Constitutionalizing Austerity: Taking the Public out of Public Policy
| Published date | 01 February 2016 |
| Author | Stephen McBride |
| Date | 01 February 2016 |
| DOI | http://doi.org/10.1111/1758-5899.12271 |
Constitutionalizing Austerity: Taking the Public
out of Public Policy
Stephen McBride
McMaster University
Abstract
Nothwithstanding their failure to achieve stated objectives, austerity policies have been pursued with persistence. Rather than
failures prompting reconsideration, there is a clear trend to render austerity policies a permanent, constitutionalized response
to economic challenges ‘for all seasons’. This article links the drive to austerity with the ‘new constitutionalism’literature which
depicts procedurally the removal of important decisions from the realm of liberal democratic politics and their re-location
behind impenetrable and unaccountable barriers; and, in terms of content, embed neoliberal practices and policies, and the
power relations that underpin them, as ‘normal’. This takes the public out of public policy making with negative consequences
for democratic governance.
Policy Implications
•Need to reconsider the advantages of maintaining policy flexibility in the face of economic crises, as opposed to locking
into rigid, pre-ordained policy solutions based on theory.
•Given the weaknesses of the prima facie evidence in favour of austerity measures there is a need to ensure diversity of
policy advice so that orthodox solutions can be checked against heterodox opinions before being enacted. Institutions
that foster such a process should be encouraged.
•Need to reconsider the impact of constitutionalizing, and thereby depoliticizing important economic policy areas on the
health of democratic governance. Democracy matters, including public control over policy issues, and should be enhanced
rather than circumscribed.
•Need to maintain and further develop policy analysis capacity within the public sector to avoid dependence on private
providers.
Once the initial panic over the 2007–08 financial crisis had
abated, many states and international organizations reverted
to policies of austerity. A considerable debate on the wisdom,
or otherwise of these policies has emerged (Blyth, 2013; Hern-
don, Ash and Pollin, 2013; Krugman, 2013; Stiglitz, 2011). How-
ever, despite the initial resort to stimulus policies and
notwithstanding the serious criticisms leveled at austerity as a
one-size-fits-all policy for all seasons, long-standing moves to
remove fiscal discretion from governments have intensified.
To the extent these moves succeed, fiscal policy will join other
key instruments of neo-liberal economic policy such as mone-
tary policy and trade and investment policy, in being removed
from the realm of political choice and consigned to that of
pre-arranged and, by design at least, permanent rules.
Given the turn from stimulus to austerity in 2010 in the
midst of an ongoing economic crisis, austerity’s heightened
profile in academic and political discourse is understandable.
However, the novelty of austerity can be exaggerated. The
neoliberal policy paradigm that has dominated economic
policy since the 1970s always included a penchant for a
restrained state to be achieved by fiscal constraints. Further,
austerity is an old and familiar idea towards which elites
quickly gravitate in times of trouble. Blyth (2013, pp. 98–99)
gives the most coherent account in which elite concerns
about the state are part of the liberal inheritance from its
very beginning. The state may have been necessary for the
development and protection of the capitalist system but it
simultaneously, though usually only potentially, represented
a threat to it. Austerity addresses these concerns very well
by imposing limits on state actions, through fiscally con-
straining it in the name of balanced budgets, and especially
on its capacity to raise debt to finance its activities. More-
over, according to Blyth (2013, p. 115) the general narrative
of austerity speaks to ‘parsimony, frugality, morality, and a
pathological fear of the consequences of government debt
(that) lie deep within early liberalisms’fossil record from its
very inception.’This may be an overstatement. Obviously
elements of capital have been willing, over the years, to
own public debt through lending to governments. The real
issue is whether the state has the capacity and willingness
to service and repay its creditors (Streek, 2014, pp. 76–78)
and how these state priorities might be guaranteed.
For several decades neoliberal political parties and associ-
ated interests have prevailed in the battle of ideas on these
points. However, there has never been a guarantee that
such predominance in ideas, and at the polls, would
Global Policy (2016) 7:1 doi: 10.1111/1758-5899.12271 ©2015 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 7 . Issue 1 . February 2016 5
Research Article
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