CAIRN-INT.INFO : International Edition

1It is now an established objective of the state to have competitive public debt, with borrowing agreements benefiting from the best possible interest rates on the financial markets. So, shouldn’t the daily management of this debt be the responsibility of a specialized agency employing real traders, with offices located at the heart of Paris’ financial district, rather than that of senior officials employed by the French Ministry of Finance at Bercy? This was the question that, at the end of the 1990s, led to the creation of an independent agency dedicated to the management of French public debt, responsible for issuing the sovereign bonds that enable the government to bridge the gap between public expense and revenues, a deficit that has been accumulating since 1974.

2Created in 2001, the Agence France Trésor (AFT) is not the only agency of this kind in the European and international landscape. [1] By the end of the 1990s, New Zealand, Ireland, the United Kingdom, Portugal, Austria, Australia, Hungary, Iceland, the Netherlands, Poland, Greece, and Germany had all put in place, or had begun to consider putting in place, debt management offices, with varying degrees of operational autonomy. The institutional innovation of Agence France Trésor can be seen as the adaptation and national appropriation of an administrative norm shaped at an international level by intergovernmental agencies (IA) attentive to the needs of financial markets: the International Monetary Fund (IMF), the World Bank (WB), and the Organization for Economic Co-operation and Development (OECD). The shift to an autonomous agency model for the management of debt, central banks, and other areas of public policies (including health, industry, transport, and telecommunications) is founded on a functionalist contractual model. In order to protect monetary and financial imperatives, in and through the agency, political representatives voluntarily and rationally relinquish their discretionary powers. The autonomization of these “functions” is a way for the state to demonstrate its “credible commitment” to potential lenders and debt underwriters by tying the hands of those in government. [2] Maintaining discipline on matters relating to inflation, budgetary balance, and a regular and durable debt service is seen to have greater credibility if such objectives are inscribed in norms that are institutionalized or delegated to technical experts acting within an organization that is supposedly impermeable to political sensibilities, and which is more willing to make painful but necessary choices in the name of strict economic efficiency. [3] By naturally extending the independence from executive power already enjoyed by the Central Bank (CB) in its dominant form, the autonomy accorded to the debt issuance office constitutes an “institutional point of veto”, an additional guarantee for the capital markets (being courted by the public administration in order for the latter to be able to finance itself) that arbitrary sovereign powers will not intervene in financial affairs. [4] Reconfigured in this way, the Treasury agency continues to contract debts on behalf of the government, but in a virtually automatic manner, both at a distance from politics and sheltered from it. The pattern of administrative delegation of the debt management office fixes the administrative practices that improve the state’s credit within an organizational architecture. The reforming act is thus justified in the name of public interest. The agency is designed to improve the performance of the service by reducing the risk premium that creditors require (which affects the interest rates on its loans), and therefore to reduce the debt burden on the state budget that is borne by the citizen-taxpayer.

3This article looks at the debates that took place in the highest circles of the French state at the time of the creation of the AFT. [5] The maximalist vision of this project consisted of detaching and taking out of the hands of the Ministry of Finance the function of financing government, traditionally considered to be irreducibly sovereign (“the original office”, in the words of one senior civil servant) in order to partially privatize this public service. By refusing to take for granted the depoliticization apparently at work in this administrative redesign, I intend to show how the relinquishing of politics by the agency is in itself a political project, and more precisely a project for the organization of economic policies. By sending financial investors a clear message of independence and separation from politics, this administrative format operates as a “particular method of politicization by antinomy”, or “a political depoliticization”. [6] Using the methodological tools of the sociology of scientific knowledge, I look to go beyond a reified vision of the “politicization-depoliticization” pairing in order to reveal the process of political production through state provisions and innovations. [7] Far from corresponding to the rational depoliticization that is the supposed automatic effect of the agency model, the debates raised by the reform are seen to constitute a moment for updating legitimate financial policies. During these disagreements, actors within the Treasury administration demonstrated their reflexivity regarding their own ways of working, [8] reiterated their distance from politics (understood in the empirical sense of the minister, his cabinet and parliamentarians) and adapted the relationships they maintained with their environment, i.e. the capital markets and their expectations. In this light, the agency can be seen as a “technology for governing”, [9] an analytical tool that puts public debt policies in order and redefines the frontiers between what is debatable, lending itself to voluntarism and political decision, and what is not up for debate, a sphere that remains the province of the senior civil servants who are experts in debt commercialization. [10]

4In constant dialogue with governments (and the representatives of different executive powers within the Treasury management), the IA promote and prescribe a standardized organizational method of national debt management policies and “best practice” that is oriented toward the development of a transparent structured bond market to ensure government financing. [11] Yet its implementation in France was not entirely a moment of “institutional mimicry” of these international economic policies. The model of international administrative homogenization circulating in institutional and social channels was largely adjusted as a result of national specificities that were thereby restated. Consolidating professional jurisdiction and a separate sphere of action dedicated to debt management reinvented the strategic state, redefining its public service objectives by the yardstick of the exigencies of commercial banks and investors.

The rationale behind “choosing” the agency strategy

5Agencies are described in the mainstream economic literature – by neoclassical and monetarist thinkers as well as by the largely anti-Keynesian school of public choice theory – as the product of rational action, and the enlightened decision by politicians to delegate monetary and financial choices to an independent authority. These theories share a distrust of political figures and a view of them as undisciplined and unstable, entirely driven by electoral contingencies. [12] Their prescribed solution to this problem is isolation and an organizational autonomy designed to shelter monetary and financial issues from the pressure to conform to the desires of governments and voters. [13] It is thus the Independent Central Bank (ICB) that guarantees the stability and predictability of policies by maintaining a low inflation target, which is construed as being naturally good from an economic point of view. [14] This model of “temporal incoherence” considers an ICB to be able to maintain monetary and budgetary discipline by preventing conflicts of agenda between short-term political authority (which it considers to be essentially subservient to the constraints of electoral competition) and the stability of good monetary decisions in the long-term. Politics is seen as the bearer of an “inflationist bias”: as elections approach, governments show a preference for a reduced unemployment rate and policies that favor employment, rather than self-sacrifice in order to maintain the level of inflation initially announced. Faced with such “incoherence”, the government – and by extension society, as its primary client – must delegate to a controlled agency (the ICB) the management of currency and the achievement of the undisputed goal of low inflation. [15] Currency, previously a lever for managing economic policy belonging to the government, becomes an external factor beyond all form of discussion. Supposedly now a “pure instrument”, its management is transferred to an organization purportedly motivated by exclusively procedural logic. [16]

6The political philosophy of this exteriorization, beyond the sphere of government, is to create a system of “checks and balances” distributed in institutions that are separate and relatively sealed off from one another. [17] On this basis, the autonomous management of French public debt would appear to be the next logical step after the Banque de France (responsible for monetary affairs) was given its independence from the government (and thus clearly separated from the Treasury), an event which took place in 1993 with a view to the coming European single currency at the behest of Edmond Alphandéry, Minister of Economy under Prime Minister Édouard Balladur. The goals of deflation and the marketization of debt are set within organizational contexts that objectify them and maintain them at the institutional level beyond the subjective powers of the government. [18] This model is also the vehicle for a political normativity – the pursuit of particular economic choices, such as monetary stability and budgetary discipline – that is presented as obeying pure economic rationality or in the form of functional evidence. The delegation of the function of government financing to an independent debt management agency is presented as more optimal in and of itself, without any need to question the political norms attached to such authority.

