The New Political Economy of the Macroprudential Ideational Shift

Andrew Baker

    Research output: Contribution to journalArticlepeer-review

    182 Citations (Scopus)
    1331 Downloads (Pure)


    From late 2008 onwards, in the space of six months, international financial regulatory networks centred around the Swiss city of Basel presided over a startlingly rapid ideational shift, the significance and importance of which remains to be deciphered. From being relatively unpopular and very much on the sidelines, the idea of macroprudential regulation (MPR) moved to the centre of the policy agenda and came to represent a new Basel consensus, as the principal interpretative frame, for financial technocrats and regulators seeking to diagnose and understand the financial crisis and to advance institutional blueprints for regulatory reform. This article sets out to explain how and why that ideational shift occurred. It identifies four scoping conditions of presence, position, promotion, and plausibility, that account for the successful rise to prominence of macroprudential ideas through an insiders' coup d'état. The final section of the article argues that this macroprudential shift is an example of a ‘gestalt flip’ or third order change in Peter Hall's terms, but it is not yet a paradigm shift, because the development of first order policy settings and second order policy instruments is still ongoing, giving the macroprudential ideational shift a highly contested and contingent character.
    Original languageEnglish
    Pages (from-to)112-139
    Number of pages28
    JournalNew Political Economy
    Issue number1
    Early online date23 Apr 2012
    Publication statusPublished - Feb 2013

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)
    • Social Sciences(all)
    • Geography, Planning and Development
    • Political Science and International Relations
    • Development


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