The political economy of 'policy credibility': the new-classical macroeconomics and the remaking of emerging economies
Author: Grabel, I.
Source: Cambridge Journal of Economics, Volume 24, Number 1, January 2000 , pp. 1-19(19)
Publisher: Oxford University Press
The criterion of 'policy credibility' is invoked with increasing frequency today by new-classical development economists in debates over economic and institutional reform in developing and transitional countries. The paper argues that the credibility criterion is used to privilege neoliberal economic policies and associated institutions. The paper demonstrates that the credibility criterion is theoretically anti-pluralist and politically anti-democratic. In this connection, the paper argues that a policy's credibility is always secured endogenously through political and economic power rather than exogenously by virtue of the epistemiological status of the theory that promotes it. The paper concludes by suggesting two alternative criteria by which policy regimes and the governance structure of monetary institutions could be adjudicated. These alternative criteria are termed the 'principle of democratic credibility' and the 'principle of fallibility'.
Document Type: Original Article
Affiliations: Graduate School of International Studies, University of Denver, Denver, CO 80208, USA
Publication date: 2000-01-01
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