Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

Introduction fundamental human rights to which everyone is Four years into the global economic crisis, entitled on the basis of their inherent dignity. political and economic malaise continues to While broad swaths of society are affected by besiege the eurozone and the US, the rising austerity measures, evidence shows that Eastern powers are stumbling, economic growth women, children, older persons, ethnic across the Southern hemisphere sputters, and minorities, immigrants, people with disabilities worries of a repeat global economic recession— and people living in poverty suffer if not full blown depression—continue to disproportionately. The enjoyment of human unsettle people the world over. rights, in other words, has all too often become While different countries and regions have been the foremost casualty of the “Age of Austerity.” affected in different ways, the successive waves Despite evidence to the contrary, several myths of the global economic crisis since 2008 have plague mainstream debates over the enduring led to an austerity-driven “Great Regression” in human consequences of the global financial and human rights around the world. Massive and economic crisis. This briefing challenges eight prolonged unemployment and job precarity, widespread yet misguided perceptions about rising levels of hunger, homelessness and food economic policy in times of crisis, and suggests riots, deprivations in access to adequate health a series of human rights-centered economic and education, greater income inequality, policy alternatives for governments to urgently significant cuts in basic social protections, consider in order to address the dark flipside of growing xenophobia and discrimination, sharp austerity-driven cutbacks—a deepening increases in suicide rates across Europe, and economic and social rights deficit. mounting social disintegration have emerged Economic policy is public policy and therefore from the wreckage—undermining not just the subject to international human rights law. realization of human rights, but their very Economic policy choices are a reflection of a recognition as fundamental norms to guide government’s efforts to uphold its duties and economic and social policy. Austerity seems to obligations to human rights, particularly have permeated the core of economic policy- economic and social rights, in accordance with making in many countries across the world, its own constitutional and international treaty where many governments have reversed their commitments. Human rights norms, standards previously expansionary crisis responses in and principles also provide a programmatic 2009 and 2010 by cutting back through 2011 framework and operational redlines for and into 2012, even in the midst of economic economic policy-making. Investing in people in malaise. Cuts have been widespread, including line with international human rights norms and de-funding health, education and other social principles is not only legally compelling and services, reducing grants to employment morally right. It can also work to pull our services, and in some cases reducing social economies out of the trappings of ever deeper, protection, unemployment insurance and older austerity-driven recessions—what Nobel persons’ pensions. These programs are taken as laureate Amartya Sen called a “spiralling mere collateral damage in the quest for catastrophe.” economic recovery, rather than what they are—

Rights in Crisis Series Briefing Paper | July 2012

Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

Myth #1: Governments the whole are symptoms and consequences of crisis, in other words, not the cause. caused the crisis through runaway public spending. Going deeper and beyond these symptoms of the crisis, then, what were the structural and

Governments, according to this pervasive myth, root causes of the 2008 financial crisis? are at fault for the economic collapse because of Although the origins of the 2008 financial crisis their profligate overspending which led to are myriad, two underlying structural causes are unwieldy deficits, the crowding out of private broadly cited. First, successive waves of de- sector initiatives and thus widespread economic regulation of financial activities is widely malaise. In the EU context, some argue, it was agreed to have been a major contributing factor. the fiscal indulgence of the so-called “Profligate By gutting the previous set of post-Great Five” —Ireland, Greece, Spain, Portugal and Depression rules of transparency, anti-fraud, Italy—which drew down the whole regional basic exchange-based and other macro- economy. Government overspending being the prudential regulations needed to prevent diagnosis, deep cuts to public expenditure— systemic financial crisis, and failing to ensure “slimming the State”—is considered the systems of meaningful accountability, obvious cure. So goes the conventional analysis governments in many regions opened the door of EU economic policy-making, as most for an aggregation of individual abuses which recently captured by the EU Treaty on Stability, eventually contributed to a systemic melt-down. Coordination and Governance adopted by 25 EU States in February. This Treaty obliges all A second broadly-cited cause of the financial signatory States to enshrine a permanently crisis was in full play in the lead-up to the 2008 balanced budget, or face exclusion from future meltdown: growing income and wealth crisis financing from the European Stability inequality. The story reads like a perfect storm. Mechanism. The ceiling for annual structural In the three decades preceding the crisis, the top deficits, set at 0.5 per cent of GDP, can only be 1 per cent of income earners in the US—the raised in a severe economic downturn or other epicenter of the 2008 financial crisis—doubled “exceptional circumstances” to be defined by their share of national income to almost 16 per the European Court of Justice in Luxembourg, cent—the highest level of inequality of wealth which would also have the new right to fine distribution since 1929 before the Great Crash. governments whose deficits rise above that As top income earners reaped increasing gains deficit ceiling. from economic growth, relatively little of their wealth went to creating demand for goods and services, but instead was funneled into Did you know? de/under-regulated, high-risk, shaky investments such as derivatives. Low- and In fact, in contrast to this popular myth, in most middle-income households who faced cases today’s high public deficits do not stem decreasing purchasing power over the same from overspending. None of the 12 eurozone period, meanwhile, had to either limit their members in the eight years before the crisis, for purchases (“belt-tightening for people who example, were in any significant debt, except cannot afford belts” in Jeffrey Sachs’ apt Greece. Two of the hardest hit countries— adage), or go deeper into debt. For those with Ireland and Spain— in fact had budget credit available, especially in their homes, the surpluses, in stronger fiscal positions than solution was a no-brainer. Household debt France, Germany and Austria. Existing debt in levels skyrocketed, doubling in the 1980s to most crisis-affected countries, in contrast to the over 100 per cent of GDP before the crisis myth, came as a direct result of the 1) bank broke. bailouts to rescue the private financial sector from bankruptcy, 2) crisis-induced reductions in This combination of skyrocketing household revenue collection, and to a lesser degree, 3) debt on the one hand, and ever-riskier and un- necessary economic stimulus programs, some supervised investments on the other created a of which paid for themselves through benefits toxic cocktail that we are all still struggling to to the larger economy. The existing deficits on

