Baker, A.P. and Widmaier, W. (2013) The Institutionalist Roots of Macroprudential Ideas: Veblen and Galbraith on Regulation, Policy Success and Overconfidence. New Political Economy, 19 (4). ISSN 1356-3467
Abstract
One consequence of the global financial crisis has been to prompt debate over macroprudential regulation – meant to limit private risk-taking that threatens systemic stability. In this paper, we stress the roots of macroprudential ideas in the Institutionalist economics of Veblen and Galbraith in a way that highlights both unrecognised policy possibilities and underappreciated impediments to policy effectiveness, arguing in particular that regulatory success can breed overconfidence. First, we argue that while Veblen's views anticipated macroprudential arguments, they also obscured tensions between the technocratic acumen of policy ‘engineers’ and popular legitimacy. Second, we argue that while Galbraith's views similarly shaped the postwar Keynesian policy mix, they also echoed Veblen in underrating the potential for populist resentment of an intellectual ‘technostructure’. We conclude that while this analysis can be seen as highlighting an overlooked century of macroprudential debate, it also demonstrates the potential for technocratic overconfidence – which can eventually undermine policy legitimacy and effectiveness.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2013 Taylor & Francis. This is an author produced version of a paper subsequently published in New Political Economy. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | institutionalism; Keynesianism; macroprudential regulation; constructivism; Veblen, Galbraith |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Politics and International Relations (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 11 May 2017 13:21 |
Last Modified: | 18 Jul 2017 09:00 |
Published Version: | https://doi.org/10.1080/13563467.2013.796447 |
Status: | Published |
Publisher: | Taylor & Francis |
Refereed: | Yes |
Identification Number: | 10.1080/13563467.2013.796447 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:116159 |