The agency strategy: an embedded and bounded rationality

7This type of rational account of the use of agencies can be found within the international “lesson drawing” or “policy transfer” literature. [19] Such analyses tend to overlook the complex, and historically embedded, institutional mechanisms that have contributed to constructing the debt marketing agency as a pertinent issue. [20] Given the long duration of financial and monetary policies, the maximal recourse to capital markets is a bounded rationality for the state, or rather a strategy embedded in a particular socio-technical configuration. Reassuring creditors by reorganizing their own offices constitutes a strategic resource within a framework that has not always existed: the almost exclusive financing of government by national and international capital markets. This historical configuration stabilized around the middle of the 1970s, as a result of successive reforms of monetary and financial structures which allowed governments, after World War II, to finance their deficits off-market via “non-negotiable” debt. [21] In France, a collection of administrative regulations sought to coordinate these different public actions by connecting the Treasury to monetary policy, and to the monitoring of banking liquidity as well as to credit allocation to the national economy. Functioning largely as a banker at the head of a network of investor institutions, the state, via its Treasury, directed banks and financial institutions (public or semi-public) in a hierarchical and sovereign manner, controlling the use of their liquidity, and collecting part of this to feed its own coffers. [22] In France, this combination of guaranteed financing and interest rates decided by administrative authority, in coordination with the CB, was called the “Treasury channel” system. [23] In other countries, following other Keynesian institutional models, the coordination of currency and government financing translated at the organizational level into CBs that were integrated into Ministries of Finance, with little independence and with a mandate not limited to price stability. [24] The rebuilding of procedures and the market framework has required the systematic dismantling of this institutional system of administered debt, and the separation in practice of “budgetary” and “monetary” authorities that classical economics distinguishes only in theory. [25] The independence of the CB, then the autonomy of the Treasury from “politics”, guaranteed the impossibility of a recourse to monetary financing of public debt, preventing the CB from being “forced” to finance the Treasury.

Table 1

The marketization of public debt

States/Debt structures (shift from non-negotiable to negotiable)Evolution of marketization from 1945 to 1993 (except where indicated)Percentage of negotiable debt (commercial) in 1993
France+ 150% (from 39% to 95% = +56)95%
Germany+ 800% (since 1953) (from 8% to 88% = +80)88%
Italy+ 97.5% (from 41% to 81% = + 40)81%
United Kingdom+ 60% (from 51% to 82% = + 31)82%
Belgium+ 31% (from 62% to 81% = + 19)81%
United States- 9.5% (from 75% to 68% = - 7)68%

The marketization of public debt

8In France, the reconfiguration of government financing structures had been under discussion since the beginning of the 1970s within the Treasury administration at the Ministry of Finance, even though the organizational prototype of the autonomous agency was not yet on the minister’s agenda. The goal was to fight the evil of inflation, which was of concern to the public powers at the time, by progressively substituting the financing of government by recourse to compulsory savings – seen to be more “safe and orthodox” – for administered and monetary financing, understood to be a source of laxity. [26] This required the reconstruction of a market for government borrowing that would be attractive at a national and international level.

9The middle of the 1980s marked an acceleration in this process of marketization. Faced with the need to absorb its budget deficit, the left-wing government in power and the technocratic Ministry of Finance administration refused to open the black box of financing tools (linked to currency) and opened the floodgates of liberalization and internationalization of capital markets. A handwritten note from the management of the Treasury, dating from 1987, points to what was then merely a dream among senior civil servants:


“The Director’s collaboration seems certain. We’re going to transform your office into a trading room.” [27]

11The office in question was none other than office A1 at the Treasury, responsible for cash management, financial and monetary affairs, and most notably the issuance of public debt: the ancestor of the AFT. The constraint of conforming to the behavior of the capital market environment was thus reinstated over the long-term mode of action of the administration of the Ministry of Finance. This phenomenon – the contingency of the link and of the degree of the state’s dependency on markets – cannot be understood through approaches that resume the functionalist contractual nature of the relation between a “principal” and its “agent”. These currents of agency theory reduce the conception of politics to the positions of the government in power at the time of the subscription to credible commitment. [28] An analysis of the conflicts and tensions between the administrative sphere – which partly follows its own logic – and political representatives – whose offer toward monetary and fiscal subjects has also been homogenized – is able however to demonstrate how the economic or political “interests” of authority are produced and re-actualized by social and institutional configurations that stabilize the relationship between the national state and its market environment. [29]

12Now reliant on the instrument of capital markets to finance the deficits that they have accumulated over the years, national states entered into competition with one another in order to win over investors and convince them to invest in Treasury bonds. It is this dynamic of state financialization and the pursuit of institutional arrangements preferred by markets (of which the agency model is one component) and which purportedly improve the lender’s credit, that is the real driving force of change. The Holy Grail pursued by the state is liquidity for debt securities, meaning that they can be circulated, sold and exchanged, which does not correlate directly to the fundamentals of public finances – lack of deficit, low level of debt compared to GDP – as commonly understood in orthodox economic thought. In and of itself, the level of debt explains nothing. [30] We should for example remember that Germany (although held up as an incontestable model for the proper management of public finances) and France had almost identical levels of public debt at the point at which the two countries considered a move toward the agency model. In the end, countries with small and weak deficits – public finances considered to be “safe” – pay dearly for their use of compulsory debt markets, precisely because they rarely do so. Their deficits are weakly structured, and their debt is therefore illiquid. [31]

13Intergovernmental organizations, within which administrative national elites, particularly the Treasury, are represented, contribute to the stabilization of the competitive dynamic between issuers of debt securities. They function as platforms of exchange and formalize public policies expected by the actors of capital markets. Progressively a debt management agency “model” – that would subsequently be transposable from one state to another – took shape. It was around the 1980s that the IA began to hold up the model of the agency (or the semi-autonomous office), linked to capital markets, as the norm for debt management. In 1983, the OECD’s first Green Book on government debt management laid out a common framework for different states, preparing the way for the agency doctrine.