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses recover from. It was the combination of this Myth #2: Deep cutbacks, rapid accumulation of capital at the top, and the simultaneous explosion of debt at the bottom, especially to expensive which generated a level of intense financial social entitlement programs, fragility and risk not seen since the Great Depression. This was a key impetus to the are the only way to fix the financial crisis as soon as debts became deficit, calm the markets unsustainable and debt defaults began, according to International Monetary Fund and thereby revitalize the (IMF) researchers and the UN Commission of economy. Experts on Reforms of the International Monetary and Financial System led by Nobel Starting in 2010, governments across the world prize winning economist, Joseph Stiglitz. sharply cutback in public spending fearing that climbing deficits would startle bond markets. Yet, the fiscal austerity policies adopted in Deficit hawks re-gained the edge, arguing for many countries today wrongly see deficits as the need to “cut the way to growth.” According the biggest short-term problem, rather than to this popular myth, high budget deficits— financial regulatory failures, epic levels of regardless of their origins—suggest to investors inequality and anemic demand for goods and and creditors that governments aren’t able to services—the ultimate pillar of growing repay their outstanding bonds obligations. This employment and revenue generation. The leads to escalating costs to finance the debt slashing of public expenditure in healthcare, (interest rates), which purportedly suppresses education, social protection and job programs economic growth and employment generation. required by these policies is making ordinary The best way to restore confidence amongst people pay disproportionately for a budget anxious investors and creditors, according to crisis they had no hand in creating. An this position, is to “calm the markets” by austerity-driven, double-dip recession is now all decisively cutting public spending (especially but upon the European Union (EU)—an on social “entitlement” programs which create austerity trap expected to spawn ever-higher debt burdens for generations) to urgently pay unemployment, fewer revenues for down the deficit, regain the trust of bond governments, and justification for further markets, lower interest rates and thereby cutbacks in social services precisely when they increase economic growth. The “cut to grow” are most needed, with ramifications across the fever has caught fire, with many low- and globe. middle-income countries joining the headline countries in Europe and the US to cut public Human rights responses expenditure, at times excessively, on the assumption that austerity will drive growth. The A human rights-centered alternative to IMF, despite warnings against excessive austerity-driven recession would move beyond austerity from its new managing director simply treating the symptoms of the enduring Christine Lagarde and from its own recent financial and economic crisis to address some reports, has not strayed far from this line, of the structural causes—chief among them, advising many countries to cut budgets in dire financial de-regulation and income inequality. economic circumstances, according to UN Governments’ duties to protect human rights reports. through adequate financial regulation, on the one hand, and to fulfill human rights through Did you know? more expansionary and more equitable fiscal and monetary policies to combat income In practice, however, evidence shows that when inequality and stimulate decent work in times of the economy is sputtering these types of “cut to crisis, on the other, are essential now more than grow” approaches to fiscal policy are ever. dangerously self-defeating in that they often worsen the deficit level problem they attempt to solve. Governments from the UK to Ireland to

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

Portugal, Spain and Greece have tried to calm hole, a never-ending austerity trap governments bond and financial markets by slashing their across the world, none more than in certain EU budgets in draconian fashion. Yet, the interest governments, seem intent on verifying. As rates on their bonds have in many cases conservative British economist Lionel Robbins increased. In each of these cases, growth once admitted in the 1930s, these types of prospects are actually worsening as a result, as austerity policies are “as unsuitable as denying lower levels of growth and higher blankets and stimulants to a drunk who has unemployment coming as a result of public fallen into an icy pond on the ground that his cutbacks decreases tax generation, making the original trouble was overheating.” fiscal crises even worse. In both Greece and Ireland—poster countries for the “cut to grow” Even for deficit hawks, history shows that the school—austerity policies demanded in their best way to pay down deficits is by getting the agreements with the Troika—EU, European economy moving again by creating more and Central Bank (ECB) and IMF—arguably better-paying jobs. In times of recession, this shrunk the national economies, compelling their can best be done through economic stimulus governments to repeatedly adjust growth (and policies which invest in human and productive thus revenue) forecasts downward. As the assets which can battle inequalities while economies slow and revenue becomes scantier, driving growth. These can include monetary budget targets are ever harder to meet, and policies to lower interest rates, but also fiscal interest rates on bonds tend to rise, soliciting policies which increase public spending in even deeper budget cuts. Greece’s debt to GDP downturns (also called counter-cyclical ratio, for example, was 130 per cent in late policies). Although it may seem 2009. In late 2011, after two years of severe counterintuitive at first to actually increase austerity measures, it had risen to over 160 per deficit spending during downturns, higher cent. After years of fiscal entrenchment, growth public spending in the midst of a recession can has continued to suffer in Ireland. Spain is the make up for the drop in private sector spending latest casualty of the austerity trap, as its 2012 and stimulate the economy, especially if public budget slashing is set to reduce GDP in invested smartly in economic and social rights the country by 2.6 per cent according to the programs which simultaneously build long- government’s own estimates. Spain’s lasting social and economic assets while also borrowing costs, meanwhile, continue to soar. boosting the spending capacity of low- and Even the OECD—not exactly a bastion of middle-households whom have a higher heterodox economics—stressed that “eurozone propensity to spend than richer households. The policy makers have to look for growth policies resulting increase in tax revenues from growth to offset fiscal austerity.” Given the can then be used to pay down the deficits over interdependence of the global economy, the medium term. UNCTAD is openly disquieted that EU austerity policies threaten a global recession. In late 2011, many mainstream economists began to speak out against budget austerity and Austerity as a driving factor in economic for further economic stimulus, such as Douglas downturns and fiscal deficit is not merely Elmendorf, the director of the US circumstantial to Europe in 2012. “Austerity Congressional Budget Office, Cornell has never worked,” in the words of Cambridge University economist Robert Frank, Indian economist Ha-Joon Chang. Historical evidence, economist Deepak Nayyar, UC Berkeley including from the IMF, suggests cutting economist Brad DeLong, Harvard University budgets during economic recessions has a economist and former director of the White tendency to actually increase deficits while House National Economic Council, Lawrence deepening and prolonging the recession, Summers, and economist Nouriel Roubini. As worsening unemployment levels and extending economic conditions deteriorated across the the time economies take to fully recover in eurozone, the US, India and China into mid- economic terms. Public budget-cutting in the 2012, a deeper political shift against budget midst of an economic recession is tantamount to austerity has gained momentum, as seen in digging oneself deeper and deeper into the same elections in France and Greece. By the June

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

2012 G20 summit, the US and other members Myth #3: But deficits are had begun to formally call for less austerity, putting Germany increasingly on the defensive problematic. Just like as it continues to call for austerity as the individual households and solution to the crisis. companies, governments Human rights responses must live within their means.

