Social policy would, in the long run, owe far more to Eleanor Roosevelt’s claim that “everyone has the right to a standard of living” than to Beveridge’s assertion that “management of one’s income is an essential element of a citizen’s freedom”.
Governments will in the end always put voters ahead of prior commitments or external obligations. That democratic imperative has costs and benefits – but, overall, the benefits of popular accountability far exceed the cost.
Financial markets are an effective discipline on profligate individuals and states because markets cannot easily be bullied or lobbied, and their threat to make the cost of funds prohibitive is effective.
From the start, PFI conflated the desirable aim of exploiting private sector management skills in project supervision with the undesirable aim of obscuring public finances with complex funding structures. It created an industry of advisers with a vested interest in its own expansion.
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