“In spite of the diversity in terms of location and other institutional features of debt management offices (DMOs), there is general agreement that DMOs should have sufficient autonomy from the political sphere, and that they should be principally concerned with the operational aspects of the management of sovereign debt.” [32]

15The construction of this norm thus involved separating prerogatives relating to debt issuance from other public policies that were previously closely coordinated by the sovereign power: those of currency, and financial and banking regulation.

Organizational boundaries and the normalization of the state as borrower

16The concept of giving autonomy to a debt management structure aims precisely to maintain, through an organizational boundary, a partition between the goals of monetary policy – now in the hands of the CB, which monitors inflation – and the issues of government financing, the concern of the Treasury, which sells its securities and offers creditors guarantees regarding debt service. [33] The OECD and the IMF issued joint recommendations on the “divorce” and “clear separation” between the management of public debt and the implementation of monetary policy. [34] The agency format is intended to delimit and support a jurisdiction, an area of central administrative competency dedicated to the management of public debt, by isolating the commercialization of loans from any other kind of mandate. This disconnect between the monetary and the fiscal is a vehicle for an analysis of public finances: a diagnostic and an agenda for these public policies. A World Bank working document establishes the brief of the responsibilities of CBs and governments:


“This thinking led to clear and narrow price stability objectives for central banks, to their greater independence from the government and to the prohibition for central banks to finance the fiscal deficit. Debt issuance to parties other than the central bank became the sole formal way to finance the deficit.” [35]

18By blocking recourse to administered or monetary financing (for example, direct financing by the CB), and by preventing “credit facilities”, the agency model is designed to remove all possibility of the state “distorting” the market through political interference. Thus, faced with the reality of their situation, and having to accept the cost fixed by the market (supposedly a safeguard) to finance themselves, public powers should be able to discipline themselves and focus on the strictly budgetary causes of debt.

19The IA naturalize and seal off the process of marketization of public debt in advanced countries. The multiplication of separate or semi-autonomous offices is promoted as the pinnacle of modern administration, and their recommendations, synthesized in their guides and directives for public debt management, become “transitology” by enumerating the natural and desirable stages of development for capitalist societies and economies, with a view to duplicating the administrative model of “advanced” countries in developing countries. The team from the IMF and the Treasury department of the World Bank noted in a joint document in 2001 the methods conducive to constructing and managing a debt market, listing the implicit “pitfalls”: “competition” must be promoted and “privileges” – understood as undesirable “distortions” of sovereign power – must be renounced. [36] The state-debt issuer must normalize itself, becoming a borrower like any other, and giving up its idiosyncratic sovereign characteristics. Through its very design, the debt management office comes to cement the breaking up of public policies by consolidating the division and separation of tasks between monetary policy, banking regulation, and government financing via market debt. Most importantly, the regulatory or administrative practices of debt management – such as the forced subscription by banks of short-term loans, which might serve as a “prudential instrument” for the state – are proscribed as techniques with a tendency to “distort” the true functioning of the market.


“Some pitfalls in debt management:
  • Use of non-market financing channels. In some cases, the practice can be unambiguously distortionary;
  • Special arrangements with the central bank for concessional credit, including zero/low interest overdrafts or special treasury bills.
  • Creating a captive market for government securities. For example, in some countries the government pension plan is required to buy government securities. In other cases, banks are required to acquire government debt against a certain percentage of their deposits. While some forms of liquid asset ratios can be a useful prudential tool for liquidity management, they can have distortionary effects on debt servicing costs, as well as on financial market development.” [37]

21These prescriptions also aim to prevent the sovereign power from putting regulations in place that attribute extraordinary properties to its loans, which would give a biased view of their attractiveness and therefore their real price. The state must conceal its extraordinary status and be evaluated on the same playing field as any other economic and fiscal agent. The role of the IA therefore consists in formalizing, implementing, and transferring models of public policy that engage national states in competition for securing financing on capital markets. Investment companies and holders of compulsory savings, who work globally, support the creation of corresponding institutional infrastructures in each state: a CB that is independent from politics and protects the true value of financial assets from their erosion by inflation, and a “market preserving” debt management office. The aim of the recommendations issued by the IA is to render these changes irreversible. The state is not to be – either now or in the future – in a position to envisage any return to regulatory mechanisms for financing, which are considered to be a threat to financial investments and a form of “fiscal repression”. [38] Trapped in a market environment in order to ensure their survival, states have an interest in conforming to “the expectations of normal roles and criteria instituted in the culture of their organizational field: the imitation of socially valorized forms is seen both as an external constraint and as a strategic resource for the importer”. [39] This competition between states facilitates institutionalized isomorphism, [40] where states’ administrative structures replicate one another in aligning themselves with market expectations in order to legitimize themselves to such markets. [41]

22The IA develop these norms in conjunction with the Ministries of Finance of the different states. Rather than a transfer of public policy where a state – “national receptor” – applies a model of public policy – prescribed by an “international issuer”, the IA – this is an international space of financialized administration, within which common practices are laid out and an emerging market environment becomes the norm. The blossoming of agencies in the majority of OECD countries at the end of the 1990s was not the result of an entirely rational decision on the part of the states: the valid strategies that belong to this new international configuration of the debt market were historically produced and circumscribed by relational structures, and by “institutional factors” [42] connecting the support of the financial markets and the expertise of the IA and concurrent national administrations, transformed into “reform entrepreneurs”. [43] Reforming the debt management unit – in order to remain competitive and to take on debt at the lowest possible price for the state – corresponds to a kind of Realpolitik in a financialized and globalized environment that is no longer examined or questioned by political leaders but instead taken as given. This sphere of multiple incentives has contributed to making the “debt management office” a pertinent option for reform in many different states. National characteristics have however had a strong influence on the construction of a prototype agency adapted to the existing institutional, political, and fiscal context. The institutional solutions and normative frameworks discussed in the international forum of the IA are distorted and continually redesigned by the actual practices of national agents.

The French take on the agency

23The adoption of a standard does not mean that states cannot “generally keep a critical distance from the transferred model, often contenting themselves with adopting its most formal characteristics – for the sake of maintaining or improving their credit in the social field where they carry out their activities – but in the wings, behind the façade of conformity, invent the necessary adjustments based on their own situation, interests, and specific needs”, in the analysis of the political scientist Thierry Delpeuch. [44] At the moment of creating the agency, states allow themselves to “imitate only” [45] those elements demanded by their own interests and to proceed to “formal” innovations, translating a selective, partial, and relaxed adaption of the agency format, finally retaining only the “label”. [46] In addition, the concept of the agency – beyond the idea that it should have a certain degree of autonomy – is malleable, vague, and ambiguous enough to be largely reappropriated and to permit a state to improve its brand image in the eyes of investors without disrupting the administrative order already in place. [47] It was in this manner that the French Treasury approached the idea of the agency. Observing the ongoing reforms in neighboring states from the end of the 1990s, and the evolution of international norms, the Treasury and ministerial leads sought to position themselves in this competitive landscape. Benoît Cœuré, [48] former senior civil servant at the Treasury, and director of the AFT from 2006 to 2008, describes an “international consensus” on the principal of greater autonomy for structures of debt management, referring to the “guidelines for public debt management from the World Bank and the IMF”. [49] New Zealand first paved the way, and in 1997 the United Kingdom proceeded to create its own debt management office, removing it from the remit of the CB to integrate it as a consolidated autonomous body within the Treasury.

