Crisis management, new constitutionalism, and depoliticisation: recasting the politics of austerity in the US and UK, 2010–16

ABSTRACT Political economy literature has sought to explain the rapid shift from fiscal stimulus to austerity after the 2008 crisis. Influential contributions highlight the relative explanatory value of ideational or structural factors in contributing to post-crisis austerity. Drawing on Stephen Gill’s (1998) analysis of new constitutionalism and Peter Burnham’s (2001) understanding of depoliticisation, I contend that these frameworks offer a more useful lens to understand how post-2010 austerity in the US and UK was shaped by an enduring consensus on macroeconomic policy governance consolidating during the 1990s. Examining the role of fiscal mechanisms such as PAYGO in the US and the ‘Fiscal Golden Rules’ in the UK, and the operational independence conferred to central banks, I illustrate how Third Way governments institutionalised budgetary reforms and distanced macroeconomic policymaking from popular political contestation. Despite temporary lapses with this logic of fiscal restraint, as well as the rollout of historic monetary policies after 2008, I argue that these practices became deeply embedded within state institutions. Focusing on PAYGO in the US and the OBR in the UK, I show how policymakers redeployed policies and practices from the 1990s amidst the 2008 crisis to externalise responsibility for implementing austerity measures.