.
326. Michael Watson, 'The Institutional Paradoxes of the Monetary Orthodoxy: Reflections on the Political Economy of Central Bank Independence', Review of International Political Economy, 9 (2002), 183-96.
327. John Freeman, 'Competing Commitments: Technocracy and Democracy in the Design of Monetary Institutions', in Bernhard et al., The Political Economy of Monetary Institutions.
328. Daunton's fascinating history of taxation in Britain is also full of examples of rulers seeking to exploit the enabling properties of credible commitments.
329. Martin Daunton, Trusting Leviathan: The Politics of Taxation in Britain, 1799-1914 (Cambridge: Cambridge University Press, 2001).
330. Martin Feldstein, 'Let Greece Take a Eurozone "Holyday" ', Financial Times, 17 February 2010.
331. This analysis can be replicated to other European countries, as EMU institutions have failed to enforce fiscal discipline on a sustainable basis.
332. Mark Hallerberg, Jurgen von Hagen and Rolf Strauch, Fiscal Governance in Europe. (Cambridge: Cambridge University Press, 2009).
333. Clift and Tomlinson, Credible Keynesianism?
334. Coates and Hay, 'The External and Internal Face of New Labour's Political Economy';
335. David Coates, 'Darling, It Is Entirely my Fault: Gordon Brown's Legacy to Alistair and Himself', British Politics, 3 (2008), 3-21.
336. Robert Skidelsky, Keynes: The Return of the Master (London: Allen Lane, 2009).
337. Bennett McCallum, 'Crucial Issues Concerning Central Bank Independence', Journal of Monetary Economics, 39 (1997), 99-112.
338. Dani Rodrik, 'The Inescapable Trilemma of the World Economy' (Rodrik's weblog, 27 June 2007).