Contrary to the “cut to grow” myth, countries Just as families and firms need to live within have often paid down their high deficits only their means to avoid the scourge of financial after economic growth rates, decent condemnation, so too—this misplaced employment and tax collections resume. In assumption goes—must governments be addition to traditional economic stimulus constrained in the same way as the rest of us. policies, governments can also invest in social Relying on borrowing to spend too easily opens protection and unemployment insurance to the door to insurmountable levels of debt and stimulate growth. By putting resources into even government default, with very real human people’s pockets, especially those more likely and economic consequences. Living better to affect economic demand through spending, today, this myth asserts, should not come at the social protection programs can have a expense of our children tomorrow. stimulating effect on the economy, particularly in times of recession. Low-income households Did you know? already facing deprivations in income and opportunity are most likely to demand their Public deficit financing, in fact, is not at all like basic needs are met, and can be powerful agents individual household or company debt. As to stimulate their own economies from the elegant as it sounds, national governments don’t ground-up by creating the sustainable have the same types of financial constraints as conditions for the economy and government households or companies. The simple analogy revenues to recover, at which point budget between sovereign governments on the one deficits can be addressed. Similarly, evidence hand, and households and companies on the shows that improving early-childhood nutrition other is based on some misunderstandings about can boost GDP by two to three percent in poor how modern monetary policies generally work. countries. UNICEF meanwhile has found that increased learning achievements in children can First of all, government creditors cannot simply increase a country’s long-term overall growth break up governments and sell their assets to rate, and a girl’s future wages by between 10 recover any losses, as other types of creditors and 20 percent with every extra year of primary can. This means at the end of the day a school — with long-lasting waves of benefit to government almost always has the upper-hand her broader family, community and economy. in debt negotiations. Second, businesses and households obviously do not control the money In sharp contrast to the “cut to grow” myth supply—an authority we vest only in sovereign which claims budget austerity is the only States, and in some cases groups of States like solution, evidence suggests that investing in the EU. And lastly, several common-place ordinary people through social and economic flexible financing practices of modern central programs, particularly when prioritizing social banks are simply unavailable to family and protection floors—affordable to even the business planners. They can and often do poorest countries—can support the enjoyment “create” money at their central banks, for of economic and social rights, while example, use this money to buy bonds from simultaneously adding the badly-needed fuel to their finance ministries, and in turn those help rouse and balance our global economy on ministries use the money from the bond sales to the brink of recession. finance their deficits. The interest that is paid to the central banks which purchased the bonds is then refunded to the finance ministry at the end of the year, thereby generating resources for

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

governments to use to finance their deficits. far from a causal phenomenon. It may well be This approach has long been widely used by that slow growth causes high debt. Japan, the US and many other countries. While common among most modern central banks, Secondly, successful and sustainable deficit this type of flexible financing by national financing often improves future economic governments is something that individual productivity, and therefore more than pays for households and companies obviously cannot do. itself over time through increased tax revenues. You see, not all deficits are created equal. High Deficit financing in moderation is, in fact, a levels of deficits developed to invest in long- standard and important economic policy tool lasting social, economic and cultural assets in which has allowed governments worldwide the one place are not the same as deficits incurred ability to maximize resources and invest in to no end in another. The real issue determining current and future human and economic the sustainability of a country’s debt, in other potential. Like any tool, there are certainly risks words, is the end-use of government of abuse. Excessive deficit financing can expenditure. Government borrowing is burden governments and their people with sustainable if it is used to finance investment, unsustainable levels of debt which eat up space and if the rate of return on such investment is in national budgets which could be better used greater than the interest rate payable. Therefore, to invest in economic, social or infrastructure debt used sensibly and productively over the programs. Prolonged deficit financing can also long term to create things of increasing value produce inflation when an economy is operating into the future (especially investments in human at or near full capacity or employment. The risk and other productive assets) can boost of inflation, however, is very low during productivity and growth. economic slumps when there is a large amount of underused capacity in the economy (factories Deficit hawks like to argue that the pain sitting idle, investment capital not being used inflicted by austerity measures in the short-term by companies, etc.), high levels of will provide real long-term gains by controlling unemployment, and general deterioration in the deficits and instilling confidence in financial productive and human potential in the markets. They argue that future generations economy. should not suffer from our current government largesse. But this myth misses a key part of the The two most important factors to successful, picture. The social, economic and political well- sustainable and equitable deficit financing is the being of future generations depends on the type interest rate at which governments borrow, and of society, economy, and government which we the purposes for which the deficit spending is build now—one which has progressively used. First, on interest rates. The main way invested in essential educational, health, governments borrow money is by selling bonds housing and decent work programs, or one to be repaid at a later date. Debt servicing in the which is permanently under-resourced, under- future is not a problem as long as interest rates capitalized, and crippled by the downward on borrowing remain low. Some of the spiral of deepening deteriorations of physical, wealthiest nations of the world, with the highest ecological, technological and, perhaps most standards of living, often go for decades at a importantly, human capabilities. time servicing very large national debts. Belgium’s outstanding national debt, for Human rights responses example, is valued at almost 100 percent of its GDP, and Japan, the global leader today in If governments engage in deficit spending to deficit spending, currently has a debt-to-GDP- achieve higher levels of decent, well-paid ratio of 226 percent. Yet these remain strong employment, equitable economic growth and economies with high standards of living, and thus increased tax revenues over the longer run, relatively low interest rates. While there is some and do so at affordable interest rates, then there evidence that countries with high debt grow is no reason why the actual level of deficit slowly, new empirical studies show that this is spending (as a per cent of GDP) should in itself be a problem. Targeted, transparent and

