Legitimacy Gaps and Everyday Institutional Change in Interwar British Economy

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    Who drives domestic institutional change in the face of international economic crisis? For rationalists the answer is powerful self-interested actors who struggle for material gains during an exogenously generated crisis. For economic constructivists it is ideational entrepreneurs who use ideas as weapons to establish paths for institutional change during crisis-driven uncertainty. Both approaches are elite-centric and conceive legitimacy as established by command or proclamation. This article establishes why domestic institutional change in response to international economic constraints must be legitimated by non-elites and how their everyday actions alter policy paths established in crisis. This is illustrated by re-examining a case frequently associated with punctuated equilibrium theories of crisis and institutional change: interwar Britain. In contrast to conventional explanations, I argue that the "legitimacy gap" between elite and broader public understandings about how the economy should work informed institutional experimentation during the 1920s and 1930s and fertilized the "Keynesian Revolution" of the 1940s.
    Original languageEnglish
    Place of PublicationKøbenhavn
    PublisherDepartment of Business and Politics. Copenhagen Business School
    Number of pages34
    ISBN (Print)8791690145
    Publication statusPublished - 2005

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