The New Technocracy – Eurozone Financial Governance after the Crisis: Paradigm or Policy Change?

The financial regulatory framework of the Eurozone has passed a process of fundamental institutional change since 2008. Not only policy goals and instruments have altered, but also the underlying paradigm of financial governance seems to have shifted. Particularly the latter aspect has received surprisingly little attention in the current international political economy (IPE) debates. Following the critical juncture in form of a major crisis, agents’ interpretations of the political and economic world system can radically change. When Keynesianism was unable to explain stagflation following the oil price shocks in the 1970s, neoclassical ideas replaced Keynesian doctrines as major policymaking paradigm. The recent Crisis has again laid the ground for a financial governance paradigm change.

This paper conducts a case study of Eurozone financial governance since 2008 and makes three contributions to IPE scholarship. First, this paper develops the typology of the New Technocracy to analyze the “new normal” in European financial policymaking. Three growing main trends characterize the shift to the New Technocracy: internationalization, expertization and scientification. Second, this article argues that, contrary to Blyth (2013), a paradigm change of financial policymaking after the Crisis has taken place indeed. The encompassing implementation of macroprudential surveillance breaks with the neoclassical paradigm, which has been predominant before the Crisis. Third, this article shows that theories of European integration and analyses of paradigm change are not contradictory, but complement each other. Overall, this article contributes to the growing research field of European macroprudential oversight and institutional change in the financial governance policy field.