Feeding the Beast: The Invention and Politicization of the Public Sector Borrowing Requirement in the UK, 1960s-1970s

Jose Tomas Labarca, University of Edinburgh

Sociologists and political scientists frequently study the relationship between economic policy and the climate of general and expert opinion, but the role of budgetary frameworks for structuring that relationship has been less scrutinized. This article addresses that gap through an analysis of the public sector borrowing requirement (PSBR), the UK’s main fiscal indicator until the late 1990s. While it is well-known that the PSBR was at the forefront of economic policy during the 1976 IMF crisis, we know less about it as a macroeconomic indicator. It has generally been treated as any other deficit indicator, overlooking that it was more comprehensive and there was no agreement on its meaning and relevance. Drawing on original archival evidence, the paper traces the evolution of the Financial Statement and Budget Report, a key instrument for the government’s attempts to structure and influence economic policy debate, and examines the social processes behind the production, uses, and understandings of public finance statistics. Accounting and budget conventions provide specific modes of reasoning and benchmarks for assessing the economic role of the state. The story of the PSBR helps us understand why and how some statistics become more salient and consequential than others. Macroeconomic indicators can gain prominence in a relatively quick fashion and against the will of policymakers. They are critical mediating devices and potentially much more consequential than initially intended. Once in use, they are open to strategic struggles over their meaning and relevance for economic policy.

No extended abstract or paper available

 Presented in Session 88. From the Top: Elites and Fiscal Policy Making