The power of economists within the state

Published date01 March 2018
AuthorSarah Kolopp
Date01 March 2018
The power of economists within the state
Johan Christensen
Stanford University Press, 2017, 232 pp., £52.00 (hb), ISBN: 978-1503600492
What was the role of economists in free-market reforms in the late twentieth century? By investigating the links
between economic expertise and neoliberal transitions, Johan Christensen's book contributes to a growing body of
literature in economic sociology and comparative historical sociology which examines the policy power of econo-
mists and their ideas(see the works of Marion Fourcade, Sarah Babb, Johanna Bockman, Monica Prasad or Eliza-
beth Popp-Berman). The author succeeds in delivering on a set of ambitious research objectives: understanding the
dynamics of free-market reforms in four countries (two liberal market economies, New Zealand and Ireland;
two social democracies, Norway and Denmark) as of the 1970s, and the role that economic experts played in
facilitating them.
To explore these questions, Christensen chooses to focus exclusively on tax policy. Taxation, he argues, repre-
sents an ideal case, as there seems to be, from the 1970s onwards, a widely shared consensus in mainstream eco-
nomics about the goals of tax reform (ensuring the neutral allocation of resources) and its means (broadening tax
bases, and lowering rates). He uses this conventional wisdom as a basis to define what he calls market-conforming
tax policies, which are not about reducing the level of revenue but about collecting a given amount of revenue in
a way that entails the fewest possible distortions to the allocation of resources(p. 7).
Christensen advances two hypotheses to explain the degree of market-conformity of post-1970s tax reforms:
(1) he relates it to the national organization of economic expertise and, more specifically, to the degree of entrench-
ment of economic knowledge within national bureaucratic structures: when solidly located within the state, econo-
mists (and, especially, neoclassical economists) could draw, Christensen argues, on their scientific authority and on
an entrepreneurial administrative ethos to get policy leverage, thus shaping tax reform in market-conforming terms;
(2) he aims to demonstrate that the power of neoclassical economists over tax reforms as of the 1970s built on
positions secured within the state by Keynesian economists in the post-war period. One of the book's main
strengths is to identify concrete channels for economists' policy influence. Christensen notably urges us to pay
attention to economists' precise locations within the state and, specifically, to recruitment patterns and generational
change in ministries of finance. He also points to the importance of investigating the sources of their professional
authority, and the modalities of their professional ethos.
After setting out his theoretical framework in the first chapter, Christensen's book follows a rather conventional
structure. The second chapter maps out the (diverging) tax policy trajectories of New Zealand, Ireland, Norway and
Denmark. New Zealand and Denmark represent both ends of the policy spectrum. From 1984 to 1990,
New Zealand embraced radical market-conforming tax policies, lowering rates, broadening bases, and increasing
neutrality in all areas of taxation, while Denmark resisted the introduction of such policies, maintaining high tax
rates on labour and capital until 2010. In Norway and Ireland, tax reforms were less clear-cut. Norway implemented
many reforms of the market-conforming tax policy package, but kept a very favourable housing tax regime. Ireland's
aggressive tax cuts on labour and on corporate income in the 1990s were not accompanied by a subsequent broad-
ening of the tax base. In each of the following four chapters, Christensen draws on his theoretical model to account
DOI: 10.1111/padm.12396
238 © 2018 John Wiley & Sons Ltd Public Administration. 2018;96:238239.

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