Description
The recent turn in Constructivist Political Economy towards Practice Theory has highlighted how ideas change and become actionable when operationalised through different practices. When combined with prior studies on the performativity of economic policy, this sheds important insights on how the public nature of these practices allows for expectation management to play a key role in economic governance. However, while much emphasis has been placed on the performative character of monetary policy, less attention has been paid to fiscal policy – which, given the role and public character of fiscal rules, targets, and commitments in neoliberal discourse and practice, entails neglecting how a significant part of contemporary economic governance works. To tackle this gap, this article analyses how ‘fiscal rectitude’ as a norm is operationalised and performed through various policy practices, in which expectations management play a crucial role. It analyses Spain and Italy’s accession to the Economic and Monetary Union (EMU) in the 1990s, using these as case studies of countries that, on the one hand, adapted to a new standard of fiscal rectitude (the Maastricht Treaty’s fiscal requirements); and on the other, despite having opposite public financial situations by the beginning of the process, were maligned in public discourse, portrayed as being fiscally profligate throughout the period of EMU accession. Through archival research of the period’s multilateral surveillance meetings, as well as through policymakers’ own biographical accounts of the process, this article argues that fiscal commitments were reproduced through the production of economic knowledge and of policy commitments, inscribed in programmatic documents. As such, it identifies the substantial epistemic politics at play in the performance of fiscal rectitude, developed through the practices of the EMU’s multilateral surveillance system, and evaluated by various audiences – mainly other member states, Community institutions, the press, and financial market actors.
