The Long Shadow of Econocracy

Introduction

They don’t stand for elections. You won’t see their names trending online either. But economists, more quietly than most, end up shaping some of the most critical decisions that affect all of us. Things like whether a country should borrow more, how much a government can actually spend on health, or which industries must shrink because they’re seen as inefficient. John Rapley, the political economist, once put it best: economics has become the world’s new religion, and economists, the high priests who interpret.

At the Spring 2025 Meetings of the IMF and World Bank, that quiet power became visible, if only briefly. When the U.S. Treasury Secretary, Scott Bessent, told both institutions to “stick to their economic mandates” and back off from broader goals like climate and gender justice, and the IMF followed suit. Years of internal work on those issues were, more or less, shelved. The leadership came back to what it called “core macroeconomic fundamentals”, debt repayment, inflation control, fiscal restraint. At first glance, it looked like a technical correction. But really, it said something far more political.

This is the strange paradox of economic governance today. Economists often say they’re just following the numbers, running models, looking at the data. Yet, as Johan Christensen at Leiden University argues, they’ve become what he calls a “core profession of the state.” That means they aren’t just giving advice. They’re inside powerful bureaucracies, setting the terms for what counts as sensible, and what gets pushed off the table entirely.

But the more this influence grows, the more important the questions become. How did they gain this power? how do economists use this power? And what are its implications?

Rise of Econocracy

It’s easy to think economists rose to power simply because they were the smartest in the room. But that’s not the full story. Their ascent wasn’t natural or inevitable. It came through a slow, structured process, shaped by institutions, ideologies, and a quiet rewriting of what we call common sense. Over time, economics stopped being one tool among many. It became the dominant frame, the language that decides what’s legitimate and what’s not.

Johan Christensen captures this shift in Western democracies. After World War II, economists came in as technical advisers for rebuilding. But by the 1980s, they were no longer in the background. They had become policy architects, especially in finance ministries and central banks. This change was driven by growing faith in economics as neutral and scientific. Neoliberalism helped too. It reframed political questions like taxing the rich or funding education, as problems that needed technical optimisation. “Sound economics” became the new gold standard for “good governance.” In countries like New Zealand and Ireland, Christensen shows how generalist bureaucrats were gradually replaced by economists. These new actors arrived with reformist zeal and a vocabulary of models and metrics. They often overruled local knowledge and democratic input.

A similar shift happened in Asia, and in some places, it was even sharper. Take Indonesia. In the late 1960s, General Suharto leaned on a group of U.S.-trained economists, the Berkeley Mafia. They introduced sweeping liberalisation: opening markets, slashing subsidies, cutting public spending. Their power didn’t just come from Suharto. It came from their Western training and global credibility. As MacIntyre notes, they acted “above politics.” But in truth, they shaped politics deeply, redefining development and deciding priorities.

This idea of expertise as neutrality is appealing. But William Easterly warns that it often becomes a “tyranny of experts.” Economic advice tends to arrive wrapped in the language of necessity. But underneath, it carries political judgments, about whose interests count, what kind of future matters, and which costs are acceptable.

Economists don’t just rely on models. They project authority through how they speak, how they dress, and where they work. Maesse and others show that economists perform credibility. They use charts, jargon, and institutional badges to signal rigour, even when their assumptions are questionable. This creates a hierarchy. A World Bank economist automatically carries more weight than a local NGO researcher, even when making the same argument.

The media helps sustain this. Research by Mellado and colleagues shows that journalists often turn to economists for “objective” views, even on debates full of values, like welfare or environmental justice. Economists become default explainers. They break down complex issues using GDP or inflation. But this narrows the debate. Those who speak from lived experience or moral tradition are pushed aside.

This is what Cahal Moran, Joe Earle, and Zach Ward-Perkins call the “econocracy.” It’s a world where economics replaces democratic debate. Universities play a key role. As the authors argue, economics education has become depoliticised. Students are trained to solve neat puzzles, not to ask critical questions. When they graduate, they’re ready to answer “how much” or “how fast”, but not “for whom” or “why.” They’re taught to treat politics as noise. The economy becomes a machine. Dissent becomes irrational. This thinking continues into their careers. They enter think tanks, global agencies, and regulators. And there too, policies are crafted using equations, not ethics.

One clear example of this shift is the rise of central banks. Once low-profile, they now sit at the heart of economic policy and often operate outside democratic checks. As Marion Fourcade shows, this is part of a larger pattern. Economics has become a global profession, with common norms and authority structures.

The steady global rise of central banks marks the growing institutionalisation of economic authority. Credit: Marion Fourcade, Berkeley; The construction of a Global Profession: Transnationalisation of Economics.