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses accountable deficit financing in this respect Did you know? shouldn’t be seen as shameful, but taken for what it is: an essential tool in maximizing the The central banks and banking regulators of the resources available for the fulfillment of human US, UK and Europe on the one hand, and the rights. In one way, then, governments are like IMF on the other were disastrously wrong about households—they need to weigh both sides of the basic “efficient market hypothesis,” which their balance sheet. Deficit financing creates stated that private financial actors should not be liabilities and assets. The real question is what regulated because, out of a sense of self- you get for what you spend. Governments interest, they would not risk over-leveraging which borrow to invest in programs with a real themselves. As mentioned above, these return in social, environmental or economic institutions neglected to take meaningful steps terms are doing a service to their people, just to address the growing threats posed by the high like a family who takes out a loan to put their levels of over-leveraging in financial markets in child through school or pay for a life-saving the years prior to the financial crisis, despite medical procedure. Generating resources to many warnings from influential economists. efficiently and equitably invest in people— What’s more, most of the central banks and through education, healthcare, social services financial regulatory agencies effectively and other fundamental human rights—and the supported much of the comprehensive financial environment can boost the overall human, de-regulation and failed macro-prudential economic and ecological assets of the economy, oversight alluded to previously. essential for both increased productivity and human dignity. If these institutions could have been so wrong on such fundamental issues, there is little reason to have confidence they are correct today about prioritizing inflation-targeting over Myth #4: The leading central employment-support and financial regulation in banks, international financial the midst of a slow recovery and low inflation. The US Federal Reserve, the UK Exchequer institutions, credit rating and the European Central Bank, for example, agencies and other could all take more pro-active steps to address economic policy makers are the current recession by allowing more flexibility in the inflation rate in rich countries neutral expert bodies. as a way to incentivize companies holding trillions of dollars in capital to begin investing This myth assumes the regulatory, oversight and hiring – as suggested by IMF chief and assessment functions of our central banks, economist Olivier Blanchard and others. The international financial institutions and other leading central banks have so far refused to act economic policymakers are being carried out more boldly. Although these entities are often effectively, impartially and legitimately because shrouded in a mystique of infallibility, people these experts know best about complex fiscal have little reason to accept their claims on face and monetary matters. The world’s largest and value, and should instead take their policy most influential credit rating agencies advice with skepticism while considering all meanwhile claim to be objective and other possible alternatives. nonaligned arbiters of the financial performance of businesses and governments. We should trust The questionable authority of the private credit- their technical expertise, it is assumed, and rating agencies, meanwhile, also played a accept that their assessments serve as the significant role in the making of the financial backbone for decision-making on the global crisis which sparked the current global financial economy as few else understand its economic crisis. By giving AAA-ratings to complexity from the inside. many of the mortgage-backed securities structured in the shadow banking system (non- bank financial institutions), these agencies encouraged investors (including pension funds

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

and other socially-minded bodies) across the imbalance and lost jobs at home? Why has the world to buy enormous quantities of what later US, UK, the IMF and the ECB prioritized turned out to be "toxic" and worthless assets. pushing the costs of bank bailouts onto citizens Why would credit ratings agencies make such in the form of cutbacks in public expenditure bad judgments? It’s a simple question of who and increased deficits over supporting debt pays the piper, according to experts. The fact restructuring? Arguably, the answers to such that credit rating agencies were paid by the very questions have much more to do with politics, owners of the assets they were rating led to policy capture and the political power of conflicts of interest in which the raters were financial interests than they do with basic prevented from giving impartial, reliable insights and principles of economics or grades. Today, the three major credit ratings econometric models. Even researchers within agencies are joining the army of deficit hawks the IMF have admitted as much in a stinging by reinforcing the “cut to grow” myth (#2 account of the influence of financial lobbying in above) by downgrading or threatening to the lead-up to the 2008 financial crisis: “our downgrade the bonds of many governments analysis suggests that the political influence of which have borrowed funds in the bond markets the financial industry can be a source of to stimulate their economies into recovery. systemic risk…the prevention of future crises Such actual and threatened downgrades have might require weakening political influence of important political ramifications, empowering the financial industry.” politicians and the business lobby to put pressure on governments to cut spending – even "In light of the irresponsible behaviour of many in the midst of a recession. Since these ratings private financial market actors in the run-up to agencies are treated as serious, neutral and the financial crisis, and costly government objective evaluators of whether a country’s intervention to prevent the collapse of the economic policies render a sovereign default financial system,” declared UNCTAD’s more or less likely, they are seen as impartial Secretary General recently, “it is surprising that arbiters of a government’s financial a large segment of public opinion and many performance, and thus beyond the realm of policymakers are once again putting their trust public (or political) scrutiny. in those same institutions to judge what constitutes correct macroeconomic management More fundamentally, this myth is based upon and sound public finances." the fallacy that economics is a technocratic exercise with decisions made by neutral and Human rights responses objective scientists. The field of economics has in recent decades moved away from its origins Today advocates of policies that will best in the social sciences toward a model more enable governments to protect and fulfill attuned to the natural sciences, dealing almost economic and social rights must ask pressing exclusively with matching a preconceived questions about the degree to which those who mathematical modeling of human behavior to a are calling for fiscal austerity are basing these messy, complex reality. In so doing, this myth demands on sound, empirically-founded of a neutral economic science attempts to economics, or instead are merely taking downplay the very political nature of economic advantage of the crisis to reduce the types social policy-making and puts forth an image of a spending that they are already ideologically detached, apolitical and technocratic economics opposed to. Human rights advocates should built on independent and universal laws. question the myth that economic policy is an objective, neutral science conducted by Political factors—not purely objective ones— benevolent technocrats. Economic policy- very often drive economic policy-making, making is a highly contested terrain heavily however. Why would central banks ignore the influenced by political considerations and negative employment consequences of their relations of power. As such, human rights law efforts to keep inflation so low? Why has the and policy can serve a fundamental role in US adopted a policy of maintaining a strong US exposing economic and social injustice, dollar despite its impact in a worsening trade checking against the misuse of power as

