When rules started to rule : the IMF, neo-liberal economic ideas and economic policy change in Britain
Clift, Ben and Tomlinson, Jim. (2011) When rules started to rule : the IMF, neo-liberal economic ideas and economic policy change in Britain. Review of International Political Economy, Vol.19 (No.3). pp. 477-500. ISSN 0969-2290
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Official URL: http://dx.doi.org/10.1080/09692290.2011.561124
This article reassesses the neo-liberal shift within British economic policy-making and the international political economy, focusing especially the role of the International Monetary Fund (IMF) in the 1960s. The IMF has always used the conditions attached to its lending to try and shape borrower's policy; here we explore the evolving content of that conditionality and the economic ideas underpinning it. Using recently released IMF records, as well as other archives, we argue that the negotiations between the IMF and the UK Government in the 1960s can be seen as part of the Fund's drive towards a crucial change from discretionary to rules-based approaches to macroeconomic policy making. This drive took place within a struggle over a specific policy instrument, domestic credit expansion (DCE), at that time regarded as an important measure of monetary policy. The article locates the IMF advocacy of DCE within an attempt by the Fund to constrain discretionary policy-making through increasingly specific and binding rules. In response, UK Government officials began to pre-empt and even deceive the Fund to avoid being tied down. Our analysis unpacks which neo-liberal economic ideas the Fund embraced, noting its rejection of monetarism. In the period charted here (1965–69), the rules-based regime remained compatible with Keynesianism. However, the UK Government's grudging acceptance of this approach provided a crucial condition of possibility for a significant qualitative shift in macroeconomic policy-making when rules later became infused with an increasingly neo-liberal character.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HC Economic History and Conditions|
|Divisions:||Faculty of Social Sciences > Politics and International Studies|
|Library of Congress Subject Headings (LCSH):||Great Britain -- Economic policy -- 20th century, Great Britain -- Foreign economic relations, International Monetary Fund, International economic relations|
|Journal or Publication Title:||Review of International Political Economy|
|Official Date:||21 June 2011|
|Number of Pages:||24|
|Page Range:||pp. 477-500|
|Access rights to Published version:||Restricted or Subscription Access|
|Funder:||Economic and Social Research Council (Great Britain) (ESRC), University of Warwick. Dept. of Politics and International Studies|
Alexander, S. (1952) ‘Effects of a Devaluation on a Trade Balance,’ Staff Papers, Vol. 2, pp. 263-78.
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