IGLESIAS CANARIAS Y SUS RETABLOS 103

In the preceding section, the concepts o f the core executive and policy networks were elucidated as vehicles through w hich to make sense o f the context that our chosen actors operate within. However, it w as also made clear that in order for networks to form in any given policy area, there must be som e issue w hich is defined by agents as problematic and as

51 Simon highlights this problem when he refers to bounded rationality. See Simon, H. Administrative Behaviour. (New York: Free Press, 1957), p.3.

See Sabatier, P and Jenkins-Smith, H. ‘The Advocacy Coalition Framework’ in Sabatier, P. Theories gf the Policy Process. (Boulder: Westview Press, 1999), p. 122.

Lowndes, V. ‘Institutionalism’, in Marsh, D. and Stoker, G. Theory and Methods in Political Seisms, (2nd ed.), p.101.

Hay, C. ‘The Tangled Webs We Weave’, p.43.

requiring a concerted attempt by them at collective resolution. In short, there must be something that makes it necessary for our actors to act.

This account assumes that the behaviour o f our actors must be viewed in terms o f crisis management and crisis avoidance. In other words, o u r agents act in response to the possible or actual onset o f crisis conditions.55 However, a crisis cannot be understood from outside the perspective o f those that define and experience it.56 It is through agent interaction that structures like the international economic system develop and through interaction that agents define the rules that constitute the normal operation o f those economic structures. Therefore a crisis is the moment at which som e group o f actors come to the realisation that the structures that they uphold and work within are: (a) no longer operating in what they regard to be normal tolerance: (b) that they have exhausted the available techniques o f amelioration and (c) that if the structural framework broke down, this would be regarded by the actors, for whatever reason, as catastrophic.57 The m ere fact that a structure has broken down is not enough to guarantee the event the status o f a crisis, for it to be a crisis proviso C must also hold.

It is assumed that the Bank-Treasury-Ministerial core executive network was united in its belief that the destabilisation o f sterling and/or the international monetary system would be catastrophic (c). At this level, the network can be view ed as a unitary actor. Yet, the individual motives for agents holding position (c) might be different, and in fact might alter over time.

Furthermore, the strategies for crisis resolution advocated by each o f the respective actors may also differ in light o f their conflicting motivations for holding (c) to be true. Therefore at this level, it is possible that the netw ork is not a unitary actor.

35 - r i . ,

This section also proceeds inductively and the decision to use a crisis framework was made after I had analysed the official documents.

Habermas, J. Legitimation Crisis. (London: Heinemann, 1976), p .l; Hay, C. Restating Social and Political Change, p.86-87 and Jackson, R. ‘Crisis Management and Policymaking: an Explanation of Theory and Research’ in Rose, R. (ed.)

The Dynamic? of Public Policy: a Comparative Analysis.

(London: Sage, 1976), p.209.

58

However, the fact that these agents all agree on the definition o f what constitutes a crisis is not enough for them to begin networking. There must also be the shared belief that the economic structures are no longer working within their normal tolerance levels (a), and that if som e intervention is not embarked upon it will only be a matter o f time before it is too late and available mechanisms for crisis resolution are exhausted (b). Therefore, it is also postulated that proposition (a) also holds true and that the external economic system was not w orking within normal tolerance levels. This was because:

• Firstly, there were insufficient foreign exchange reserves with which to maintain the stability o f sterling.58

• Secondly, that Britain was in almost continual balance o f payments deficit and this placed the meagre reserves under intolerable and constant strain.59

• Thirdly, that because o f its role as banker to the sterling area, the UK held on deposit, in London, liabilities that far outstripped the reserves available to back those claims.60

• Finally, these three weaknesses undermined confidence in the pound to such a degree that speculation against it was rife.6'

As our group o f institutional actors within the core executive believed that the collapse o f th e fixed exchange rate system was to be regarded as catastrophic (c) and because it was also clear that the economic system was not working within acceptable tolerances (a), they attempted to ensure that proposition (b) would be avoided and they entered into network relations in order

” °ffe, C. Contradictions of the Welfare State. (London: Hutchinson, 1984), p.36-39.

PRO T318/188 ‘ Breakdown of Gold and Convertible Currency Reserves’, January 1968.

’ Financial Statistics. (CSO: No.93, Jan. 1970), p.95.

PRO T267/29 ‘THM: the Sterling Balances Since the War’, undated.

to avert the onset o f a full scale crisis. Consequently, institutional actors formed themselves into tw o types o f overlapping networks in order to manage the currency. The first type o f network predominantly searched for techniques to reduce the likelihood of crisis. The second type engaged in contingency planning. In o th er words, it considered the possibility o f alternate futures in which crises did occur because the techniques employed by agents in the first type o f netw ork failed to stabilise the international economic structures.62 The main function o f this type o f network was to dampen the effects o f any external economic crisis that could not be avoided. However, both o f these network types operated within a context o f mutual path dependency. In other words, the success or failures o f the strategies employed by the first type o f network influenced the future choices o f the second type and vice versa.

Figure 2.1 Networks and Crises