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

influential and unaccountable today as any needed commercial loans out of reach for dictatorship in decades past, and promoting companies and worsening unemployment. economic alternatives centered on norms of human dignity and prioritizing the most Despite the human rights principles of public vulnerable among us. participation, transparency and accountability throughout the economic policy cycle furthermore, monetary policy decisions are largely made without democratic input, Myth #5: Central banks must oversight or control. Independent from public be completely independent scrutiny and accountability, a small, secretive group of central bankers are taking economic from public scrutiny to avoid policy decisions which have clear and far- hyper-inflation. reaching impacts on the fulfillment of economic and social rights, with little or no public “The only good central bank is one that can say participation or scrutiny. While central banks no to politicians,” The Economist famously have achieved relative autonomy from the declared, half jokingly, in 1990. And the myth influence of governments and demands from still lives on. Central bankers, so the argument citizens, they have not insulated themselves goes, must be insulated and detached from from being heavily swayed by the interests of public policy and scrutiny to prevent the financial sector they are responsible for governments from using monetary policy to run regulating. As one former IMF economist up out-of-control deficits, and thus stoke high concluded, “in practice, unfortunately, the New levels of inflation, which is indeed bad for York Fed and the Board of Governors are quite everyone. Instead, monetary policy should be deferential to financial-sector ‘experts.’ run in a disinterested, objective and scientific Bankers are persuasive; many are smart people, manner, independent of political winds, by armed with fancy models, and they offer very impartial and technocratic central bankers. nice income-earning opportunities to former Central banks should be in essence “benevolent central bankers.” dictators,” free from the pressure of voters but entrusted to do what’s best for all. “Independence,” writes one commentator, “is politically viable only with accountability, and Did you know? the best way to enhance accountability is for central banks to become more transparent and The decisions of central bankers can have more forthright about their objectives and tactics.” impact on jobs and growth in times of recession than many of the policies debated by legislators. Human rights responses Monetary policy, conducted by central banks, directly affects the resources available for the Central banks are in the end government bodies, realization of economic and social rights, and therefore subject to human rights especially the right to work and in many obligations under international law. Taking countries the right to housing. It does this by these obligations into account when formulating influencing interest rates, exchange rates and monetary and financial regulation policies the amount of credit available in the economy. would as a first step require an open-book and Higher interest rates discourage borrowing and transparent process, based on certain needed make credit more expensive. When central privacy safeguards but fundamentally biased banks raise interest rates, economic activity away from the influence of private interests, slows and there is less job creation. When affording more influence to public participation central banks choose to prioritize low inflation and the provision of public goods in the overall over all other considerations including design of policy priorities. Channels of employment, such as the ECB’s target of two accountability would also need to be established per cent inflation, and they raise interest rates to to ensure that central bank decision-makers face achieve this preeminent goal, it can wreak consequences for failing to take into account havoc on growth in the real economy, pushing their human rights obligations. Taking human

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

rights seriously would also provide an privatization of local water services, just opportunity many central bankers are seeking to months after a public referendum rejected the temper the single-minded, inflation-targeting idea. The ECB also demanded that the Italian obsession with other mandates to support government “design regulatory and fiscal decent work opportunities and affordable systems better suited to support firms' housing for all. Finally, meaningful human competitiveness and efficiency of the labour rights protection as a central policy priority of market”—code language for undercutting the central banks would require the prevention of most basic of workers’ rights protections. future financial crises through effective regulation in the public interest. To do so, Did you know? governments and central banks would need the freedom to use all of tools available to There is in fact no solid evidence that gutting implement policies in favor of the progressive labor protections, decreasing worker wages or realization of ESC rights. stripping unemployment guarantees will benefit the broader economy at all, let alone increase the amount of employment in a crunch. Quite the contrary. New empirical evidence from the Myth #6: The social welfare International Labour Organization (ILO)—an state coupled with organization which includes government, labor and business stakeholders—shows that poorly- intractable labor protections designed reforms to labor regulations in times are unaffordable, of crisis actually hurt, rather than help, burdensome and discourage investment and also impinge upon the quality and quantity of work. Historically, employment growth. protections and union density have consistently decreased across rich countries, according to A cadre of economic policy-makers is taking the OECD, hitting historic lows in the lead-up advantage of the democratic deficit arising from to the crisis, and driving increased wage the urgency of the economic crisis to push inequality. In fact, wages have been dropping through structural reforms to labor protections, for decades prior to the economic crisis, with pensions programs, public services and other new evidence from the IMF suggesting that it socially-useful regulations, which they argue was precisely the inequality in earnings in the are desperately needed to create the conditions US which fed the financial instability leading to for investment, economic growth and the 2008 crash to the begin with. According to employment in economies facing an enduring this line of inquiry, stronger wage equality, slump. Growth, they argue, requires a larger labor protections and collective bargaining private sector, which means to them a smaller power can stimulate purchasing power and public sector. The package of preferred reforms demand, and actually help prevent future tends to involve a weakening of labor financial crises, suggesting precisely the protection laws and collective wage bargaining opposite of this erroneous myth. As preeminent systems, deep reforms to public pension labor economist Richard Freeman writes, “The systems, the privatization of public services and best summary of the data—what we really so-called “entitlement” reforms, including know—is that labor institutions reduce earnings slashing legally-sanctified social rights inequality but that they have no clear relation to programs such as education, healthcare, social other aggregate outcomes, such as security and other social protections like unemployment.” Further, poorer individuals unemployment insurance. The new and those who earn their income from their conservative government of Spain, for example, labor have a higher marginal propensity to coupled historic cuts to social services and spend the money they earn than richer infrastructure with reforms to make workers households and those who earn their income more precarious by making it easier for from investment capital. As a result, rising employers to fire them. In Italy, the ECB income and wage inequality reduces aggregate instructed the government of its support for the demand quite severely and thus constrains

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

economic dynamism and inclusive growth considering the existence of financing significantly, according to experts. alternatives to austerity, they are likely unlawful under the International Covenant on The case for a smaller public sector, in the Economic, Social and Cultural Rights meantime, is by no means self-evident. Many of (ICESCR). They also represent sloppy, the countries which have weathered the storm ideologically-driven and plain bad economics. of the economic crisis, and consistently rank at the top of human development indicators— places like Sweden, Denmark, France, and increasingly Brazil—have some of the largest Myth #7: Austerity is public sectors anywhere. justifiable because there are Human rights responses no other alternatives.

