Posts Tagged ‘transparency’

“The Case for an Independent Treasury”

July 27, 2025

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Ricardo Morin
An Embroidered Question
CGI
2025

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To the Board of Governors of the Federal Reserve System—in recognition of the ongoing challenge of aligning institutional independence with public responsibility.

By Ricardo Morin

July 27, 2025

Abstract

This essay examines the conceptual validity of an independent treasury, free from executive control and governed by long-term, nonpartisan economic reasoning. It argues that the alignment of fiscal institutions with short-term political leadership creates structural risks that compromise transparency, sustainability, and public trust. By contrast, an autonomous treasury—operating within clear legal mandates and guided by professional expertise—can promote fiscal stability and integrity while preserving essential democratic oversight. The analysis rejects both executive subordination and technocratic absolutism, and proposes a balanced institutional model in which independence functions as a form of principled restraint. This concept, as developed in the essay, refers to the structured and lawful limitation of authority in pursuit of long-term public interest—discipline rooted not in detachment, but in ethics, transparency, and legality. This framework, abstracted from any specific national context, is intended to apply broadly to the theory and design of sound fiscal governance.

The Case for an Independent Treasury

The question of how a treasury should be structured—whether subordinated to political leadership or operating autonomously—raises fundamental concerns about institutional integrity, fiscal responsibility, and democratic accountability. While treasuries are often housed within executive power, there is a strong theoretical case for granting such institutions political independence. A treasury removed from direct control of governing administrations and guided instead by economic expertise, long-term reasoning, and publicly defined mandates can provide a more stable and ethically sound foundation for fiscal policy.

At the heart of this argument is the fact that fiscal decisions—such as setting tax levels, allocating public spending, and managing debt—extend far beyond the timeline of electoral cycles or political terms. When treasury operations are subject to short-term political priorities, fiscal policy risks being distorted by opportunism—through unsustainable tax cuts, politically timed spending increases, or the concealment of uncomfortable debt projections. These distortions undermine both the credibility of fiscal governance and the long-term stability that supports public trust and financial soundness.

A common set of distortions includes election-cycle spending surges that prioritize immediate electoral gains over lasting fiscal balance; strategic underreporting or reclassification of deficits to hide true fiscal conditions; and biased tax enforcement, where tax authorities selectively target or protect groups based on political motives. Such behaviors not only threaten fiscal sustainability but also weaken the treasury’s role as a neutral guardian of public resources.

Principled restraint is key to addressing these challenges. This concept refers to a structured commitment to ethical limits and responsible governance. It is a form of authority that binds itself willingly to the public interest, resisting both political capture and technocratic arrogance. Principled restraint is not the absence of power, but its disciplined and transparent exercise, grounded in law, deliberation, and long-term accountability. It affirms the treasury’s role as a steward of the public good across political transitions and economic cycles.

An autonomous treasury, governed by clear statutes and staffed by nonpartisan experts, can anchor fiscal management to long-term goals such as sustainability, fairness, and generational equity. Its purpose is not to replace democratic decision-making but to ensure that such decisions are carried out with consistency, impartiality, and professional skill. Just as some institutions responsible for macroeconomic stability are insulated from immediate political pressures, so too might a treasury—especially in functions like forecasting, revenue collection, and debt issuance.

The credibility of an independent treasury extends beyond its internal workings. Reliable and professionally managed fiscal behavior builds confidence among citizens, investors, and institutions. When financial governance is free from sudden reversals or partisan manipulation, it fosters trust and encourages long-term investment. Independence also helps prevent the politicization of fiscal enforcement, reducing the temptation to use taxation or regulations as tools of political favor or retaliation.

However, institutional independence is not without risks. Fiscal decisions are not merely technical; they are moral and distributive, touching on societal values, justice, and competing visions of the common good. Shielding these decisions entirely from democratic debate risks technocratic overreach, ideological rigidity, or disconnect from lived realities. Expertise alone cannot legitimize choices that affect livelihoods and social priorities.

The solution is not absolute independence but a careful balance between insulation and accountability. A treasury designed for long-term neutrality must be bound by clear mandates, subject to transparent review, and accountable through publicly visible processes. Its leadership should be appointed through pluralistic methods that reduce capture by any one faction, and its actions should undergo open reporting, independent audits, and legal oversight. Protected from arbitrary dismissal or short-term interference, it must still answer ultimately to the legal and ethical framework established by society through its representative institutions.

Moreover, any institutional design must include mechanisms for coordinated emergency response. No treasury, however independent, should be structurally paralyzed in times of acute crisis. Temporary protocols for collaboration with political authorities—limited by law and time—ensure that flexibility does not compromise integrity.

