Lecture 8 - Neoliberal Transformations of Democratic States

Political rationality, institutional patterns, historical implications

Lecture themes

• The context: understanding neoliberalism and the political logic of neoliberalism

• The state: what is, why it is relevant

  —> Neoliberalism and The state

• Patterns and processes of neoliberal-oriented institutional change

• Technocracy and neoliberalism

• Towards a neo-authoritarian shift?

What does structure mean?

=the stable recurrent social arrangements and institutions (e.g., social class, laws, economic systems, state institutions) that influence or constrain individual actions

What does agency mean? Key examples

=the capacity of individuals – in and through organisations– to act, thus potentially shaping and transforming social structures.

—> Key example: political parties, social movements, transnational corporations, think tanks, etc.

So how is change produced? What is it?

The interplay between structures and agency

Defining Neoliberalism

=”a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterised by strong private property rights, free markets, and free trade” (David Harvey, A Brief History of Neoliberalism, 2005, p. 2)

Defining Neoliberalisation

=”a contradictory, uneven, and variegated process through which neoliberal forms of governance are produced, contested, and transformed across different spatial and institutional contexts” (Brenner, Peck & Theodore, 2010)

So what type of process constitutes neoliberalisation?

A dynamic and adaptive one, it is not a fixed model

What does the term “variegated neoliberalism” mean?

That there are different forms of neoliberalism based on the place

What is neoliberalisation marked by?

By crisis, contestation and experimentation

What is the pre-neoliberal context?

Mass politicisation in the 1960s and 70s

The buzzword: governability

"The advanced industrial societies have spawned a stratum of value-oriented intellectuals who often devote themselves to the derogation of leadership, the challenging of authority, and the unmasking and delegitimation of established institutions, their behaviour contrasting with that of the also increasing numbers of technocratic and policy-oriented intellectuals" (1975, pp. 6-7)

Tackling politicisation, transforming the state

Direct confrontation with Unions, (radical) left-wing parties, social movements, parliamentary prerogatives, ideologies

—> Reducing the space for bottom-up politics and political conflict

• Critique of ideologies: the neoliberal world presents itself as post-ideological, favouring a technocratic approach over conflict and negotiation—even though these are vital and healthy elements for democratic life

• Empowering the State —> Strong State

The state is both…?

1. An institutional apparatus (government, parliament, judiciary, military apparatuses, central bank)

2. A social construction with a certain ideological power (the ‘idea’ of state; e.g. nationalism)

Liberal theories of the state

The state is neutral/autonomous from society

What does the critical approach posit concerning the state?

That the state is always linked to society and – largely– reflects its structurally unequal power relations

A “field'“ of struggles among different power networks

• Power networks "in" and outside the State

• The state is the focal point of political struggles

Transformations of the state —> what does this mean?

=shifts in the hegemonic idea and ideological construction of the state

—> Neoliberal Idea, Social-democratic Idea, Liberal Idea, Technocratic Idea – and so on..

—> =change at the Symbolic/Ideological dimension

Transformations in the state —> what does this mean?

=changes in institutional arrangements (e.g. executive-legislative relations)

The Keynesian state: some key elements

• active role in economic regulation+demand management

• strong welfare state and social redistribution

• public investment as a driver of growth

• parliamentary centrality and mass-politicisation (centrality of political parties)

• full employment as the core objective of public powers

• a mixed economy (a large public sector involved in direct production of goods+services)

The neoliberal state: some key elements

• an active role in enforcing market rules+competitiveness

• retrenchment of welfare and promotion of “individual responsibility”

• private investment and market incentives prioritised

• executive centralisation and technocratic governance

• economics as a criterion of governance

• price stability and fiscal discipline as key priorities

• privatisation and liberalisation of public services

Summarising four key features of the neoliberal state

1. An active state (not minimal)

2. Executive centralisation

3. Technocracy and depoliticisation

4. Permanent economic discipline

1. An active state (not minimal)

• it does not retreat

• it is reconfigured to promote and protect market mechanisms

2. Executive centralisation

Strengthening the executive at the expense of parliament+democratic processes

3. Technocracy and depoliticisation

Crucial decisions are entrusted to technical and “independent” elites (e.g. central banks, fiscal authorities)

4. Permanent economic discipline —> three structural imperatives

1. Austerity

2. Fiscal consolidation

3. Liberalisation

What is technocracy?

=an ideology in which policy must be "evidence-based" and "data driven", without broader political and ideological (or moral, or redistributive) concerns – a positivist approach

What are technocracy’s implications for democracy? Governance

• Independent institutions – removed from democratic control and processes– must play a key role in the definition, oversight, and implementation of public policies.

