Back in early 2010, I suggested that a key theme for the year ahead should be the pressing need for a range of economic actors to rebuild the credibility that had been so badly damaged by the financial crisis. In particular, I suggested that the image of competent Western economic management had been trashed, and was now in urgent need of repair.
Not quite two years on, and sadly, policy credibility remains in short supply. The debt ceiling debacle in Washington and subsequent sovereign ratings downgrade provided a sort of symbolic confirmation that the US could no longer boast AAA-quality policymaking. Meanwhile, developments in the eurozone over the past two years have signalled an even greater degree of policy failure, with expressions of disappointment and frustration with Europe's drift towards disaster now commonplace.
As a result, rebuilding policy credibility should – again – be a key theme for next year. Here's hoping the world's leaders do a better job of it this time.
Photo by Flickr user davidz.
