4. Marco Teórico
4.6 Las transformaciones del capitalismo y sus impactos en el mercado de trabajo
of the kind and quality of political resources than can be mobilised by civil society
actors, then there is a direct functional relationship between institutions and interests:
" ... if policymakers are assumed to assess whether exercise of their freedom
against any given moment's constellation of interests in a society could be
institutional suicide, such hesitation is comprehensible.
As a result if can generally be predicted that a public institution's actions must always have the support of a politically powerful interest coalition ... Therefore the changing relative strength of interests in society, not the institution's structure, is the source of policy decisions - and this strength is a function of the oft overlooked and always changing political background" (Posen,
1993: 46).
We noted in the previous chapter that the prevailing orthodoxy is one that rests on the (not uncontested) assumption of the neutrality of monetary policy over the long-run. That assumption of neutrality of impact on real economic activity, is mirrored in the assumption that the particular institutional framework suggested by that orthodoxy is, in terms of the distributional consequence, benign in its distributional impact. This second assumption is contested by the political economy literature. Posen observes that:"Restating the general framework in the context of monetary policy begins with three observations: the existence and independence of CB [central bank] institutions are subject to democratic control; inflation has significant redistributive effects; financial intermediaries as a group are harmed by inflation. Thus, while CB decision-makers form their policies in part in response to statutory constraints, they also simultaneously respond to the risks that anti-inflationary policies could lead to alterations in the autonomy and powers of the CB itself. And financial intermediaries reduce the risk through political activities in order to gain from lowering the inflation level "
(1993: 47).
The literature reviewed in Chapter
2
is strongly suggestive of contingent patterns of relationship between central banks and particular socio-economic forces or interests. The need to maintain a high level of credibility (or reputation) with financial actors suggests that central banks will develop a special relationship with the finance sector. This relationship can be recast as a 'political alignment' between central banks and the financial sector:" .. .in general central banks have a particular political character stemming from their special relationship with the financial sector. Given this political alignment, one might reasonably expect that the distributive consequences of their actions should favour that sector over others in society. Moreover one would expect their view of what constitutes 'sound' policy - and indeed 'sound' politics - to coincide to a large degree with those of the financial community, particularly the larger and longer established banks which dominate oligarchical financial systems" (Bowles and White,
1994: 247).
And yet there is also the acknowledgment that a central bank, in order to maintain its independence from government, "must pay some attention to gaining the support, or a t least the acquiescence, of other interests in society" (Bowles and White,
1994: 247).
Consistent with the logic of this argument Posen proposes a 'model of interests' in which central bank independence and policies are a function of financial sector opposition to inflation:
"[S]ince CB independence is always at risk from proponents of inflation, and that risk both determines the policies pursued and is determined by the political strength of opposition to inflation, there is no reason to expect that CB credibility or revealed policy preferences will have a fixed relationship with
instead they will vary with developments in the
(1993: 47,
emphasis added).The import of this is very much at odds with the conceptual frameworks discussed in
the previous chapter. Inflation, it is argued, is the product of a distributional struggle, not of the opportunistic manipulation of monetary policy for either electoral advantage or to generate revenue (Posen,
1993: 47).
Posen reports research which purports to demonstrate a causal link between more effective finance sector opposition to inflation on the one hand, and higher central bank independence and lower inflation rates on the other(1993: 50),
and on the basis of this evidence advances a distinction between and institutional models of inflation. The institutional account would have it that central bank independence will result from a situation in which a right-leaning government thinks itself at risk of losing office to the left. Accordingly, government instability or turnover becomes an important predictor of central bank independence. While the involvement of financial actors may be influential at the time of the design of the institutional arrangements, the interests of financial actors (and in particular, financial sector opposition to inflation) becomes less of a factor once the formal changes have been effected. The 'interests' explanation denies the importance of government instability altogether (since the purpose of central bank independence is not to bind the hands of the government but to fight off other inflationary advances championed by other interests). Moreover, because the 'interests' explanation admits of the possibility that the degree of central bank independence will be variable over time (i.e. the parameters of central bank independence are not fixed by statutory arrangements), the extent of central bank independence will be a function of the relative power and influence of financial interests within the political economy (see Posen,1993: 50-51).
However we would contend that there are two principal limitations to the model advanced by Posen. Firstly the argument assumes a classical pluralist political system which allows for a range preferences to be articulated and codified into policy from time to time; no interest group is privileged in terms of its access to political resources, nor in terms of its mobility - 'voice' and 'exit' in the classic Hirschmann formulation (Hirschmann,
1970).
Secondly it assumes that institutional arrangements canbe
modified to accommodate shifts in the relative influence of different interests over time, and that the mix of institutional arrangements used to place a central bank on an independent footing will not include sanctions where that independence is challenged, diminished, or subject to an override. Moreover, and most importantly, the argument risks both a simplistic and an arbitrary bifurcation as between institutions and interests, and a decidedly ahistorical approach. Arguably the dynamic interplay between interests and institutions is somewhat more complex than the distinction implies.
These limitations notwithstanding, the model does suggest that institutional design, establishment, and maintenance is part of a political process in which the mobilisation of interests plays an important role. It also suggests that the utility or integrity of a particular set of institutional arrangements will be variable over time, and that, as a consequence, an institutional framework that provides for a measure of flexibility or discretion will be better placed to withstand shifts in interest group influence (represented in changes as between left and right party governments) over time. Moreover the model also suggests that central banks may be active in the process of shaping opinions, and by implication preferences and policies, within the electorate. That in turn suggests that an independent central bank may be able to generate additional bases of support within society, and that institutional arrangements may be somewhat more durable than the 'interests ' model suggests:
"[T]here is no institutional 'fix' for the redistributive struggle over monetary policy ... CBs designed with similar degrees of statutory independence will offer significantly differing degrees of protection from inflation over time as the political situation alters" (Posen,
1993: 53).
Whereas Goodman is concerned to explore the conditions under which, in a formal sense, central banks may be made more independent of governments, the alternative approach seeks to examine the conditions under which overt conflict and politicisation (and regime changes in institutions) are present. Posen suggests in effect that, because formal elements of the institutional regime are underpinned by societal interests, a focus on formal regime shifts may militate against an appreciation of the importance of variation in finance sector opposition to inflation, which is causally more significant, and independent of the formal institutional status of the central bank. There is a clear affinity between this line of argument, and the notion of a state directed network.
Examining the institutional arrangements underpinning the conduct of monetary policy in Canada, Coleman,