24Elements of comparison with the UK can be found in the archives of the French Treasury. Sylvain de Forges, head of the Treasury during this period, made extensive notes on the document issued by the UK Treasury, “The future of UK government debt and cash management: a proposal for consultation”. [50] He seemed enthusiastic and admiring of the project, commenting “nice!” on several occasions, as well as “It looks ideal, at least in principle!”. Reform in the UK was principally justified by the optimized borrowing costs anticipated to follow from proving to the markets that debt was managed above all monetary suspicion, in other words “outside the influence” of the CB and potential “inside information” on interest rates which might benefit debt managers. Regrouping within the Treasury everything relating to the function of issuing debt products, and maintaining a boundary between the two respective areas, was intended to reassure investors and avoid paying an additional risk premium (a higher interest rate) when selling government securities. This clarification of mandates reinforced the CB in its mission to control inflation, removing from this institution the “potential distraction” that debt management might constitute. Sylvain de Forges did also however voice a swift reservation that betrayed French reticence to consider complete externalization of debt management from the Ministry of Finance (or even the Treasury): “Except that it goes straight to a debt management office!” He also felt it inadvisable – “this is less good” – that the UK government’s debt management would be “distanced, as far as possible, from contact with the Monetary Policy Committee, so as to be in exactly the same position as the market with regard to information concerning future or short-term changes in interest rates”. [51] The British approach turned the issuer of public debt into a market actor among others, with hands tied – in terms of monetary power – and blindfolded – in terms of market information and rate policy. Presenting this “self-constraint” as a resource for investors held no weight with the French civil servant.

Negotiating the French formula for a debt management office

25At the end of 2000, it was the turn of the German Federal Minister of Finance, Hans Eichel, to announce the creation of a private limited company to issue sovereign securities that rivaled French products on the compulsory markets – primarily the German bond (the Bund). Reiterating the unrivaled performance of the Bund, Eichel evoked two reasons for reform: “the rapid evolution of the international financial markets”, and “the launch of the single currency”:

“Since the federal debt will no longer benefit from the traditional preference of international investors for the Deutschmark, state lenders in the Euro zone have become direct competitors to the German state.” [52]
With Germany in the race for the “agency” administrative format and seeking to set itself apart, “the time was ripe for such a reform to take place in France”, explains Benoît Cœuré. [53] In 1999, the A1 office responsible for debt management changed its name to “France Trésor”. [54] Jean-Yves Larrouturou, then deputy director of state financing and monetary and banking affairs, confirms that the change from “A1” to “France Trésor” was an act of “publicity”, a “change of label on its publications”. Although the structure of the department was not significantly changed, this modification of the “façade” foreshadowed the need to attach it to a “brand”, “a communication tool” and a sales label that would be attractive in presentations to international investors. [55] But the agency issue cropped up again at the beginning of the 2000s when state modernization projects seemed to gain new life, notably in relation to the Loi organique relative aux lois de finances (LOLF) legislation governing public finances, which was considered to constitute the new financial constitution of the French state.

Political voluntarism and a message to investors

26Following the failure of the project to merge the departments of public accounting and tax undertaken by Christian Sautter, Minister of Economy and Finance in Lionel Jospin’s government, a move which had been opposed by large-scale social mobilization, administrative reform was out of favor at Bercy. [56] The challenge for Laurent Fabius, Sautter’s successor in this role, was to relaunch modernization at the Ministry on less politically risky terrain. Fabius focused on debt management with the aim of making the agency a “laboratory for reform”. [57] For the head of the Fabius cabinet, the creation of the AFT was a “display strategy” that aimed to “push through a program of modernization at the ministry” without provoking strikes or making any waves.


“[We had to] take up the reins of modernizing the ministry after the victory, as you might call it, of opponents to the merger. In the mind of Laurent Fabius, or at least his advisors, there was clearly this idea to carry out a reform in the ministry that would be socially less costly, since it concerned only fifteen people. But which would still, however, be of interest to the press. And behind all this context of the internal management of the ministry, there was the issue of modernizing public finances, of the public management of finance laws. The AFT was one element in a wider program of modernization at the ministry.”

28On 11 July 2000, at the annual “Paris Europlace” conference, Laurent Fabius announced the upcoming creation of the AFT to a room of bankers and investors. His speech makes clear the entanglement of political will and the development of the financial center of Paris as constituting technologies of public debt.


“There are no effective financial markets without an effective economy, and conversely no economy prospers without a solid financial center. The capacity to save, the possibility of raising capital, the dynamism of a country: these are the fundamentals on which success is built. Two conditions at least are required. The first is for public powers to create the favorable environment without which growth and confidence will fail. This is the long-term work that we began three years ago, with three priorities in mind: a return to full employment, lowering taxes, and reducing the deficit and debt. The other condition concerns the transparency, security, and protection of transactions, savers and markets, the formation of actors, and the modernization and adaptation of tools put at their disposal: these are necessities that have become laws.” [58]

30In this spirit, the goal of the state was to ensure the attractiveness of Paris as a financial center through the infrastructures that it introduced, including the reorganization of its own structure. The new agency was also justified as a solution to the reduction of public debt, since its performance should – restricted to issuing public debt on unchanged markets – reduce the burden of interest.


“In this spirit, France Trésor will soon become a Debt Management Office directly attached to the Treasury. It will have new ways of working and will recruit market professionals for a more active management of our debt. This structure will have the reactivity and the visibility necessary for its mission.” [59]

32The reform was therefore framed as modernizing and technological. Some senior Treasury officials nonetheless mocked the small blunders which betrayed the politicians’ opportunism in seizing upon market terminology. Laurent Fabius, for example, was enthusiastic in his speech about the financial innovation of “swaps” in public debt management but, according to someone who was there, he could hardly pronounce this English word:


“At the time Fabius was looking to create a debt management office, he sought above all to present an image of a modified administrative organization that would ‘make things modern’. So much so that he left himself open to ridicule. As he was reading the speech prepared for him, he said: ‘This debt management office will do chouaps’, and the whole room started laughing. He didn’t even know how to pronounce ‘swap’, [60] and he had even less of an idea of what the word actually meant.”