Ultimately, the case for an independent treasury rests not only on technical competence but on maintaining civic trust. When fiscal governance is shaped by rules rather than impulses, by analysis rather than improvisation, and by impartial stewardship rather than partisan interest, it becomes a stabilizing force in public life. The institutional form must embody a dual commitment: to professional expertise and democratic legitimacy. Independence, in this sense, is not isolation but principled restraint—a structured commitment to ethical limits and responsible governance. It is the disciplined and transparent use of power, grounded in law, public deliberation, and long-term accountability. This discipline protects the treasury’s role as steward of the public good across political changes and economic cycles.

Any society seeking to secure the long-term integrity of its public finances must confront the structural incentives shaping its treasury. If fiscal authority remains vulnerable to fleeting political agendas, sustainability will always be precarious. But if that authority drifts too far from public input, it risks losing the legitimacy it depends on. The challenge is to build institutions that are durable without becoming unresponsive, disciplined without becoming opaque, and independent without giving up accountability.

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Annotated Bibliography

  • Blyth, Mark: Austerity: The History of a Dangerous Idea. New York: Oxford University Press, 2013 (Blyth explains how austerity, often framed as a technical necessity, has historically served as a political tool to restructure economic power. His analysis is crucial to understanding why an independent treasury should not be conceived as a default promoter of restrictive policy but as an institution committed to fiscal sustainability with social responsibility).
  • Brunner, Roger: “Independent Fiscal Authorities: A Comparative Analysis”. Public Finance Quarterly 21 (4): 482–505. Thousand Oaks: Sage Publications, 1993 (Brunner offers a comparative analysis of different models of independent fiscal authorities. His study provides an empirical foundation for evaluating how institutional independence can be balanced with effective mechanisms of democratic accountability).
  • Goodhart, Charles, and Dimitrios Tsomocos: The Challenge of Fiscal Independence. London: CEPR Press, 2021 (This volume examines the conceptual and practical challenges of separating fiscal policy from short-term political pressures. Its contribution is key to supporting the argument that fiscal independence must be grounded in clearly defined limits and democratic legitimacy to avoid self-referential technocracy).
  • Lledó, Victor, and Teresa Ter-Minassian: “Fiscal Councils and Independent Fiscal Institutions”. Washington; IMF Working Paper WP/22/47. International Monetary Fund, 2022 (This IMF paper provides a detailed overview of independent fiscal institutions across multiple jurisdictions. It emphasizes that the effectiveness of such institutions depends not only on their legal design but also on their integration into transparent democratic processes).
  • Ooms, Thomas: “Fiscal Policy and the Risk of Politicization”. Journal of Economic Perspectives 32 (3): 75–92. Nashville: American Economic Association, 2018 (Ooms argues that the politicization of fiscal policy leads to significant distortions in resource allocation. His article supports the idea that a structurally protected treasury can reduce the risk of decisions driven by partisan interests).
  • Stiglitz, Joseph E.: Economics of the Public Sector. New York: W. W. Norton, 2000 (This classic textbook offers a comprehensive framework on public sector economics. Stiglitz’s discussion of market failures and the role of institutions provides a solid theoretical foundation for justifying the careful design of a treasury with structural independence and public accountability).
  • Wehner, Joachim: Legislatures and the Budget Process: The Myth of Fiscal Control. New York: Palgrave Macmillan, 2010 (Wehner challenges the presumption that legislatures exercise effective control over public budgets. His work suggests that, given legislative weakness, strengthening the institutional role of the treasury may be necessary to ensure transparency and fiscal discipline).

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“Global Authoritarianism and the Limits of Traditional Analysis”

February 28, 2025

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The war in Ukraine is often presented as a geopolitical confrontation between the West and Russia, but this interpretation can obscure a deeper reality:     the rise of authoritarianism as a global force.     Noam Chomsky, one of the most influential voices in the critique of U.S. foreign policy, has argued that U.S. hegemony is the primary factor driving the conflict.     His approach, rooted in Cold War logic, has been essential for understanding global power dynamics.     However, one must question whether this framework remains sufficient to analyze the coordinated expansion of authoritarian regimes in the world today.

The issue is no longer simply whether U.S. policy contributed to Russia’s aggression, but whether democracies can withstand the deliberate advance of governments seeking to consolidate power at any cost.     What is at stake transcends Ukraine’s sovereignty:     it is the survival of democracy in the world.

Chomsky argues that NATO’s expansion and U.S. financial dominance exacerbated tensions with Russia and limited diplomatic options.     His vision proposes a world in which power is distributed between the United States, Europe, China, and Russia, which he believes would create a more stable and just balance.     This perspective has been crucial in questioning the excesses of U.S. interventionism.     In the present world, however, where authoritarianism is not only reacting to the West but also actively seeking to reshape the global order, is a framework based solely on containing U.S. hegemony sufficient?

