Neoliberal governmentality uses public finance and budget as tools to spread market rationality – it constructs neoliberal subjects that internalize the state’s discipline to allow for unfettered control.

In looking at the literature, few authors draw attention to the public finance from the perspective of governmentality after Foucault. Amongst them, Nikolas Rose (1993; 1996) and Peter Miller (2008, with Rose) refer to budget and budgetization as the mechanism of self-technology and rationalization pertain to neoliberal governmentality in advanced liberal countries. Budget and budgetization are seen as the essential sites and means of advancing expert knowledge, calculative rationalities and self-disciplinary procedures in governing individuals and population.

Taking inspiration from Rose and Miller, Stephan Collier (2007; 2011) makes an important contribution to the analysis of budget as social technology and budgetization as the rationalization of government in the context of and transition to neoliberalism. Collier’s studies are based upon the case of the Russian industrial city Belaya Kalitva in the post-Soviet period and aim to explain how the city has gone under a great transformation towards a social modernity managed by neoliberal governmentality. Following Max Weber’s distinction between formal and substantive rationality, Collier argues that neoliberal governmentality and budgetary processes are not limited to the formal/calculative rationality which is carved out by the market logic. Collier identifies the substantive dimension of neoliberal governmentality and budget/budgetary rationalization, which suggests that governing population and individuals requires taking into consideration the long-term historical structures, norm systems, relations and cultural attitudes of the population. In doing so, Collier shows that neoliberal governmentality is not only concerned with the elimination of the centralized bureaucratic social welfare and planning system through the market mechanisms and formal rationality but also with the transformation and reconstruction of the embedded social structures, milieu, norms and values. This means that instead of pursuing a sharp rupture with the past, neoliberalism works on the continuity of the past values by articulating them to the grid of new societal system. The budget as a social technology is at the service of the neoliberal art of government to rebuild and govern society within its actual, historical and substantive conditions. Based upon the case study Collier argues that life at its micro and macro extent is the target in the process of constitution of social modernity through neoliberal budgetary practices and procedures which would be considered to be ‘biopolitical’ technologies of neoliberal governmentality concerned with both continuities and discontinuities. Thus, budget as a neoliberal social and biopolitical technology engages in the redistribution of the sources among the races, ethnicities, genders, sexualities and other specific classifications of the life with an eye to improving and spreading the market rationality.

Following Collier, it is fair to say that budget as a biopolitical technology in neoliberal governmentality comes into play with strong microeconomic effects. As budgetary policies and rationalization which seek to establish symmetry between the budgets of official administrative units and those of households target the substantive and institutional transformation of individuals and society, the formalist rationality and calculative reasoning are, on the other side, founded on rational political-economy choices of individuals as opposed to central economic/fiscal planning. Budget becomes the managerial grid of extensive economic and political rationalization processes and it is deployed both as a constructive technology of the social control and self-technology in a way to make individual sovereign through the modification of his/her substantive habituation which is still subject to the macro-fiscal discipline. What is more, this does not exclude expert knowledge and management, and rational calculation of budgeting; they shift from the domain of central units of government to individuals. In this sense, Collier characterizes neoliberal governmentality and biopolitical government as the microeconomic critique of the welfare state bringing forward individuals’ choices geared towards re-programming of the society on the basis of micro foundations of power relations. As public choice theory contemplates, the calculative/formal rationality of taxation and expenditures is highly decentralized and becomes dependent upon choices, preferences and the power of political bargaining of the autonomous individuals and local units. The scope of public finance is not confined to the subject of scarce resource allocation managed by the central economic/fiscal planning institutions. Neoliberal governmentality employing budget as a biopolitical apparatus targets to undermine the ‘social capitalism’ in which individuals are envisioned as living encapsulated in an ‘iron cage’ that forces them to act like the state officials in their daily and private lives regulated by the bureaucratic rules instead of an autonomous and free individuals acting out of their own will to decide around self-preferences and -choices (Sennett, 2006: 33).

Drawing on Foucault and governmentality, Pierre Dardot and Christian Laval (2014) are other two authors who deal with the question of how and through which mechanisms and technologies the autonomous individual freed from the ‘iron cage’ has been turned into or, better still, manufactured as a neoliberal subject. Like the aforementioned authors who pay specific attention to budget and budgetization, Dardot and Laval conceive neoliberalism as the new rationality, identifying the role of the budget as a social technology of control and self-technology in the process of neoliberal restructuring of individuals and society as a whole. Dardot and Laval put greater emphasis on the disciplinary and norm-imposing functions of neoliberal governmentality. For them, neoliberalism as an art of government has two interrelated aims: Construction of ‘entrepreneurial government’ and ‘neoliberal subjects’. Dardot and Laval see the budget practices and discourses as the essential mechanisms to achieve these ends. Budget functions both as a social/political technology to create an entrepreneurial government and a technology of the self to manufacture neoliberal subjects in the state sector and public life. Monetarism led by Milton Friedman made the early and general formulizations about the budget as a neoliberal technology, in which context “[t]he budget itself became an instrument for disciplining conduct” (Dardot and Laval, 2014: 171). The budget as a neoliberal technology of discipline and norm imposition is therefore not only concerned with fiscal discipline in the scope of macroeconomic policy that targets a balanced budget to accomplish the reduction of tax burden over profits, public debt, and public expenditures for welfare programs. It is also concerned with disciplining the conducts of individuals within the framework competition and entrepreneurial culture: This double constraint, monetary and budgetary, . . . was as if, by compelling agents to internalize them, the state was equipping itself with the means to constantly influence them via an ‘invisible chain’ (to employ a phrase of Bentham’s), which would oblige them to conduct themselves as individuals in competition with one another (Dardot and Laval, 2014: 172).