As human rights enshrined in international law, The continuing economic crisis seems also to governments have duties to respect, protect and have prompted a crisis in innovative policy fulfill the rights to a decent wage, clean and ideas and alternative financing arrangements. healthy working conditions, to associate and Governments promoting austerity policies strike, as well as other fundamental social rights consistently fall back on the argument that the which form the foundation of the modern social economic crisis—no matter the causes—has welfare system, independent of their effects on tied their pocket books, with no other solutions economic competitiveness in a global economy. except backsliding in public expenditures on As the UN Committee on Economic, Social and economic and social rights programs. Cultural Rights—the main body to interpret what economic and social rights norms and Did you know? principles mean in changing times—made explicitly clear this year, any austerity measures For many countries, perhaps the biggest fiscal or other crisis-response policies which do not fallacy is that there is any fiscal crisis at all. respect the following human rights criteria can Austerity is neither necessary nor is it be determined, in essence, unlawful. First, any inevitable. Resources abound in many policy that may impede the progressive countries, if governments would only take steps realization of economic, social and cultural to properly generate and channel them into rights must be temporary and limited to the protecting and fulfilling their human rights period of crisis. Second, the policy must be duties under international law. necessary and proportionate, in that not adopting it would put human rights at even Alternatives to austerity are, in fact, numerous. greater risk. Third, the policy must not be Evidence from UNICEF suggests that discriminatory in effect and must comprise all opportunities to identify and expand countries’ possible measures, including tax measures, to resource bases are abundant, and that more support the social transfers needed to mitigate expansive fiscal policies are on the whole inequalities that can grow in times of crisis and completely feasible in financial terms. Each ensure the protection of most vulnerable country is unique, with potential risks and groups. And lastly, the policy must identify and trade-offs at every step, but generally speaking protect the minimum core of economic, social governments have five sets of tools to mobilize and cultural at all times. and use resources effectively—together referred to as the Maximum Available Resources Hasty, imprudent attacks on core economic and (MAR) Star: 1) Re-allocation of government social rights protections like decent wages, expenditure to more rights-realizing programs; collective bargaining, and social protection in a 2) Increasing government revenue, especially time of economic crisis may very well through tax policy in equitably ways; 3) adversely affect low- and middle-income Improving monetary policy and financial households for a long period beyond the regulation to protect rights; 4) Deficit financing economic slump. As such, and especially or restructuring existing debt, and finally, for

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

some countries, 5) Raising funds through of Tax Inspectors. Instead, the government international cooperation. decided to slash public spending by € 18 billion through historic cutbacks to public expenditure Let’s start with tax policy. Taxation is a key in education, health, research, employment vehicle for redressing social inequalities, and programs and infrastructure. As summed up goes to the heart of the accountability bond unambiguously by the UN Special Rapporteur between a State and its people. Progressive, on Extreme Poverty, “A human rights approach non-discriminatory tax policies carried out by … requires States to take steps to eliminate the capable and accountable tax authorities can prevalence of tax evasion, a problem that generate substantial sums to offset public reduces the resources available for measures to budget deficits and compensate for the social realize human rights.” costs of the crisis, especially in countries with very low tax bases, such as Ireland and Meanwhile, monetary policy alternatives, like Guatemala. New sources of financing are also those in Argentina, which balance inflation quite feasible, such as financial transaction stabilization with full employment-oriented taxes, or the Robin Hood Tax, which have been targets and financial stabilization functions can proposed as a way of promoting greater mobilize countless resources to offset decreased financial sector accountability, mitigating some revenues in hard times. Facilitating rights- of the worst forms of speculation, while fulfilling financing and directed credit toward simultaneously recuperating some of the public strategic, decent-job generating sectors could costs incurred as a result of the global financial also make economic growth more inclusive and and economic crises. According to a study by employment-intensive. Bill Gates for the G-20, at its lowest rate the FTT would yield about $48 billion across the For countries with high levels of sovereign debt G20, with higher rates offering up to $250 (especially debt accrued illegitimately), billion dollars per year. meanwhile, debt restructuring presents real possibilities to prioritize obligations to the Illegal tax evasion by companies and rich wellbeing of their people over commitments to households meanwhile causes an endemic drain their creditors. Debt relief and restructuring on the availability of revenues for the efforts in the past have been widely successful. progressive realization of rights, especially in The heavily indebted poor countries debt relief countries with already high levels of poverty, efforts helped to cut debt repayments from 20 inequality and already low tax bases. per cent of government revenue in 1998 to less Governments worldwide lose $3.1 trillion than 5 per cent in 2010, according to studies. annually to tax evasion, according to estimates. This has for the most part allowed governments This equates to about half of the world’s total to re-invest in essential social and economic expenditure on healthcare. While high-income programs. Primary school enrolment jumped to countries are among the biggest losers in 82 per cent from less than 50 per cent in the late absolute terms, low- and middle-income 1990s in Tanzania, for example, after school countries are particularly vulnerable to tax fees were abolished as a result of the country evasion. Official studies put the amount lost to being granted debt relief in 2001. illegal capital flight in developing countries at between 6-9 per cent of GDP. This is on In an unprecedented step, Norway became the average half these countries’ total tax take of first creditor nation to assume co-responsibility only 13 per cent of GDP. In Europe, for the adverse human impacts of its own meanwhile, financial modeling shows that had development loans in 2006. Deeming its Ship the UK government taken decisive steps to end Export Campaign a “development policy illegal tax evasion between 1997 and 2010, failure,” Norway unilaterally cancelled the there would simply be no debt in this highly- relevant debts of five countries, among them indebted country. Spain meanwhile loses € 88 Ecuador, which in 2004 spent six times more in billion annually to tax evasion, 38.5 of which debt servicing than health care. In doing so, could easily be captured with the right policies Norway became the first creditor country to according to estimates by the country’s Union cancel debt in the name of justice rather than in

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reference to the borrowing country’s levels of use the maximum of available resources to indebtedness or poverty alone. realize economic and social rights. Availability does not only refer to resources under the The human rights impacts of debt servicing and command of the government, but those that other financial obligations have also been of could be available through international consistent concern to human rights treaty cooperation or improved management and bodies. A recent visit to Latvia by the UN generation of resources. In this sense, Independent Expert on Foreign Debt and governments, in complying with their Human Rights aimed to evaluate the human international commitments, are responsible for rights impact of the EU-IMF stabilization exploring alternatives and where possible program in the country. With wide stakeholder broadening their fiscal space by mobilizing the support, this human rights expert has also maximum amount of resources possible in developed a set of Guiding Principles on equitable, participatory, transparent, Foreign Debt and Human Rights to give clear accountable rights-realizing ways. direction to lenders and borrowers on how to balance a debtor State’s contractual obligations arising from its external indebtedness with its international legal obligations to respect, protect Myth #8: There is nothing we and fulfill all human rights. can do about it.

