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UK Economic Policy and the Global Financial Crisis: Paradigm Lost?

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  • DERMOT HODSON
  • DEBORAH MABBETT

Abstract

The global financial crisis of 2007–08 produced a sudden change in the economic policy of the United Kingdom (UK). Prior to the crisis, the government preached the gospel of price stability, fiscal prudence and light‐touch financial regulation. In the wake of the crisis, the government countenanced unconventional monetary policies, a surge in public‐sector borrowing and the need for a rethink of financial supervision. This article seeks to understand the significance of these changes using Peter Hall's theory of policy paradigms. Its central argument is that, contrary to appearances, the UK has not yet experienced a fundamental reordering of the instruments, institutions and aims of economic policy. Third‐order change cannot be ruled out as the crisis unfolds but the economic ideas underpinning UK economic policy have, for better or worse, demonstrated remarkable resilience thus far.

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  • Dermot Hodson & Deborah Mabbett, 2009. "UK Economic Policy and the Global Financial Crisis: Paradigm Lost?," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 1041-1061, November.
    • Handle: RePEc:bla:jcmkts:v:47:y:2009:i:5:p:1041-1061
    DOI: 10.1111/j.1468-5965.2009.02034.x
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    Cited by:

    1. David G. Mayes, 2009. "Did Recent Experience of a Financial Crisis Help in Coping with the Current Financial Turmoil? The Case of the Nordic Countries," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 997-1015, November.
    2. Schneider, Sebastian, 2014. "Varieties of capitalism, varieties of crisis response Bank bailouts in comparative perspective," PIPE - Papers on International Political Economy 21/2014, Free University Berlin, Center for International Political Economy.
    3. Louis W. Pauly, 2009. "The Old and the New Politics of International Financial Stability," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 955-975, November.
    4. Carsten Daugbjerg & Adrian Kay, 2020. "Policy feedback and pathways: when change leads to endurance and continuity to change," Policy Sciences, Springer;Society of Policy Sciences, vol. 53(2), pages 253-268, June.
    5. Oldrich Bubak, 2018. "Flexicurity and the dynamics of the welfare state adjustments," Transfer: European Review of Labour and Research, , vol. 24(4), pages 387-404, November.
    6. Iain Begg, 2009. "Regulation and Supervision of Financial Intermediaries in the EU: The Aftermath of the Financial Crisis," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 1107-1128, November.
    7. Rau-Goehring, Matthias & Reinsberg, Bernhard & Kern, Andreas, 2020. "The role of IMF conditionality for central bank independence," Working Paper Series 2464, European Central Bank.
    8. Molintas, Dominique Trual, 2013. "Impact of Globalisation on the British consumer motivations towards luxury commodities: Generation Y in focus," MPRA Paper 98878, University Library of Munich, Germany.
    9. Dermot Hodson & Lucia Quaglia, 2009. "European Perspectives on the Global Financial Crisis: Introduction," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 939-953, November.
    10. Iain Hardie & David Howarth, 2009. "Die Krise but not La Crise? The Financial Crisis and the Transformation of German and French Banking Systems," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 1017-1039, November.
    11. Waltraud Schelkle & Anke Hassel, 2012. "The Policy Consensus Ruling European Political Economy: The Political Attractions of Discredited Economics," Global Policy, London School of Economics and Political Science, vol. 3, pages 16-27, December.
    12. Lucia Quaglia, 2009. "The ‘British Plan’ as a Pace‐Setter: The Europeanization of Banking Rescue Plans in the EU?," Journal of Common Market Studies, Wiley Blackwell, vol. 47(5), pages 1063-1083, November.

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