• Rules-based– array of rules and benchmarks that constrain policy-makers to a specific (neoliberal) policy pathway

  —> Key examples: central banks (e.g. the ECB), independent fiscal institutions, regulatory authorities, and the European Union broadly

In a technocracy, where should experts be placed?

In leadership roles (at the top of national, European, and international administrations)

Technocracy meets neoliberalism

• Shared aversion to democratic politics, conflict, and collective deliberation

• Politics seen as: inefficient, irrational, and ideologically biased

  —> Preference for rules over discretion; procedure over contestation

So, technocracy and neoliberalism each provide what?

—> Technocracy: the form (infrastructure of governance, insulation of decision-making processes, legitimation of authority)

—> Neoliberalism: the content (market logic, efficiency, depoliticisation)

Objective and ‘result’

Shields capitalism from democratic pressures through expert-led, rule-based governance

Three implications

1. the state is reconfigured as a strategic field of technocratic governance

2. Democracy is hollowed out, replaced by governance through expertise and binding rules

3. Democracy is redefined: prioritising efficiency and economic rationality over democratic deliberation and social justice

Italian neoliberalisation: a unique case

• From a parliamentary democracy to an executive-dominated system

• The 1990s as a critical juncture: transition from the first to the second republic

  —> political parties’ crisis

• Empowerment of technocrats in core state institutions

• Strengthening of the executive and the parliament’s marginalisation

  —> exponential increase in decree-laws at the expense of ordinary parliamentary legislations

Three patterns of “technocratisation” in Italy

1. Decisive role of technocrats and technocratic institutions in processes of neoliberalisation– policy-making and ideological legitimation

2. With the crisis of political parties, technocracy as a "collective intellectual" legitimising the neoliberal transition

3. Four technocratic governments:

   • Ciampi (1993),

   • DIni (1995)

   • Monti (2011)

   • Draghi (2021) + increase of experts in position of minister

Political consequences and contemporary crises

1. Crisis of legitimacy of traditional institutions and pro-European governing parties —> Increase of Euro-scepticism

2. Emergence and consolidation of populist and eurosceptic political forces (e.g., Five Star Movement, League)

3. Neoliberal crisis as an organic crisis: permanent political instability and declining consent for traditional political elites

What is the definition of authoritarian neoliberalism?

=”a mode of neoliberal governance that increasingly relies on coercion, executive centralisation, and the marginalisation of democratic processes to sustain market-oriented policies and protect elite interests" (Bruff, 2014; Bruff & Tansel, 2019)

Processes and features of authoritarian neoliberalisation

1. The 1970s and 1980s

2. The 1990s and 2000s

3. Post-2008

4. Post-2020

1. The 1970s and 1980s

The rise of neoliberalism as a reaction to democratic and labor mobilisation (e.g. Pinochet, Thatcher)

2. The 1990s and 2000s

The consolidation through technocratic governance and depoliticisation (e.g. EMU, New Public Management)

3. Post-2008

The shift to authoritarian neoliberalism—crisis of neoliberal consensus, further erosion of democratic accountability, growing reliance on emergency powers, independent authorities, and market discipline

4. Post-2020

Crises (COVID-19, war, climate) reinforce executive insulation and expert-led governance, often under democratic façades

Essentially, what five points are key to authoritarian neoliberalisation?

1. The erosion of representative institutions

2. the expansion of executive and technocratic power

3. the repression or bypassing of dissent

4. the rule by experts and independent agencies

5. the market logics embedded in law and policy

Three structural causes

1. The 2007 capitalist crisis accelerated already ongoing transformations

2. European social democracy's failure to provide credible alternatives

3. State’s growing inability to maintain legitimacy through social compromises (welfare state, collective bargaining)

Three key elements of authoritarian neoliberalism

1. A process through which the state is reconfigured in a less democratic direction

2. Public power utilises legal and constitutional instruments to "protect" (by "insulation") certain policies (e.g., austerity, fiscal discipline) from social and political contestation

3. Shifts from a neoliberalism based on consent (or at least passivity) to one based on coercion and constitutional constraints

Ruling the void - the hollowing-out of Western democracy (Peter Mair, 2013)

• Argues that Western democracies are experiencing a deep legitimacy crisis as political parties (once rooted in society) have become detached from citizens and increasingly integrated into the state

  —> a depoliticised, technocratic form of governance where elite actors prioritise market logic and external constraints over democratic responsiveness

• Neoliberalism narrows political choices+removes key decisions from public debate, citizens disengage —> a hollowed-out political space (a “void”) where democratic structures remain but meaningful participation+contestation decline