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Mind the output gap: The new technocratic politics of EU fiscal rules in Italy

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  • Locatelli, Camilla

Abstract

The sovereign debt crisis triggered a process of reforms in European economic governance that pushed for technocratic handling of budget decisions following standardized procedures, target measures, and indicators for fiscal monitoring. This shift, aimed at producing more stability and less conflict in budget decision-making, transformed fiscal policy, producing a new type of technocratic fiscal politics. These new technocratic instruments impact on national policymaking, yet little is known about the processes and actors behind their constitution. Scholarship on the policy response to the euro area crisis has highlighted the role of national interests but neglected the role of expertise in negotiating highly technical fiscal policies. A key measure in this new technical apparatus, the output gap, has been at the center of a heated contestation between Italian and European institutions over the 2014-2019 period. Taking the case of the Italian output gap, this paper traces the unfolding of the dispute around the methodology for estimating potential output and clearly reveals the new centrality of expertise. The paper argues that rather than producing a less conflictual policy environment and a depoliticizing of fiscal decisions, technocratic fiscal politics has reshaped discussions around budgetary politics. This reshaping extends and transforms actor constel- lations and venues of fiscal decisions, giving a larger role to technocratic experts.

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  • Locatelli, Camilla, 2024. "Mind the output gap: The new technocratic politics of EU fiscal rules in Italy," MPIfG Discussion Paper 24/7, Max Planck Institute for the Study of Societies.
    • Handle: RePEc:zbw:mpifgd:305293
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    References listed on IDEAS

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    More about this item

    Keywords

    European Union; fiscal policy; Italy; output gap; technocracy; Europäische Union; Fiskalpolitik; Italien; Produktionslücke; Technokratie;
    All these keywords.

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