The Sustainable Leviathan: Democratic Control and Macroeconomic Credibility

Episodes such as the UK mini-budget crisis and the self-fulfilling sovereign debt crisis in the Eurozone underline that fiscal credibility in advanced capitalist democracies depends not only on economic fundamentals, but on how institutional arrangements coordinate expectations across markets, experts, and publics. Democracies increasingly rely on “institutions of fiscal credibility”, such as Independent Fiscal Institutions (IFIs), Debt Management Offices (DMOs), and fiscal rule regimes, to secure market confidence and stabilise macroeconomic expectations. These bodies now play a central role in how states fund themselves, manage public debt, and justify long-term fiscal choices. Yet despite their growing importance, empirical and theoretical questions about their nature remain unresolved.