The perils of technocratic power

Central bank discretion and the end of Bretton Woods revisited

Bibliographic Data

ID6431080
AuthorsAditi Sahasrabuddhe (0000-0003-4835-6498, Brown University, corresponding author), Jack Seddon (0000-0003-0022-9895, Waseda University)
Year2025
Volume17
Issue3
Pages395-423
Publication date2025-08-19
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueInternational Theory (JOURNAL)
Journal identifiersISSN: 1752-9719 • E-ISSN: 1752-9727
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s1752971925100092
OpenAlexW4413304073
LanguageEN
References cited66

Recent crises have cast doubt on the legitimacy of technocratic power, yet its role in global economic governance remains poorly understood. Revisiting the collapse of Bretton Woods, we propose a dynamic theory of global monetary governance to explain how expanding central bank discretion can destabilise systems. While most studies attribute the postwar system’s failure to power-political struggles, institutional weaknesses, or shifting economic ideas, they overlook the policies designed to manage and stabilise it. Drawing on historical institutionalism, we show how coordination tensions between rule-bound and discretionary policymakers – and the mutually reinforcing adaptation risks they faced – produced responses that appeared stabilising in the short term but ultimately eroded long-run stability. New archival evidence from the International Monetary Fund, Bank for International Settlements, and Organisation for Economic Co-operation and Development reveals how tools like the London Gold Pool and currency swap lines extended central bank power, concealed macroeconomic imbalances, and crowded out political momentum for structural reform. As technocratic authority grew misaligned with political support and functional economic adjustment, it became a liability. In building this theory, we highlight the sociological, agent-level sources of instability rooted in technocratic policy discretion and interpersonal ties among central bankers – challenging the dominant view that technocratic actors are inherently superior in managing global economic policy

Discretion · Economics · Physics · Political science · Power (physics · Technocracy · Global Financial Crisis and Policies · International Development and Aid · Law · State Capitalism and Financial Governance

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