UNCTAD has long called for a more balanced This myth suggests that regardless of our approach to sovereign debt restructuring, disagreements with the way economic policy including a fairer burden of adjustment between processes are being conducted in our names, we borrowers and private sector creditors. It have little choice. Public participation and advocates a temporary debt standstill, whether accountability are nice ideals, but the debt is public or private, accompanied by abruptness of needed reforms simply outpaces exchange controls, including the suspension of the possibility of providing the information and convertibility for foreign currency deposits and transparency needed. The rhetoric, language other assets held by residents as well as non- and letter of the law of human rights are nice residents. More controversially, UNCTAD says platitudes, but offer no meaningful tools or the IMF should not be involved in the avenues to dispute economic decisions, and negotiations between sovereign debtors and cultivate actionable alternatives. private creditors since countries affected are among the shareholders of the fund, which is Did you know? also a creditor. Rather, this international body argues for an independent and fair international By shifting the burden to governments to prove arbiter, which would allow debtor countries in its policies are designed and implemented in difficulty to declare a unilateral “standstill” on rights-realizing ways, human rights norms, debt payments, with creditors having to abide principles and mechanisms—beyond being a by the terms for debt restructuring as decided manifestation of international law—offer potent by a fair and independent debt workout empowering tools to turn the tide towards more procedure Civil society groups meanwhile are just, resilient, inclusive and sustainable calling for a rethink of current debt economic policy alternatives to austerity. sustainability criteria that would not be based on debt-to-export ratios, but on sustainable “No global economic and financial crisis development criteria and human rights norms diminishes the responsibility of State authorities and principles. and the international community with regard to human rights,” affirmed the United Nations Human rights responses Human Rights Council in 2009. As the UN Special Rapporteur on Human Rights and International human rights law, as specified in Extreme Poverty, further confirmed: “while the ICESCR and the International Covenant on States have discretion to adopt policy measures the Rights of the Child, compel governments to according to their own context, human rights

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are not dispensable during times of economic Human rights and social justice advocates have hardship and States must design and implement begun to strike back—in the street, in the all policies according to their human rights courtroom and at the United Nations—to exact obligations.” accountability for the profound casualties of the crisis. Currently, 160 countries—including most countries implementing austerity measures Vibrant public campaigns in Ireland and today—have bound themselves to ICESCR—an Greece, for example, are enacting independent international treaty which gives depth to the debt “audits” to demand the democratic right to economic and social rights guarantees already full information on publicly-guaranteed debts to in the Universal Declaration of Human Rights. determine exactly who owes what to whom and As part of their obligations, government parties by implication, who precisely is being "bailed to the Covenant have legally committed out" and who ought to pay, if anyone. themselves to improving the full realization of Advocates are increasingly coordinating these economic and social rights progressively over actions within an International Citizen Debt time by using the “maximum of available Audit Network to challenge basic assumptions resources” to this end. about the legitimacy of debt in times of crisis.

Unjustified, unnecessary, disproportionate and Human rights advocates are also challenging discriminatory cuts in public programs designed fiscal austerity measures on constitutional and to fulfill the human rights to education, social other legal human rights grounds in the courts. protection, health, food, water, or housing— Pensioners in Latvia for example challenged the measures which disproportionately affect those constitutionality of a government reform who had no hand in causing the economic restricting pension payments, and the crisis—are not only immoral and economically Constitutional Court deemed the act counterproductive. For most governments, they unconstitutional citing the fundamental right to are expressly unlawful, as the UN Committee social security. The Court asserted that the State on Economic, Social and Cultural Rights had the obligation to guarantee the minimum explained in an unprecedented letter to State essential levels of the right irrespective of parties to the Covenant in the context of resources, and pointed to the fact that the deepening economic crisis in the spring of government had not considered other less 2012. In other words, governments in crisis restrictive measures nor designed an effective must justify that any cuts which affect rights are remedy for reduced pensions. The Court reasonable in reference to existing alternative refused to consider the conditions set out by resources which could be raised (through, for international creditors as worthy of trumping example, tax policy reforms) to recompense the Constitutional guarantees of the right to social losses in the public budget. In the rare cases security. The Constitutional Court of Romania, where there are no alternatives, budgeting must meanwhile, forced the government to design be undertaken with the utmost care with respect alternatives to reducing the debt which would to ESC rights, and must not lead to not affect fundamental rights. The Hungarian discrimination in law or in practice. Budgeting Constitutional Court meanwhile has been during an economic downturn must not particularly active in challenging several undercut minimum essential levels of basic government tax policies post-crisis, so much so needs in society, and must embed the principles that the government set out to amend the of transparency, public participation, constitution to strip the court of its power to accountability and remedy for harm done. It annul tax-related laws for all instances in which does not take much to deduce that many of the certain constitutional human rights were at austerity packages in countries worldwide are stake. In the US, courts in New Jersey and likely to amount to “retrogressive measures,” California have received challenges to crisis- and thus be considered unlawful under the induced education and disability cuts, Covenant. respectively. Claims have also been brought into the UK courts to challenge that country’s Human rights responses post-crisis economic and social rights deficits.

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Fiscal Fallacies: 8 Myths about the ‘Age of Austerity’ and Human Rights Responses

In a remarkable recent case, concerned British Social justice advocates have even leveraged students brought a case against the government the United Nations human rights protection arguing that a policy tripling university tuition mechanisms to challenge austerity measures fees would effectively thwart equal university and insist on more people-centered economic access for ethnic minorities, the poor and other recovery policies. The human rights dimensions marginalized groups, and was thus in breach of of austerity measures in the US, Ireland, Greece the right to education and non-discrimination and Spain have all been brought before set out in both the UK Human Rights Act and independent UN bodies—compelling these the European Convention of Human Rights. governments to justify their conduct and openly While judges did not overturn the policy, the answer before the international community. High Court did hold that the Secretary of While it is true that these bodies can only offer Business had "failed fully to carry out his non-binding recommendations and have no public sector equality duties” and to give "due enforcement power strictly speaking, their regard" to promoting equality of opportunity in observations have provided much-needed education. Advocates in the UK meanwhile exposure, legitimacy and renewed strength to continue to insist that human rights provides a advocacy efforts back home. The UN ESCR coherent, galvanizing alternative to government Committee reviewing Spain, for example, has cutbacks. provided renewed force to civil society advocacy and litigation efforts when it Civil society has also spearheaded several expressed concern over austerity-driven litigation initiatives against credit rating reductions in levels of protection afforded to the agencies. A criminal complaint before Spain´s rights to housing, health, education, and work, Audiencia Nacional brought by the Observatori among others, and urged the government to DESC and others against three major credit guarantee that all austerity measures maintain rating agencies (Moody’s, Fitch and Standard the current levels of economic and social rights’ and Poor’s), for example, argued that the protection and are, at all times, temporary, conflict of interest inherent in the biased proportional and non-discriminatory. determination of risk by these agencies breaches Criminal Code provisions against Wherever you are, your human rights are unlawful price manipulation and abuse of increasingly being sacrificed at the altar of confidential information for private benefit. In financial stability. When individuals, articulating the public good being protected by households, communities, and whole nations these criminal code provisions, it challenged the must surrender their hard-won rights to notion that “market forces” are too abstract and education, adequate health care, and decent jobs indeterminate to be held to account, arguing in free and healthy conditions to balance budget that behind the market lie individual and sheets, the basic values of human dignity are corporate “subjects who should be held to turned on their head. Why shouldn’t indicators account for their corresponding civil and of social and human well-being be monitored, criminal responsibility in these offences.” This prioritized and valued at least as much as case parallels a number of similar legal financial balances and the production of challenges against credit rating agencies in tradable goods and services? various states of the US and Italy. Advocates in Illinois, Ohio, Connecticut and California, for “Nothing about us, without us!” Ultimately, it’s example, have accused different credit-rating your choice: Stand back and watch as agencies for acting fraudulently in providing misguided, counterproductive, unlawful and factual evidence about investment ratings they wrong-headed austerity measures strip you of knew to be false. Authorities in Italy meanwhile your human rights. Or fight back for human have also opened investigations against the dignity in defiance of unneeded, three agencies for having downgraded Italy’s disproportionate and unjustified cutbacks. sovereign rating based on untruthful and tendentious assessments, with reportedly Dignity or indignation—It’s in your hands. significant damage to the country and its public finances.