This narrowing of perspective has real effects. During the early months of the COVID-19 pandemic, UK economists warned against taking on more debt. The government delayed lockdowns and spending. A 2021 parliamentary inquiry called it one of the worst public health failures in British history. Sweden followed a similar logic. Economists assumed people would act rationally without mandates. But the virus spread, and deaths rose far above those in neighbouring countries. In the U.S., economists in the Trump administration resisted large stimulus plans. They believed markets would self-correct. But unemployment soared. In Asia, similar debates played out. South Korea managed to contain the virus early on. But proposals for stronger support to low-income workers were blocked by fiscal hawks. In Japan, the Ministry of Finance hesitated on ccash transfers, even as economic distress grew.

Despite these missteps, economists haven’t lost influence. Why? Because they’ve redefined “credibility.” Fourcade and others found that the public sees economists as more trustworthy than politicians, even when their advice fails. Their power doesn’t come from elections. It comes from status, institutional roles, and fluency in numbers. Global imitation adds to this. Countries don’t just adopt reforms under pressure. Often, they do it to appear modern and competent. As Dani Rodrik notes, reform trends spread faster than their results can be evaluated. Leaders bring in economists to send a signal to investors, donors, or other governments. Economists become symbols of rational statecraft.

So, what’s happening here isn’t just about who holds the job. It’s about how authority itself is changing. Economists are no longer backstage advisers. They’re often the final word on what’s “serious” or “sensible.” Economic thinking has replaced older ways of talking about justice, care, and solidarity. The rise of the econocracy isn’t just about expertise. It’s about the quiet erasure of politics itself.

How the Multilateral Organisations Extended Economists’ Power

Perhaps the clearest example of how economists came to shape not just ideas but outcomes was the structural adjustment era in the 1980s and 1990s. Debt crises swept through Latin America, parts of Africa, and much of Asia. Governments were desperate. And so, one after another, they turned to the IMF and World Bank.

Help was offered, but not without conditions. These weren’t just any loans. They came attached to sweeping economic reforms: devaluing currencies, cutting public subsidies, reducing the size of the state, opening up to foreign trade, and tightening public finances. Each of these steps was justified as economically sound. The argument was that these measures would help fix balance-of-payments problems, restore investor confidence, and eliminate inefficiencies.

But that’s only one side of the story.

The human cost was steep, often devastating. Social protections were stripped back. Inequality widened. Elected governments saw their space to manoeuvre shrink.

And who designed these blueprints? Not politicians. It was economists, most of them trained in elite U.S. universities or closely linked to international institutions, who were now setting the rules.

Sociologist Marion Fourcade describes this shift as the rise of a global economic elite. They weren’t united by nationality but by training, credentials, and a shared outlook rooted in Anglo-American economic ideas. They spoke the same technical language. They valued the same “indicators.” And most importantly, they were treated as the final word on what counted as rational policy.

But this wasn’t just about individuals. The spread of central banks tells us something deeper. Since the late 19th century, these institutions have multiplied. And after 1945, their growth exploded. Most of them are kept at arm’s length from public accountability. Yet they control interest rates, inflation targets, even employment goals. In many ways, they became the institutional face of technocracy. They are the infrastructure of what many now call the depoliticisation of economic governance.

Picture 1706679381, PictureImage: The international spread of economics as a profession reflects its consolidation as global orthodoxy. Credit: Marion Fourcade, Berkeley.

This world didn’t collapse after the 2008 crisis. In fact, it became even more entrenched. The global financial crisis caused enormous disruption, bank failures, evictions, mass unemployment. People were angry. And for a moment, it seemed like the credibility of economists might finally crack. How could they not have seen this coming?

But oddly, the opposite happened. Economists were brought right back in to fix what they hadn’t prevented. Central banks got more powers. New layers of regulation were added. In places like Italy and Greece, unelected technocrats were brought in to lead governments, on the assumption that economic expertise mattered more than political mandate. “Confidence” and “stability” became the language that drowned out all dissent.

COVID-19 did disrupt this pattern, but only briefly. Faced with a global health emergency, governments across the world suspended the usual rules. They paused austerity. They spent money. And they spent big. For once, the priorities were clear: public health, basic welfare, livelihoods. Many economists hesitated. They warned against runaway debt. They feared inflation, moral hazard, unsustainable deficits. But public pressure and sheer urgency forced states to act. And here’s what’s striking: the doomsday predictions didn’t come true. Governments pumped in cash. Benefits were extended. Central banks bought bonds like never before. And yet, the sky didn’t fall.

Still, as soon as the crisis eased, the old playbook returned. By 2021, the IMF was once again talking about fiscal consolidation. Reports urged governments to start planning for debt reduction. Pandemic-era welfare schemes, they said, had to be rolled back. Meanwhile, voices from healthcare, education, and climate action asked for continued investment. But those voices were drowned out. Once again, economic discipline took centre stage.