34The concept of the agency emerged from this encounter between the aspiration of political representatives to a modernized administration, the symbolic profits expected to result from this, and the fashioning by national and international administrations of an agenda for the change and adaptation of the state to the demands of financialization. [61] Behind the scenes, the reconstruction of the Treasury offices raised the delicate question of the role of senior officials and their relationship with political representatives. The maximalist vision of a truly autonomous agency – to the point of considering the “detachment” of the future AFT from Bercy – was initially put forward by the Fabius cabinet. One of the goals of the agency standard is to limit, as far as possible, interference and incompatibilities between the job of politics and the job of debt management, and Benoît Cœuré evokes the agency as an adequate solution to the problem of “conflicts of interest” between budgetary policy, monetary policy, and fiscal policy. It was about “delimiting the mandates of different spheres of action of the state”. [62] The long time-frame of debt issuance and the necessary “investor confidence” are seen as tending to “contradict” the other state departments, particularly those urging public spending:


“[…] between different missions of the Treasury (the state issuer encourages the purchase of public credit while the ‘industrial’ state wants to develop the stock exchange), also between the ‘spendthrift’ ministers: the debt manager pleads for debt reduction while the ministers plead famine.” [63]

36The institutional form of the agency is a “shop window” for potential buyers of state securities, and designed to act as a signal for them.

The politics of bureaucratic location

37However, the actual degree of detachment, just like the location of the office supposed to embody “hypermodern” state financial management, provoked debate within the administration. If financial innovation was the goal, why keep the agency at Bercy, within the Ministry of Finance, far from the financial center of Paris (near the Opéra, the Bourse, or La Défense)? Several competing debt management offices are located near financial rather than political centers, including the UK Debt Management Office (in the City of London, rather than in Whitehall), and the debt management office of the Netherlands, which is located in Amsterdam, the country’s financial capital, rather than in The Hague. This physical proximity to the markets arguably demonstrates what matters most: the office’s connection to capital market actors rather than politicians, from whom they are recommended to keep their distance. Often, these locations do reflect the sociological and political nature of the agency: the further an office lies from political and ministerial centers, the greater its autonomy from its parent ministry, and the more it resembles a financial organization or private bank in terms of the profiles and career paths of its staff. Would the quest for modernity in France not be better achieved by moving the agency beyond the walls of Bercy, in order to give it greater visibility and autonomy? A former senior official explains:


“There was a huge internal debate at the Treasury, basically, about whether this new body would be within or outside the Treasury. This conflict was underpinned by a real debate: ‘What would the debt management office look like, and what distance would it need from the ministry in order to function effectively?’ And then there was also the issue of administrative power for the Treasury.”

39Mathieu Pigasse, an ENA (École Nationale d’Administration) graduate who began his career as a junior civil servant in the A1 debt management office, was then technical advisor to the Laurent Fabius cabinet. [64] A fervent advocate of the autonomization of the new agency, he faced reluctance from the Director of the Treasury, who did not want to relinquish control of a strategically important department:


“What we wanted to do at the time was to autonomize management and methods, on the understanding that the Director of the Treasury, Jean Lemierre, was eager to retain it under his authority. The policy of state issuance was the primary sovereign mission of the Treasury… Really we could have given it a lot more autonomy.”

41Sylvain de Forges recounts that he initially refused the ministry’s proposal that he should create and then lead the new office, because he felt that “disconnecting” the agency represented a break with a tradition that “worked”:


“I was explicit with Fabius. I told him: ‘Minister, I’m not interested in working again on the debt, I’ve done that for eleven years. And don’t ask me to do exactly the opposite of what I have built for eight years.’”

43In Germany, the Bundesrepublik Deutschland Finanzagentur GmbH, known more simply as Finanzagentur, was created as a limited public capital company, 100% owned by the federal state. The German debt management office was located in Frankfurt am Main, away from the Ministry of Finance in Berlin. In France, the choice was still to be made regarding the legal structure of the office and the degree of its integration within the Ministry of Finance: should it be a state-owned industrial and commercial entity (an Établissement public industriel et commercial, or EPIC)? Or even a limited company after the German model? There were two options for the “chain of command” at the Treasury: an independent agency, or an agency which remained integrated into the state administration, as part of the established hierarchy. De Forges recounts how he fought against the option of a “Bercy exit”, which he characterizes as “an ancient myth”, and sought to demolish the arguments of the proposal put together by the cabinet. He countered that the reform would attack “the holy of holies” and question the sovereign aspect of the function by separating the activity of issuance, “the casket”, from its parent, the Treasury and the Ministry of Finance. In de Forges’ eyes, the separation of an independent agency could only be an “illusion.” He believed that debt management required the maintenance of a permanent link with political decision-makers, since the “accountability” of management operations was at stake:


“If there was a problem, at the end of the day, it would be the fault of the ministry, and they would be accountable. And if there were financial wrongdoing, or a strategic financial error which lost the state money in that area, it would be the minister of finance who would have to explain himself to parliament or on the evening news.”

45On the other hand, for the advocates of the strong version of the norm, externalization would favor greater reactivity to the markets and would send a strong signal of independence in relation to the aims of the state’s financial mandate. The temporality of “active” debt management, embodied in the agency structure, implied that decisions would be made immediately, akin to those of a trader in a trading room. De Forges, countering this argument, claimed that proximity to the ministry was an asset. It was precisely because accountability remained with the ministry, and because decisions had to be taken “with a heavy financial burden and in a very short time-frame”, that the director of the AFT had to have “direct access” to the ministry. Countering the idea that benefits could only come from full autonomy, the office could actually react more quickly if incorporated within the ministry, as a former senior Treasury official explains:


“If there’s a problem on the markets, you can’t afford to have a board meeting and hold a vote in order to know if a tender should be cancelled or not: the director of the debt management office has to be able to run to the minister’s office. That’s why Sylvain de Forges fought for the agency to be located in the ministry rather than elsewhere. It might have made more sense to situate it elsewhere in Paris, for reasons of extra space, etc. But he wanted to be close to the minister.”

