The podcast discusses the debate between experts and politicians in setting fiscal policy, exploring the influence of public debt trends on politicians' decisions. It delves into the notion of freedom as non-domination in decision-making and the role of fiscal councils in budgeting decisions. The intersection of economics and political philosophy in shaping fiscal policy is also explored.
Experts should influence fiscal rules to prevent overspending and mitigate public debt trends.
Politicians' incentives can lead to deficit bias, highlighting the need for effective fiscal policy guidance.
Deep dives
Arguments on Fiscal Policy Decision-Making
The podcast delves into the debate over who should determine fiscal policy, examining the suggestion that experts rather than politicians should dictate the budget deficit size. It highlights key arguments revolving around the increasing public debt trend, the potential issues with overspending, and the influence of politicians' incentives on borrowing, underscoring the importance of guiding fiscal policies effectively.
Challenges of Political Incentives on Spending
The discussion sheds light on the impact of political incentives on spending decisions, detailing how politicians might promise higher spending to secure votes, leading to deficit bias. It explores how politicians' competing interests and lack of coordination can drive excessive spending, ultimately affecting the macroeconomic landscape and public debt.
Role of Fiscal Councils in Democratic Policy-Making
The episode examines the role of fiscal councils in influencing fiscal policy decisions and enhancing democratic processes. It emphasizes the importance of fiscal councils in providing expert analysis and transparency, aiding in informed decision-making by parliament and fostering public accountability. The conversation navigates the complexities of seeking a balance between expert advice and democratic governance in shaping fiscal policies.
We’re back from our Easter break, and since we were last on the airwaves a book has been published by a certain former UK Prime Minister arguing – among other things – that elected politicians are unduly constrained by unelected technocrats, and that ministers should be freed from such fetters in order to enable them better to represent the will of the people. Not least, the book argues for scrapping the UK’s Office for Budget Responsibility, which currently offers advice on the likely implications of different fiscal policy decisions.
Well Liz Truss is – for better or worse – not our guest on today’s podcast. But the person who is has thought a great deal about how – and by whom – fiscal rules should be set.
That person is Stefano Merlo, Associate Lecturer in the Politics of Economic Policy here in the UCL Department of Political Science. Stefano is also currently finishing off a PhD in Political Economy and Political Theory at John Stuart Mill College in the Free University of Amsterdam.
UCL’s Department of Political Science and School of Public Policy offers a uniquely stimulating environment for the study of all fields of politics, including international relations, political theory, human rights, public policy-making and administration. The Department is recognised for its world-class research and policy impact, ranking among the top departments in the UK on both the 2021 Research Excellence Framework and the latest Guardian rankings.
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