Technopopulism and Central Banks

23 Pages Posted: 21 Apr 2021

See all articles by Carola Binder

Carola Binder

Haverford College - Department of Economics

Date Written: April 9, 2021

Abstract

In recent years, warnings of a populist threat to central bank independence have proliferated. These warnings are based on a deep-seated antagonism between technocracy and populism.

I argue that to understand current challenges for central banks, we should question the assumed antagonism between populism and technocracy. Political scientists Chris Bickerton and Carlo Accetti (2021) claim that advanced democratic states today are in a technopopulist age, “increasingly ordered around the combination of appeals to the people and to expertise and competence” (pg. 157). This paper discusses central bank independence in the technopopulist age. First, I describe the inherent tension around the role of expertise in a democracy, and how this tension has been approached in the delegation of monetary policymaking to independent central banks. Next, I discuss the transition from an era of ideological political logic to the current era of technopopulism. Then I explain how the technopopulist influence is especially evident in recent pressures on central banks, changes in central bank communication, and recent amendments to the Federal Reserve’s longer-run strategy. An important point is that under technopopulism, populists do not reject technocratic expertise, but instead rely on it to translate their causes into policy. Central banks thus face pressure to use their technocratic discretion to do more to serve the people, and to be directly accountability to the people rather than to elected representatives. In return for greater responsiveness, they gain even greater power and discretion.

Keywords: Federal Reserve, central banks, central bank communication, populism, technopopulism, discretion, democracy

JEL Classification: E30, E40, E50, E52, E58

Suggested Citation

Binder, Carola, Technopopulism and Central Banks (April 9, 2021). Available at SSRN: https://ssrn.com/abstract=3823456 or http://dx.doi.org/10.2139/ssrn.3823456

Carola Binder (Contact Author)

Haverford College - Department of Economics ( email )

Haverford, PA 19041
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
9
Abstract Views
65
PlumX Metrics