47The complete separation of debt issuance activities was eventually dismissed from the range of possible options. Jean-Pierre Jouyet, Director of the Treasury during the first year of the AFT’s existence, presented this as an emblem of a specifically French administrative culture:


“On the institutional front, we did not want to do what other ‘Treasuries’, notably the Germans, had done, which was to completely externalize the agency from the Treasury department. In fact, it was decided not to separate debt management from the state treasury since they were, in the French tradition, very closely linked.’ [65]

49The compromise finally agreed amounted to a “semi-autonomous agency”, a format that would later also be applied to the Agence des Participations de l’État (APE), which manages the French state’s business holdings. [66] In his interview, Jean-Yves Larrouturou described this as a “neither/nor” solution, a compromise between externalization and the maintenance of the status quo. De Forges eventually accepted the post of the first director of the AFT, which was created by decree on 8 February 2001 as a government agency with national authority (a service à compétence nationale, or SCN), attached to the Director General of the Treasury and Economic Policy and, through him, to the minister:


“As a department of the central administration, the AFT has no ‘special privileges’ in judicial and budgetary terms. Its ways of working are those of the Ministry of Finance. The AFT is not an agency… And it’s not its administrative structure, but its way of working that makes it novel.” [67]

51The choice of the SCN structure for the debt management office appears to equate to what a report of the Conseil d’État called a “tailor-made” format. [68] These agencies, with no legal standing, and legally subordinate to ministerial authority, represent a “desire to both delegate everyday management and also maintain control over the area in question”. [69] This ambiguous legal format allowed the ministry to retain hierarchical authority and facilitated the movement of staff within the rest of the administration. Benoît Cœuré sums up the duality of this French formula where the agency is both “a window of the state onto the financial markets” and a service “in the hands of the minister”:


“The French experience thus shows that it is not necessary for debt management to be entrusted to an independent agency in order to be effective and recognized by market participants.” [70]

53This median position, in turn, became the subject of discussion by international organizations. In 2001, during a presentation at an OECD workshop in Rome, French representatives claimed that moving the agency outside the Ministry of Finance was “pointless”:


“In France, the debate on whether to create a separate debt management agency was opened and closed several times during the 1990s. Finally, in July of 2000, the decision was taken to create Agence France Trésor (AFT), an agency located within the Treasury Department responsible for debt management, cash management and back-office operations. Various factors weighed in the final decision, including issues of democratic accountability, of corporate governance and of the degree of integration between debt management and other public policies. The state’s potential role as financial intermediary taking market positions was discarded.” [71]

55International models and recommendations, therefore, are by no means injunctions to be imposed without the possibility of a filter or process of re-evaluation. In France, reform led to a minimal aggiornamento of the administrative structure which, by remodelling the norm, was able to reconcile the needs of the Treasury, eager to keep this strategic service in-house, with the political will to demonstrate administrative modernization. The organizational reconfiguration was not however without impact on the concrete practices of French financial and budgetary policies.

The reconfiguration of the state and debt policies: commercial performance and budgetary discipline

56The “tailor-made” remodelling of the norm particularly reflected internal power relationships within the administration, which pitted the Treasury department against the rest of the public administration, intentionally labeled as “spendthrift”. This socialization of the French state model also indicates the desire of senior Treasury officials to continue to influence national budgetary policy decisions. The creation of an agency consolidated the existence of a dedicated public debt policy, whose operating resources were augmented in terms of both external communication methods and the employment of market “experts” in sophisticated debt management techniques. The AFT contributed to the department’s evolution toward relative professional autonomy from political authority in its daily affairs. In addition, its prerogatives were refocused in a precise mandate – to issue debt on financial markets at the best price, but securely – that was distinct from monetary, fiscal, and budgetary areas.

Socialization to the markets, socialization to the state

57The institutional reinforcement of public debt issuance and Treasury management was effected by increasing staff numbers and introducing possibilities for new recruitment. From its creation in 2001 the total workforce of the AFT expanded, from 27 staff members in April 2002 to 32, including 19 civil servants, in 2004, and peaked in 2012 at 38. Early on, its budget was also increased due to investment in IT programs: initially granted 6.22 million euros (before the IT program) in 2001, by 2004 this surpassed 8.6 million (of which 2.5 million was dedicated to IT). [72] The SCN format allowed the agency to offer attractive salaries to contractual agents coming from the private sector. While the French form of the office reaffirmed the value of senior civil servants in the promotion of state values and raising of capital, it also sought to attract expertise from banking and private finance by making job offers which might suit new recruits. Over a third of the agency’s staff (and the skills associated with them) came from the private sector. As an OECD study anticipated, the agency format, “by proposing more attractive salaries than those in the civil service” can be useful in “retaining highly qualified personnel from the private sector”:


“Ministries of Finance in general and debt management offices in particular have thus found themselves in competition with the private sector in trying to attract finance professionals (especially those with particular skills in IT).” [73]

59According to the OECD, these recruits would provide managers with increased “prestige” and “credibility” when “negotiating with market participants” and “implementing healthy debt management”. The press also noted the changing profile of the personnel at Bercy, going so far as to evoke a “partial privatization of the state Treasury”. [74] A journalist from Le Figaro described it as “the arrival of the golden boys at the Treasury” who would, alongside senior civil servants, manage the debt with “great flexibility”.

60The AFT developed a risk management service on the back and middle office model of banks and financial businesses. Employees recruited from the private sector worked on the follow-up of deals, debt purchase and sale operations, and at auctions for bonds and Treasury securities. Here, again, the day to day autonomy of teams was decisive. The AFT opened the way to so-called “active” management, a concrete sign that operations were becoming more complex and carried out in narrower timeframes, and that a certain margin of arbitration with market conditions was becoming possible – such as, for example, the state’s use of swaps.

61AFT staff thus went about their work without constantly referring to the minister, and those meetings they did have with the minister focused primarily on the annual fixing of the financing program, or on the launch of a new product. With the Director General of the AFT, the front office teams – the senior civil servants charged with managing auctions and thus the frontline for banks and investors – had in practice a certain room for maneuver within the program of debt issuance debated and voted for by the French national assembly. The “front office” function remained in the hands of senior civil servants and not “pure traders”, to quote a Treasury member of staff. State servants, as graduates of elite universities, have academic backgrounds – including in engineering, economics, statistics, and state administration – that are highly respected by French financial markets. In addition, front office operators were, traditionally, invited to spend a certain amount of time in bank or investor trading rooms before or during their time at the AFT. Retaining civil servants was a way of reaffirming the singularity of this state interface with the markets: although debt was being actively managed, there was no need to assume the mantle of a market actor as “opportunist as the rest” who sought to “take positions in order to beat the market”. The focus on lowering costs was inseparable from the aims of stability and regularity of issuance. The state would offer liquidity to markets and they, in return, would allow the state to borrow on a grand scale. Although knowledgeable about the markets, the staff of the AFT must not get too close to them. For example, the OECD recommends paying front, middle and back office staff very well so that they do not accept the “generous gifts and other rewards from their private sector counterparts”. [75] One senior Treasury official recounted how he enjoyed turning down the offers of dinner from bankers and invited them instead to a rather more modest snack bar near Bercy.

62The agency was thus indeed semi-autonomous: the daily management of borrowing went on with little interference from the minister and political leaders, but it worked within the Ministry of Finance, and with staff familiar with this institution. This stood in contrast to Sweden and Denmark, singled out by the World Bank as models for the most advanced countries in terms of their externalization and the privatization of recruitment for their debt management service. [76]

State credit derived from the political abilities of high-level civil servants

63The proximity of the new AFT office to the minister, an apparent blot on the model, would however be turned into a strategic asset by senior Treasury officials. The latter sought both to remain political actors and to retain the power of their “generalist” position in public policy, and would benefit from a certain blurring of boundaries: this adaptation of the norm to local requirements, and the various forms “of inspiration, combination, and reinvention” that resulted from it, was a “condition of survival for those in power”. [77] Treasury officials did not wish to confine themselves to the pure “function” of the model and promoted the idea that pushing the boundaries in this way actually represented a commercial advantage over other issuers. While the model assumes an opposition between the technicality of debt management (via relationships with banks and investors) and arbitrary sovereign policy, the French example shows on the contrary the ability of senior civil servants to play with this boundary and, in blurring the duality, to leverage the resulting confusion.