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About CESR Suggested Reading

The Center for Economic and Social 1. Isabel Ortiz and Matthew Cummins (eds.) “A Recovery for All: Rethinking Rights (CESR) was established in 1993 with the mission to work for the Socio-Economic Policies for Children and Poor Households,” UNICEF recognition and enforcement of economic, Division of Policy and Practice, New York 2012. social and cultural rights as a powerful tool for promoting social justice and human 2. United Nations Independent Expert on the question of human rights and dignity. CESR exposes violations of extreme poverty, Ms. Maria Magdalena Sepúlveda Carmona, “The human economic, social and cultural rights through an interdisciplinary combination rights based approach to recovery from the global economic and financial of legal and socio-economic analysis. crises, with a focus on those living in poverty,” 17 March, 2011. CESR advocates for changes to economic and social policy at the international, 3. Radhika Balakrishnan and Diane Elson (eds.) Economic Policy and Human national and local levels so as to ensure Rights, Zed Books, New York, 2012. these comply with international human rights standards. 4. Ignacio Saiz, “Rights in Recession? Challenges for Economic and Social Rights Enforcement in Times of Crisis” Journal of Human Rights Practice1 162 Montague Street, 3rd Floor, Brooklyn, NY, 11201, USA. (2): p. 277-293, 2009. Tel: +1 718 237-9145 5. Radhika Balakrishnan, Diane Elson, James Heintz & Nicholas Lusiani, Fax: +1 718 237-9147. www.cesr.org “Maximum Available Resources & Human Rights,” Center for Women’s Global Leadership, Rutgers University, 2011. We invite your comments and feedback: [email protected] 6. Association for Women’s Rights in Development, Center of Concern, Center for Economic and Social Rights, Center for Women’s Global Leadership, Board Members International Network for Economic, Social and Cultural Rights, Bringing

Philip Alston (Honorary Board Member) Human Rights to Bear in Times of Crisis: A human rights analysis of Professor of Law, New York University government responses to the economic crisis, Submission to the High level School of Law Geoff Budlender, Constitutional and segment of the 13th session of the UN Human Rights Council on the global Human Rights Lawyer and financial crises, 2010. Linda Cassano (Secretary and Treasurer), Commonwealth Bank of Australia 7. United Nations, “Report of the Commission of Experts of the President of Manuel José Cepeda, Jurist, Universidad the United Nations General Assembly on Reforms of the International de los Andes Sakiko Fukuda-Parr, Professor of Monetary and Financial System,” 2009. International Affairs, New School, New 8. UNCTAD, “On the brink: fiscal austerity threatens a global recession,” York Richard Goldstone, Co-chairperson of Policy Brief no. 24, 2011. the Human Rights Institute of the 9. Center for Economic and Social Rights, “Mauled by the Celtic Tiger: Human International Bar Association Chris Jochnick, Director, Private Sector Rights in Ireland’s Economic Meltdown,” February 2012. Engagement, Oxfam America 10. Radhika Balakrishnan and Diane Elson, “Auditing Economic Policy in the Irene Khan, Director General, International Development Law Light of Obligations on Economic and Social Rights”, Essex Human Rights Organization (IDLO) Review Vol. 5 No.1, July 2008. Elizabeth McCormack, Adviser, Rockefeller Family & Associates 11. Kumhof, Michael and Ranciere, Romain (2011) “Unequal = Indebted,” Carin Norberg, Director, Nordic Africa Finance & Development, Vol. 48, no. 3, September 2011. Institute Alicia Ely Yamin (Chairperson) Director 12. Richard Murphy, “The Cost of Tax Abuse,” Tax Justice Network, 2011. of the Program on the Health Rights of 13. Center for Economic and Social Rights, “Visualizing Rights: Spain Women and Children at the François- Xavier Bagnoud Center for Health and Factsheet,” May 2012. Human Rights, Harvard University 14. Richard Jolly, Giovanni Andrea Cornia, Diane Elson, Carlos Fortin,

Acknowledgments Stephany Griffith-Jones, Gerry Helleiner, Rolph van der Hoeven, Raphie Kaplinsky, Richard Morgan, Isabel Ortiz, Ruth Pearson and Frances Stewart, This briefing was produced by CESR “Be Outraged: There are Alternatives,” Oxfam Great Britain, May 2012. Senior Researcher Nicholas Lusiani with additional research by economist Rick 15. Association for Women’s Rights in Development, Center of Concern, Center Rowden. for Economic and Social Rights, Civicus, DAWN, iBase30, International  © 2012 Center for Economic and Social Rights. This Network for Economic, Social and Cultural Rights, and Social Watch, A work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported Bottom-Up Approach to Righting Financial Regulation Briefing Series. License.

CESR wishes to thank the Gestha Union of Tax Inspectors (Sindicato de Técnicos del Ministerio de Hacienda) and Gabriela Jorquera Rojas at the European Anti-Poverty NetworkRights (EAPN) in MadridCrisis for Series Briefing Paper | July 2012 16 their invaluable help in reviewing this factsheet.