The professional politics of the austerity debate: A comparative field analysis of the European Central Bank and the International Monetary Fund

AuthorCornel Ban,Bryan Patenaude
Published date01 September 2019
Date01 September 2019
The professional politics of the austerity debate:
A comparative field analysis of the European
Central Bank and the International Monetary Fund
Cornel Ban
| Bryan Patenaude
Department of Organization, Copenhagen
Business School, Copenhagen, Denmark
Department of Global Health Economics,
Harvard University, Cambridge,
Massachusetts, USA
Cornel Ban, Department of Organization,
Copenhagen Business School, Hovedstaden,
Copenhagen, Denmark.
Funding information
Romanian government grant (EAHERDIF) to
Center for the Study of Democracy at the
´-Bolyai University, Grant/Award
Number: PN-III-P4-ID-PCE-2016-0729
How do different professional structures shape the economic ideas
that international economic organizations use to prescribe policy
recommendations or derive legitimacy and authority for them? The
comparative professional field analysis proposed herein deploys a
novel combination of content, network and regression analysis to
uncover the precise role of different qualifications, experiences and
hierarchies in shaping the economic expertise invoked by the
European Central Banks and the International Monetary Funds
main policy documents, with a specific focus on debates over fiscal
consolidation in the wake of the global financial crisis of 2008. The
findings challenge much of the scholarship about how economic
ideas diffuse across professional domains and where change on
macroeconomic policy in international economic organizations is
likely to come from. As such, the article should be of interest to
scholarship on international bureaucracies, the politics of profes-
sional knowledge and the international political economy of fiscal
How do different professional structures (qualifications, experiences, hierarchies) shape the economic ideas with
which central bankers and their peers in international financial institutions derive legitimacy and authority for their
official policy positions? This conceptual problem is important because scholarship has not yet provided a rigorous
theoretical and methodological framework for analysing in depth the linkages between the various fields of the eco-
nomics professions and the dynamics of economic ideas in policy settings. The empirical context for clarifying this
problem is the fiscal policy doctrine of an international central bank (the European Central Bank; ECB) and an interna-
tional lender of last resort to sovereign states (the International Monetary Fund; IMF) in the wake of the global finan-
cial crisis of 2008, a critical juncture in the debates on fiscal consolidation.
The article builds on the state of the art on the sociology of professions and international organizations when it
conceives of the corps of economists shaping the policy doctrines of the ECB and the IMF as transnational issue
Received: 14 February 2018 Revised: 24 June 2018 Accepted: 13 August 2018
DOI: 10.1111/padm.12561
530 © 2018 John Wiley & Sons Ltd Public Administration. 2019;97:530545.
professionalswho assert scientific authority and enrol the ideas and professional prestige of sympathetic interlocu-
tors in order to gain legitimacy, establish cognitive dominance over certain policy niches (issue control) and, conse-
quently, smooth the acts of transnational administration (Henriksen and Seabrooke 2016; Seabrooke and Henriksen
2017). While the existing scholarship on this linkage shows that such activities of issue professionals create incen-
tives for them to exploit both the intellectual shifts and the intellectual status quo in elite niches of academic eco-
nomics (Chwieroth 2009; Ban 2015, 2016; Ban et al. 2016; Clift 2018; Grabel 2018), the professional terrain where
scientific authority originates (Fourcade 2009), this article advances the state of the art by looking beyond academic
economics and into other fields of economic expertise ranging from the private sector to think-tanks.
Most importantly, this article deploys a new conceptual and methodological apparatus to undertake a systematic
comparison of how different professional structures constituting economic expertise in academic economics, central
banks, think-tanks, corporations,or the domestic publicsector shape the formulation of policydoctrine in complex orga-
nizationssuch as the ECB and theIMF. To do this, the articleuncovers the patterns of intellectual heterogeneity inthese
institutions and, critically, thespecific patternsof career sequencesand professionalaffiliations that makeone more likely
to supportfiscal policy stability or changein the official views ofthese two financial institutionsafter the shock of 2008.
This article focuses on the 200914 period as a critical juncture during which macroeconomic policy pieties were
extensively questioned (Armingeon and Bacarro 2012; Moschella 2012, 2015; Grabel 2018) even as the power and
unity of the creditor class remained largely unchallenged (Hager 2014; Nesvetailova 2017; Young and Pagliari 2017).
Indeed, by 2009, it was no longer possible for policy-makers to claim that most economists agreed with the counter-
productive nature of expansionary fiscal policies whenever interest rates are close to zero and/or financial frictions
in the economy were significant (Ban 2016; Clift 2018).
Some readers may wonder why one should compare the ECB, a monetary policy institution, with the IMF, a tra-
ditional international fiscal authority. The answer is simple: central banksrole is not relegated to monetary policy. In
reality, government spending and taxation decisions (or fiscal policy) are as important to them as other non-monetary
issues such as financial stability (Gabor 2016). Regarding fiscal policy, this is particularly true in moments of extreme
stress such as the Great Recession, a crisis triggered by financial pathologies that central banks both contributed to
and attempted to manage (Blyth 2013). We now have conclusive evidence that the 2008 financial crisis increased
the intensity of central bank communication on fiscal policy (Allard et al. 2013), a matter of high salience in the con-
text of implementing monetary policy when government bonds are bought or sold in open-market operations (Gabor
2016). Moreover, the state and the central bank must coordinate, as the state provides the supervisory services and
the monetary (lender of last resort) and fiscal (deposit insurance, implicit bailout guarantees) backstops that together
make bank liabilities sufficiently safe for them to trade at par with the liabilities of the central bank(Braun 2016,
p. 1074). Yet despite growing interest in the rise of central bankerscommunication on fiscal policy, no research has
been published to date on the professional politics of producing the content of that communication, let alone how it
compares with that of other transnational technocracies with a clear mandate to deal with fiscal issues such as
the IMF.
The article is organized as follows: the first section reviews the relevant literature and outlines the arguments for
why fiscal policy matters to central bankers and international financial institutions. The following two sections intro-
duce a new theoretical and methodological framework for studying the politics of economic expertise in international
organizational settings. The next two sections provide the results and implications of the empirical analysis. The final
section concludes.
The conceptual problems raised by the linkages between the professional structures of economic expertise and the
fiscal policy doctrines of international institutions bear primarily on two related strands of scholarship: the politics of
knowledge in international financial institutions and the sociology of the economics profession.

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