Reinventing the Treasury: Economic Rationalism or an Econocrat’s Fallacy of Control?

Abstract

The 1994 Fundamental Expenditure Review (FER) of the UK Treasury was a radical overhaul of organization that had major implications for the way the Treasury conducts its business. This article examines the origins and implications of FER, paying particular attention to the ‘strategic’ philosophy of controlling public expenditure encapsulated within it. Ostensibly an expression of modern economic rationalism overturning outmoded administrative practices, the FER approach to public spending control might alternatively be interpreted as a manifestation of a recurring ‘econocrat’s fallacy of control’ which aims to remove redundancy, random search mechanisms and external veto points from control systems.