Of Paradigms and Power: British Economic Policy Making Since Thatcher

How and why do ruling policy paradigms persist, even in the face of crises or bouts of accumulating evidence that they are not delivering the goods? And how come policy paradigms often undergo significant internal ideational changes instead of it necessarily amounting to a full-blown paradigm shift? Despite the profound impact of Peter Hall’s approach to policy paradigms and social learning, there is a burgeoning consensus that transposing a rudimentary ‘Kuhnian’ understanding of paradigms into the context of public policy making leads to a notion of punctuated equilibrium style shifts as the only game in town. In effect, while Hall’s approach can account for inter-paradigm change with reference to exogenous shocks, it does not allow for significant ideational change to occur intra-paradigm. In order to remedy this, we suggest that the concept of ideational
power be placed more centrally in the study of policy paradigms. To demonstrate the general applicability of our framework, the paper examines the evolution of British macroeconomic policy making since 1990. We show that various Prime Ministers and their Chancellors were able to reinterpret and redefine the dominant neoliberal understanding of the economy to match their own specific ideas and policy priorities, resulting in significant but gradual ideational change.