64The characteristics of the AFT, which uniquely associated insertion in the state administration with “representation” of French economic policy on the markets, was apparent during promotional “road shows” for French bond products. Seminars presenting French sovereign debt to investors, co-organized with primary dealer banks and partners of the state in debt distribution, were opportunities for the hybrid nature of the agency to be mobilized as a way of seducing investors and differentiating it from the competition. During these road shows, senior civil servants presented France’s financial policies to market professionals and responded to their questions and concerns, which might range from a precise request about a product to a question about the general political situation in the country, the way in which it was introducing a reform or tackling a social movement, a rise in terrorism, the progression of the extreme right, or any kind of political radicalism. Treasury staff took advantage of the agency’s integration within the ministry to sell investors a package of information that went beyond simple debt instrument products, and included the sustainable trajectory of the budget, the job market environment, a tax regime which was profitable for investors and creditors, and the ability to contain inflation. These were the features of France as an “economic fact and social whole” that were expected by investors and which would improve the credit-rating of the French state. [78] With the semi-autonomous agency, as a former AFT agent explains, it became possible to represent and to sell France as a whole, by offering investors expertise on all public policies (e.g. debt, budgets and economic and financial strategies), while the Germany agency, isolated from its ministry, had to confine itself to discussing the range of debt products:


“In Germany, the debt management agency was a limited company in Frankfurt, while the ministry was in Berlin. That’s two hours away by plane, a good distance. The AFT always benefited from a kind of political credit that the Germany agency, made up only of technical experts, didn’t have. I took part in road shows with the head of the German agency, and it was a rather amusing experience. In Asia, the Asian investors would ask: ‘Is the European stability pact working or not?’ They would ask political questions. And the head of the German agency would say: ‘I cannot answer that. My job is to manage the debt. I do not respond to political questions. I have nothing to say. I cannot even comment on the state of the German economy, since that is not my job.’ But I was also a Treasury civil servant, with access to all our briefings on the economic situation. As you can imagine many arguments were advanced, more or less in good faith, to show that everything was going well, since these arguments had to be made for the minister and for the government anyway. So I was comfortable in responding: ‘These are the reforms happening in France. This is the state of our public finances.’ And that gave the agency a more political hue, which interested people and made them want to talk to us because they saw us as a route into the French government. And that was an advantage.”

66Treasury officials, warned by the banks of the concerns of investors, were thus in a position to reassure them and to deploy their political credit. They wanted their presentations to demonstrate that public policies were moving in the direction expected by the markets:


“If a particular group of investors was worried about a particular aspect of economic policy, we had to find technical aspects that would nonetheless reassure them. I used to walk around with a graph that showed the number of strike days in days/people per month, on a twenty-year timeline. I had this graph with me going back to the 1970s. It worked quite well, I could show that the social climate wasn’t all that bad, and above all that it was better than before, compared to the major strikes we had in the 1980s.”

68The proximity of the Treasury to the ministry and state administration sheds light on the way in which the logic of financial markets, to which debt managers were sensitive, was introduced into the heart of politics and the procedures of public service in order to reform this latter along the lines of the globalized commerce of sovereign debt. Since it was understood that the state must secure the best financing and safeguard its credit, Treasury officials could re-emphasize that they were best placed to be guardians of the temple and of long-term financial health within the public administration. Strengthened by this position at the bridgehead of the markets, within the administration they became the self-appointed advocates of the behaviors expected by the state’s creditors.

TPolicing administrative behaviors

69By appropriating the agency norm, senior Treasury officials hoped also to maintain, perhaps even reinforce, their position within the state administration and their relationships with political representatives. The Treasury department preserved the connection between the issuance of debt products and the management of the central Treasury: “Treasury correspondents”, local collectives, and public establishments were obliged to deposit their liquid assets with the AFT. [79] Through a strategy of associating and distancing themselves from the Ministry of Finance as it suited them, senior civil servants reconstructed an administrative policy that played with the boundary between financial affairs and the main features of sovereign power. By representing France in global financial centers, they presented and formalized the assets of the debt issuer and sold “virtuous” budgetary, financial, and monetary decisions that met the needs of capital market professionals. This representation of France on the markets, in turn, conferred important powers on the Treasury with political authorities and other sectors of the public administration alike. Through their contributions to meetings and, simultaneously, through their actions within the state administration, Treasury officials aimed to preserve, maintain and improve the state’s credit. Financial and political credit were seen as one and the same. The result was that the AFT behaved like the financial director of a business with political authorities and the “spendthrift” ministries. Sylvain de Forges thus conceives of the Treasury as an “observation point over the entire immense social body”, and above all a tool through which the entire public administration was held on a leash.


“A Treasury official is always within their rights to say: ‘Wait, I don’t understand, you spent that money, can you explain why? And why did you spend it today? I’d have preferred it if you’d spent it in a week’s time.’ This tool [the Treasury] is really the end of the dog’s tail. If you’re holding the dog there, it can’t walk away, you really have a hold on it! Your ability to monitor the functioning of the state administration has no known limit. And that’s exactly why, for my part at any rate, I insisted that we should not create an agency. Because creating a debt management office would have meant cutting it off from the inside of the state.’

71Treasury officials marked out the space of “good” financial and budgetary choices, which were none other than those that least disturbed the financial management of the state. The retention of the agency within the state administration worked as a tool of budgetary discipline. By remaining visible and located within the walls of the government, the agency was a material representation of the constraints of financing; externalizing it would have been tantamount to disembodying it. The balance of the French agency format is a pedagogic vehicle: the presence of the AFT is a permanent reminder of the need to put everything into maintaining the state’s credit so as to ensure the continuity of the public administration. The IA, prescribing the norm, had anticipated the importance of the agency model in communicating the message of financial constraint to other state bodies responsible for “spendthrift” public policies.


