Measuring Deliberative Conditions

• Date: 01 September 2016
• Published date: 01 September 2016
• Author: John T. Woolley,Joseph Gardner
• DOI: 10.1177/1065912916657186
• Subject Matter: Articles

Political Research Quarterly

2016, Vol. 69(3) 594 –605

© 2016 University of Utah

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DOI: 10.1177/1065912916657186

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Article

While there are well-developed literatures on both delib-

eration and monetary policy, there has been almost no

effort to join the two. This is unfortunate. From the mon-

etary policy side, an extraordinary record of policy dis-

cussion is available for analysis. From the deliberation

side, there is a rich body of theorizing but less systematic

empirical work. This project addresses this gap.

The financial crisis that began in 2007 made plain the

pivotal economic policy-making role played by the

Federal Open Market Committee (FOMC). As a key

player in macroeconomic stabilization, the FOMC influ-

ences inflation and economic growth by setting interest

rates, fixing policies concerning the “open market” pur-

chase and sale of securities, and coordinating direct lend-

ing to financial institutions carried out by Federal Reserve

district banks. These activities are done in coordination

with policies set by the Federal Reserve Board of

Governors (hereafter, FRB). Starting with the chairman-

ship of Paul Volcker in 1979, the visibility of the Fed has

increased. Since 2008, there has been a contentious

debate about the Fed’s actions to address the financial cri-

sis, drawing it into even more political conflict. At the

same time, in recent decades, a consensus has emerged

that to be successful, central banks should be modeled

after the Fed—independent, governed by committees,

and focused on fighting inflation (Blinder 2004).

Observers commonly remark on the tension between

the need to understand policy making at central banks like

the Fed and the secrecy that continues to characterize their

operations.1 This secrecy has been justified to insulate the

Fed from partisan pressures, to assure effective interven-

tion in markets, and to preserve a flow of essential confi-

dential information from the private sector.

Notwithstanding important moves toward greater open-

ness in recent years, outsiders cannot directly observe

FOMC meetings, nor can they know exactly what was

discussed until transcripts are released after a five-year

lag. Observers cannot know what issues were raised or

ignored, how strenuously members disagreed, what argu-

ments were particularly persuasive, or what bargains

struck. For example, contemporaneous observers could

not know that “credit default swaps,” one of the most trou-

bled financial instruments in the financial crisis, were

scarcely ever mentioned in FOMC meetings before mid-

2007 and not discussed at any length until January 2008.

657186PRQXXX10.1177/1065912916657186Political Research QuarterlyGardner and Woolley

research-article2016

1Gonzaga University, Spokane, WA, USA

2University of California, Santa Barbara, USA

Corresponding Author:

Joseph Gardner, Department of Political Science, Gonzaga University,

Box AD 63, 502 E. Boone, Spokane, WA 99258-0063, USA.

Email: gardnerj@gonzaga.edu

Measuring Deliberative Conditions:

An Analysis of Participant Freedom

and Equality in Federal Open Market

Committee Deliberation

Joseph Gardner1 and John T. Woolley2

Abstract

Drawing from the literature on deliberative conditions, we analyze thirty years of verbatim transcripts of the Federal

Open Market Committee (FOMC). The transcripts provide a rare opportunity for the systematic empirical analysis

of deliberative conditions. The importance of the FOMC, and its recent policy failures, makes the case particularly

interesting. Deliberative scholars argue that deliberation should occur in a setting where participants are free and

equal. Using a unique set of deliberative measures, our model shows that FOMC members do enjoy deliberative

freedom. In contrast, we find inequalities in rates of participation. Some deviation from equality may be reasonable.

However, we demonstrate a sustained pattern of gender inequality in participation that could in turn influence the

FOMC’s policy choices and which is difficult to justify on any grounds.

Keywords

deliberation, Federal Open Market Committee, monetary policy, equality, text analysis