Whatever Happened to the Balance of Payments ‘Problem’? The Contingent (Re)Construction of British Economic Performance Assessment

Abstract

This article analyses the changing political significance of UK balance of payments assessment in the post-war era, seeking to explain its disappearance as a policy issue today. We demonstrate the historically contingent nature of balance of payments performance assessment by comparing its shifting, conjunctural, constructions, rooted in underlying political economic assumptions, across four periods in the 20th and 21st centuries. We argue that the political salience of UK balance of payments assessment is contingent upon structural changes (both ideational and material) within the global political economy and domestic politics. Changes in the prevailing policy paradigm through which balance of payments was interpreted (for example from ‘embedded liberalism’ to neo-liberalism), and redefinitions of balance of payments assessment techniques, both of which happened on numerous occasions in the post-war world, had the effect of reshaping the nature of the external international political economic constraints to which UK governments were subjected.