In Hungary Viktor Orban adds the EU to his lengthening list of ‘enemies of the state’

Hungarian Prime Minister, Viktor Orban recently denounced the EU’s policies towards Hungary as ‘colonialism’, after the EU suspended nearly half a billion Euro in funding over its massive budget deficit. Abby Innes takes a close look at Hungary’s recent decline from a country known for its reform policies to one which is now mired in economic crisis and increasingly extreme political strategies

The economy and the Conservative manifesto: economic imagination in a time warp

Abby Innes offers the second in a short series of articles on the political economy of the manifesto. Here she considers how the party’s economic strategy is made up of incompatible ideas and paradoxes

The limits of institutional convergence: why public sector outsourcing is less efficient than Soviet enterprise planning

This paper explores UK public sector outsourcing to offer a critique of the theory of liberal institutional convergence. The latter argues that NPM is a case of empiricist scientific rationalism but the neoclassical economics that justifies public sector outsourcing operates with a closed-system ontology of the economy that has more affinities with Stalinist central planning than to empirical political economic science, and this has real institutional consequences. The argument sets out the neoclassical logic behind outsourcing, the unanticipated risks in its conception and the deepening problems with its intensification as practice. It shows how, when we put the market rhetoric of NMP to one side, outsourcing necessitates the central planning of private actors, and the success of this venture hinges on the viability of the outsourcing contract as an effective junction of instruction and control. If there is institutional convergence in New Public Management it is with Soviet enterprise planning. It follows that it is not simply ‘second-best-world’ neoclassical theories that can shed light on outsourcing's chronic failures but also the critiques of Soviet central planning. The latter help explain why incomplete contracts in outsourcing are just the start of bargaining games that the state cannot win

Corporate state capture in open societies: the emergence of corporate brokerage party systems.

Investigations into Central Europe’s emerging party–state relationships—in contrast to those of the former Soviet Union—have focused less on the abuse of public office for private gain and more on patronage and clientelism as political resources. That debate in turn has been bounded by the conventional political science preoccupation with civil society, party, and state relations. This article contends that these conventions have tended to deflect our attention from the contemporary dynamics of political corruption in Central Europe, in which the commercial sector is a major player and the gains of political players primarily private. Building on the assumption that party systemic adaptations are contingent on changing power relations within the political economy, this article offers an ideal typical party model to characterise the behaviour of political parties that preside over the continuous marketization of the state. A “corporate brokerage party” directs its strategic focus to the private sector and acts primarily as a broker of the state’s power in the marketplace, whether expressed through privatisation, regulation, or public procurement. Using the Czech Republic as a critical case study for Central Europe, the evidence suggests that politicians able to direct allocation to the private sector with low regulatory constraints act less evidently as technocratic brokers of the public interest, partisan constituency, or organisation builders and more as private agents

Farewell Whitehall, hello Red Square? On Gove and the ‘privilege of public service’

In a recent attempt to reset the political agenda as the UK comes out of lockdown, Michael Gove gave a speech focusing on Whitehall reform. Abby Innes outlines the similarities between the government’s promised strategy and (failed) attempts to transform the USSR

This general election is a choice between the end of democracy or the end of neoliberalism

In this general election, Britain faces a paradigm shift, argues Abby Innes: the essential choice is between a government of the economic hard right that will complete the already-failed supply-side revolution of the last forty years, and a government willing to implement a Green New Deal that in turn will end the era of Neoliberalism. She writes that we should be under no illusion as to which road offers a future worth having and which a dystopia

Corporate state capture: the degree to which the British state is porous to business interests is exceptional among established democracies

Abby Innes writes that while UK governments have refrained from intervening in the private sector, they enable ever greater business access to public authority and revenue. She argues that successive policies have led to corporate state capture

Draining the swamp: understanding the crisis in mainstream politics as a crisis of the state

This paper examines Poland, Hungary, the UK and the US the most surprising cases of populist reaction. It argues that the social polarization caused by the failures of hyper-liberal reforms to the state, and the association of Social Democratic parties with those reforms, has provoked alienation from liberal democratic politics

First-best-world economic theory and the second-best-world of public sector outsourcing: the reinvention of the Soviet Kombinat by other means. LEQS Discussion Paper No. 134/2018 May 2018

This paper examines how public sector outsourcing has performed in the UK, one of its leading exponents. It sets out the theoretical economic logic behind it, the unanticipated risks in its conception, and the deepening problems with its intensification. It shows how, when we put the market rhetoric of New Public Management to one side, outsourcing necessitates the central planning of private actors, and how the success of this venture hinges on the viability of the outsourcing contract as a fully effective junction of instruction and control. As contract theory tells us, however, the more complex and dynamic the good, the less a contract can guarantee effective control over its production. Moreover, as the critical economics of Soviet central planning teaches us, the resulting asymmetries in information and leverage are just the start of bargaining games that the state (and taxpayer) cannot win. As the paper shows, a state that outsources its complex tasks puts itself at a chronic informational disadvantage, renders itself dependent on poorly controlled private monopoly service providers for essential services that form part of a matrix of interdependent services, and cannot exit failing contracts under acceptable terms. In the USSR a remarkably isomorphic set of hazards had driven Nikita Khrushchev back to the drawing board by 1965

How Labour can fix our broken public services

Labour calls it a “change election”. But how much difference might a Labour government make? In this five part series, Gwyn Bevan, Patrick Diamond, Kate Bayliss, Stewart Lansley, and Abby Innes, set out an agenda that could take the country in a fundamentally different direction. In this third instalment, Gwyn Bevan and Abby Innes argue that besides more funding, the way Labour can improve the country’s broken public services is by improving their governance. Instead of treating public services with a market logic that isn’t suitable to them, the next government should focus of offering the right incentives and rewards for improved performance