Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State
by Paul Tucker
Princeton Press, £27.95
Central bankers have played a huge role in both the economy and financial markets over the past decade, most notably through successive rounds of quantitative easing aimed at preventing economic collapse. However, critics allege that they now wield large amounts of power but lack accountability. Regulators and those who run the growing number of semi-autonomous agencies face a similar problem. In this book, Paul Tucker, a former deputy governor of the Bank of England and now a fellow at Harvard University, examines the rise of this new class of technocrats.
Tucker has picked a timely topic, and he tries to examine it in detail, looking at the differences between the way that Britain, America and Europe have handled the growth of the regulatory state. He searches widely for possible solutions, even looking at the experiences of the judiciary and military to see whether they can provide any answers. While he comes to the conclusion that technocrats are here to stay, he clearly thinks there is something unsatisfactory with the status quo, and makes several wide-ranging and detailed suggestions as to how central banks can take public opinion into account in their decision-making.
Unfortunately the book suffers from two major flaws. First, Tucker spreads himself too thin by discussing government agencies in general, rather than just central bankers. Even though the book runs to nearly 600 pages, its conclusions seem a little superficial. And Tucker doesn’t do himself any favours by writing in a dry and colourless style: at times the book reads like a regulatory document – most readers will struggle to keep reading, let alone engage with his views.
Second, Tucker – who served on the Bank’s monetary policy committee between 2002 and 2013, and was at one point considered the frontrunner to succeed Mervyn King – was obviously at the centre of many crucial discussions. His departure took place at a time when people were starting to ask questions about what the Bank knew about the Libor scandal. So you might expect him to reveal what happened during those crunch meetings during the financial crisis, or at least provide his side of the story. But apart from a few general statements, he keeps his cards close to his chest.
Because of these problems, Unelected Power will be of limited interest to non-academics. This is a pity because the debate over the role of central bankers and how to hold them to account is clearly not going away.