The Regulatory Review
In the United States, the marginal lawmaker in many fields is an unelected technocrat, sitting in a court or administrative agency. This is because the U.S. Congress has powerful incentives to delegate without setting clear goals or objectives, and the Supreme Court has incentives to let such delegations stand if government is to proceed. The effect is to leave judges at all levels with a choice between “deferring” to agency policy or imposing their own.
An issue which many central banks have recently become interested in is how the new technology affects central banks: what central banking is and what central banks do? In 2004, I aired the possibility of the Bank of England issuing e-money at an annual strategy meeting. Since leaving central banking, my preoccupations have been less with substance than with the political economy of unelected power, of which today’s post-crisis central banks are, of course, the epitome. I am therefore going to try to put the substantive issues raised for central banks by the new technology into a political-economy framework. More