And in the Global South, this return was even more unforgiving. Zambia, Sri Lanka, Argentina, all found themselves in new IMF deals. And like clockwork, the conditions followed: cut spending, reduce deficits, restructure debt. None of this was new. Ghana had seen this script in the 1980s. Back then, the IMF had advised sharp currency devaluation, large-scale layoffs, and subsidy removal. Rural economies crumbled. Education became harder to afford. But these outcomes were treated as unfortunate side effects, regrettable, perhaps, but necessary. The same story played out in Pakistan in 2022. To qualify for an IMF bailout, the government was required to slash fuel subsidies, at the exact moment inflation was hitting poor families the hardest. Again and again, countries have had to make the same trade-off: set aside domestic priorities, whether jobs, food, or healthcare, for the sake of macroeconomic “stability.” That word, stability, hides a great deal. What it usually means is investor confidence, currency discipline, and reduced deficits. But it rarely includes equity, human dignity, or long-term development.

And who defines this version of stability? Not the public. Not elected leaders. But experts. Economists. Often not even from the country concerned. They sit in Washington, or Paris, or London. And they decide what is acceptable. This is not just a technical question. It’s a political one. Who gets to decide what a country can or cannot do? Who has the right to draw the boundaries of the possible? When unelected experts start taking those calls, we have to ask, what happens to democracy?

Why It Matters

You’d think that with all the noise around populism, anti-elitist rhetoric, distrust of institutions, economists would find themselves on the defensive. That hasn’t really happened. If anything, they’ve stayed put. In many cases, they’ve just shifted slightly, adjusting their language without changing much underneath. Populism, it turns out, doesn’t always replace the economic orthodoxy. Often, it just bends around it. Experts across regions, Europe, Asia, Latin America, have observed the same thing: short-term boosts in spending, some louder calls for redistribution. But the basic rules stay the same. The same benchmarks. The same gatekeeping logic.

Picture 242162396, Picture Redistribution and short-term spending are the most common global impacts of populism. Boumans, Dorine (2017): Does Populism Influence Economic Policy Making? Insights from Economic Experts Around the World.

And that logic runs deeper than people realise. It’s not just that economists influence policy. It’s that they shape the way we talk about policy in the first place. The vocabulary. The assumptions. The categories we think in. Take something like welfare. It used to be about rights, about justice. Now it’s about whether we can “afford” it. Whether there’s room in the fiscal “space.” Language like that, once it becomes normal, starts to change everything.

Because once you start talking like that, other things get pushed out. Questions about fairness, about harm, about who gains and who loses, they don’t go away, but they get harder to ask. Not because anyone banned them, but because the frame has shifted. Redistribution becomes a risk. Demands for jobs or social investment sound irresponsible. Even harmful policies, ones that leave people worse off, get framed as “necessary reforms.”

The most powerful kind of influence isn’t when someone tells you what to do. It’s when they convince you that other choices don’t exist.

That’s where the model comes in. Once a spreadsheet tells you something is “unsustainable,” most people stop arguing. They don’t ask what’s behind the formula, or whether the assumptions make sense. They just take it as a limit. A rule. And that’s the quiet power, when policy paths get closed off before they’re even voiced.

And it doesn’t just affect governments. Even well-meaning leaders find themselves boxed in. Central banks, credit rating agencies, market pressures, they all create a corridor. Not one with walls, exactly, but with warnings. Step outside and you risk panic, downgrade, and, capital flight. So even when people want to do something different, they’re told “we can’t.” Or worse, “we shouldn’t.”

Over time, that builds up into a kind of resignation. You see it in technocratic language, how officials talk about trade-offs, how they justify cuts or delays. They’re not bad people. But they’ve been taught to think within a system that feels neutral, even when it isn’t.

And here’s the kicker: economists often believe in the neutrality too. They’re not trying to be ideological. But as Algan and others have shown, many economists trust their models too much. They believe in the universality of what they’re doing. But assumptions don’t always travel. What works in one context may fall flat in another. And when it does, the fallout isn’t theoretical. It’s real. Still, the models spread. Goutsmedt is right, central banks and expert agencies don’t just apply knowledge, they define what knowledge looks like. And because the templates mostly come from the West, countries in the Global South adopt them not because they always work, but because they’re expected to. They make you look credible. They speak the right language.

That’s the paradox. It’s not that economics is detrimental. It’s that it’s become too narrow. Too closed. Too sure of itself. What we need isn’t less economics, it’s more room for debate inside it. More pluralism. More discomfort. Less pretending that politics can be optimised away.

Because in the end, the real question is: who decides what matters? If those decisions happen outside democratic spaces, wrapped in technical language, we’re not just losing policy fights. We’re losing the ability to ask the right questions.