The Political Origins of Technocratic Policymaking: The French Socialist Party and Financial Reform, 1982-1986

International political economy literature has stressed the importance of the 1980s as the decade marking the transition from post-war Keynesianism to neoliberal policymaking (Harvey, 2005; Picketty, 2020). A question that remains a subject for debate is why left governments actively participated in this transition. While traditional accounts (e.g. Glyn, 2001) stressed the role of exogenous economic constraints that made social democratic policies increasingly difficult to pursue, a rising and influential literature has stressed the role of epistemic communities of orthodox economists gaining prominence within left parties (Mudge, 2018; Ban, 2016). According to this account, Anglo-Saxon-trained economists with links to international financial institutions gained influence in economic policymaking as Keynesian economists were delegitimised by the “stagflation” crisis of the 1970s. Given the lack of ideological alternatives, they converted left parties to neoliberal precepts of balanced budgets and anti-inflationary politics at the expense of their traditional constituencies, such as low-income groups and trade unions. These accounts are consistent with conceptualisations of technocratic politics as depoliticised and unresponsive to representative democracy (Caramani, 2020; Bickerton & Invernizzi, 2017). However, these accounts of the transition to neoliberalism underplay the fact that expert worldviews only lead to paradigm changes where there is the political will for this to happen – that is, where elected politicians see political usefulness in the ideas being proposed (Hall, 1993; Lindvall, 2006). This paper uses the case of financial reform in France to argue that market-liberal instruments were initially used by the Finance Ministry as new instruments to fulfil social democratic goals after its initial attempt at Keynesian reflation in 1981 failed. For example, anti-inflationary policies were introduced as a means of preserving the purchasing power of lower-income groups, which had significantly deteriorated during the crisis, while stock market reforms were initially conceived as a means of creating job-creating investment. The paper uses Bayesian process tracing to assess policy papers, speeches and newspaper articles of the period to conclude that the evidence favours this hypothesis over explanations stressing external constraints or the power of epistemic communities. Thus, it proposes that left parties facilitated the shift to neoliberal technocratic politics because they initially fulfilled their programmatic goals, generating political buy-in for these policies. An interesting avenue for further research is therefore why they continued down this route once it became clear that these policies were not delivering the expected social outcomes – a question for which the paper will try to give some preliminary answers.