Accounting for policy change through multi-level analysis: the reform of the Bank of England in the post-war era

This article examines the post-war institutional reform of the Bank of England. In 1946, the Attlee government nationalised the Bank of England as the first of a series of measures for public ownership. In 1997, some five decades on, the Blair government reversed this arrangement as its’ first task in office, granting the Bank of England operational independence. Drawing on models of policy change an inductive analysis is undertaken of the factors that brought about these policies to shed light on their analogous nature. This involves the development of a multi-level explanation of policy change which integrates policy transfer analysis with incrementalism and the policy streams approaches. The empirical investigation explores the marginal changes to monetary policy leading to the decisions, the exogenous basis underlying the reforms and issues of economic control and credibility for the Labour Party. It observes that a combination of these dynamics was critical to the ensuing institutional adjustments in the status of the central bank.