The rise of authoritarian regimes is not merely a response to Western influence; it is a deliberate strategy to consolidate power.     While Chomsky has emphasized the importance of distributing global power, it is crucial to analyze the nature of those who would fill this void.     Russia and China are not simply seeking a multipolar stability; their actions reflect an attempt to exert absolute control, without democratic constraints.     Chomsky’s critique helps us understand the roots of international conflicts, but it may need to be expanded to account for how these regimes are transforming the very structure of global politics.

One challenge in applying Chomsky’s traditional analysis to the present is that contemporary authoritarianism no longer aligns solely with past ideological divisions.     It is no longer a struggle between socialism and capitalism, or left and right.     Rather, these regimes share a common objective:     dismantling democratic institutions to ensure their permanence in power.

Putin, for instance, invokes Soviet nostalgia while prohibiting any critical reassessment of Stalinism.     China blends State capitalism with absolute political control.     Hungary and India, once considered democracies aligned with the West, have adopted authoritarian models.     Meanwhile, the U.S. far-right, which historically opposed communism, has begun to adopt the Kremlin’s narrative, portraying it as a defender against “globalist elites.”

This ideological alignment makes modern authoritarianism more dangerous than ever.     It not only transcends traditional power blocs but is also reinforced through strategic alliances, mutual support, and the erosion of democracies from within.     This is perhaps most evident in the United States.     The presidency of Trump revealed an unexpected vulnerability:     the possibility that authoritarianism could thrive within the world’s most influential democracy.     Here, the debate is no longer reduced to a question of isolationism or interventionism, but to the real risk of autocratic tactics being normalized in domestic politics.

The Trump administration sent contradictory signals regarding the Kremlin, weakening the principle of deterrence.     Rather than establishing a clear stance against authoritarian expansion, its ambiguity allowed regimes like Putin’s to interpret the lack of firmness as an opportunity to act with impunity.     Figures such as Marco Rubio have advocated for an unequivocal stance that would reinforce U.S. strategic credibility, while the inconsistency in the Trump administration’s foreign policy contributed to the perception that the West was divided and hesitant.

This weakening of democratic leadership has not occurred in a vacuum.     The globalization of authoritarianism is a phenomenon in which autocratic regimes not only directly challenge democracies but also back one another to evade sanctions, subvert international pressure, and consolidate their internal rule.     The invasion of Ukraine must be understood within this framework:     it is not just a regional conflict or a reaction to NATO, but a calculated move within a broader strategy to weaken global democracy.

For decades, critics like Chomsky have been instrumental in highlighting the effects of U.S. dominance on global politics.     His analysis has allowed us to understand how U.S. hegemony has influenced numerous conflicts.     However, the evolution of authoritarianism raises questions that require expanding this perspective.     The greatest threat to democracy is no longer exclusively U.S. power, but the consolidation of a global autocratic model advancing through coordinated strategies.

Blaming the U.S. for every geopolitical crisis may overlook a crucial shift:     authoritarian regimes have moved from being a reaction to Washington’s influence to becoming an active strategy to replace the Western democratic model.     Recognizing this shift does not absolve the U.S. of its failures in foreign policy, but it does demand an understanding that countering authoritarianism requires more than constant criticism of its hegemony.     It requires recognizing that democracy faces a coordinated and unprecedented threat.

Chomsky’s vision of a multipolar world is, in theory, appealing.     However, what would this imply in practice if the actors filling the void left by the U.S. are not interested in preserving democracy?     The real challenge is not merely containing Putin’s territorial ambitions but preventing his model of governance—based on dismantling democratic institutions—from gaining traction in the West.

Chomsky remains one of the most incisive critics of U.S. foreign policy, and his work has been fundamental in understanding the effects of power on international relations.     His analysis has shed light on the flaws of interventionism and the dynamics of global hegemony.     The world, however, has changed, and so have the challenges facing democracies.     Today, the crisis in Ukraine is no longer limited to a debate over NATO, U.S. intervention, or Western hypocrisy.     It is part of a broader struggle between democracy and autocracy, a struggle that does not end at Ukraine’s borders but extends to the very political institutions of the West.

If we fail to recognize this shift, we risk not only losing Ukraine but also underestimating the scope of the threats facing democracies worldwide.     Neutrality is no longer an option when the challenge is the survival of free societies.     Beyond the mistakes of the West, the rise of authoritarianism demands a response that goes beyond constant criticism of U.S. hegemony and instead embraces the active defense of democratic values wherever they are under threat.

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Ricardo Federico Morín Tortolero

February 28, 2025; Oakland Park, Florida

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