“Debt managers should ensure that the fiscal authorities are aware of the impact of government financing requirements and debt levels on borrowing costs. Examples of indicators that address the issue of debt sustainability include the public sector debt service ratio, and ratios of public debt to GDP and to tax revenue.” [80]

73According to the logic of the model, although some marketed public debt is required, it must be controlled and kept sustainable so that a major crisis situation does not lead to the brutal return of politics via a default, cancelation, or restructuring of the debt. The organizational compromise which created the agency stabilized the schemes of action for public finances: issuing debt in line with market expectations, shorn of extraordinary privileges – such as the linking of the treasury to monetary and banking regulation, seen as a distortion of the market – and limiting, if not the deficit, at least public spending. This structure and the financial securities it created underpins a particular analytical approach to public finances. Acting as an interface between government policy and market expectations, this structure converted its position – at the heart of the state where it “represents” the French economy as a whole – into a strategy for investors. Conversely, within the state, the AFT turned itself into the established voice of the investor community, petitioning the minister for decisions that would be favorable in maintaining its political credit and its link with the capital markets.

74* * *

75Revitalized by the French administration, the agency norm objectifies an institutional arrangement that connects the international financial community, political representatives, and public administration in a unique framework. In France, ministers supported financial innovation and the creation of an agency, which was itself appreciated and welcomed by the markets, along with the development of the financial center of Paris in the competitive interest of France. The key positions in this state department, which remains within the circles of sovereign power, are held by senior civil servants looking to reconcile the requirements of the banks and market operators, considered as partners, with the interest of the citizen-taxpayer in reducing the burden of debt as far as is possible within the accepted market framework.

76Alignment with market interests therefore varies with the form of the organization and the national arrangement. In France, departments routinely act autonomously, but under the supervision and the responsibility of the ministry. The authorities take advantage of the minimal conformity to international administrative norms in order to reduce their borrowing costs and debt burden, and thus meet the needs of public service. Far from marking the end of the state’s power, the administrative organizational framework engendered by the comparison and competition between states for financing on capital markets has directed the knowledge and skills of senior civil servants toward new strategic areas. Serving the public interest consists of developing financial innovation, wielding influence in a reorganized international universe, and ensuring low interest rates on state loans. [81] Herein lies the ambiguity of this new form of strategic state, which is considered to be even more strategic because it adapts to the interests and expectations of private financial participants. [82]

77The agency is not therefore a neutral format, or a simple technical response by sophisticated experts to a complex problem – international financing on the capital markets. The fact that senior civil servants went along with marketization, albeit according to a specifically French logic, in turn ratifies and reinforces the international framework. While the agency format does not signify the seizure of the state by the markets, nor does it leave the state or the legitimate definition of public interest intact. A shop window for investors and the source of cheap financing – constrained by a market that is taken as given – the AFT coerces the administration in return. On the markets, its name sets the tone for good policy, which conforms to financial orthodoxy and the defense of debt quality: weak inflation, and an attractive financial center that does not obstruct international investment through its regulations or tax regime. As a point of contact for the markets and a facilitator of their aspirations, the AFT embodies financing constraints within the administration and perpetuates the injunction for budgetary discipline. [83]

78The AFT thus goes a step further by taking into account the expectations of capital markets in order to formulate economic policy strategies. The agency proposes not depoliticization but the reconfiguration of politics: a reconfiguration of voluntarism – going further in supporting the infrastructure of market finance – but also of the rationality of the state, which seeks to optimize the performance of its products in the manner of a calculating agent in competition with other debt issuers. [84] The interest of the citizen, defined essentially as a “taxpayer”, is represented and “appropriated” by senior civil servants whose profile, identity, and mission persona are a hybrid of public service culture and the demands of the financial community. [85] This administrative commitment to the rationality of the state marks the current peak of ongoing efforts to align at a national and international level the interests of administrative organizations and private organizations on the financial markets. [86]

The English version of this article is published with the support of the CNRS

Debt management agencies around the world

CountryDate of principal reformName of bodyLocationDebt/GDP at time of creation of the StructureDebt/GDP in 2001
Germany2000Bundesrepublik Deutschland Finanzagentur GmbH or FinanzagenturLimited company 100% owned by the federal state58.7%57.8%
GGreece1998Public Debt Management Agency (PDMA)Within the ministry of finance105.8%114.4%
Sweden1989Reform of the Swedish National Debt Office (SNDO) or RiksgaldskontoretFrom parliament within the ministry of finance+/- 50%51.7%
Ireland1990National Treasury Management Agency (NTMA)Separate from the ministry of finance93.5%33.4%
Denmark1992Danmarks NationalbankCentral Bank+/- 70%48.5%
Austria1993Debt Management Office of the Republic of Austria
Within the ministry of finance60.8%66.5%
Portugal1997Portuguese government
Debt Agency Agência de Gestão da Tesouraria e da Dívida Pública
Separate from the ministry of finance55.2%56%
United Kingdom1997 – 1998United Kingdom Debt Management OfficeFrom the Central Bank to the Treasury46.9%36.2%
New Zealand1988New Zealand Debt Management Office (NZDMO)Within the ministry of finance57.8%34%


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    CAEF, Ministry of Finance, Note from Christian Noyer to Jean-François Pons, 13 February 1987.
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    At best, these analyses seek to build on principal-agent theory by taking into account the criticisms of “democratic incoherence” to which it is subject, such as the fact that between the creation of the agency and subsequent changes, the government’s preferences may change. For a normative approach of this type applied to the case of the European Central Bank, cf. Robert Elgie, “The politics of the European Central Bank: principal-agent theory and the democratic deficit”, Journal of European Public Policy, 9(2), 2002, 186-200.
  • [29]
    Rawi Abdelal, “Constructivism as an approach to international political economy” in Mark Blyth (ed.), Routledge International Handbook of Political Economy (New York: Routledge, 2009), 62-3.
  • [30]
    I see no systematic correlation between the evolution of the level of debt compared to GDP and the adoption of the “debt management agency” model (cf. Annex table). Debt stocks sometimes fall drastically following the creation of an agency – as was the case in Ireland, New Zealand, Hungary, and Denmark – while other debts continue to grow after their implementation – moderately so in Austria and Sweden, more definitely and progressively in France and in Germany, and in a dramatic fashion in Greece. Understanding the growth or the reduction of the debt level requires the consideration of multiple factors (tax ratio compared to expenditure, structural savings plan, privatizations of public services, interest rates, etc.).
  • [31]
    In their interview, a senior civil servant from the Treasury illustrated this phenomenon with the examples of Finland and Luxembourg.
  • [32]
    This first Green Book focused “on the institutional characteristics of debt management offices” (Lars Kaleren, “The role and structure of debt management offices” in Hans Bloomenstein (ed.), Debt Management and Government Securities Markets in the 21st Century (Paris: OECD, 2002)).
  • [33]
    Benjamin Lemoine, “Discipliner l’État par sa dette: la mise en marché et la sectorisation du ‘problème’ de la dette publique” in Charlotte Halpern, Pierre Lascoumes, and Patrick Le Galès (eds), L’instrumentation de l’action publique. Controverses, résistance, effets (Paris: Presses de Sciences Po, 2013), 367-96.
  • [34]
    Cf. the shared OECD-IMF project from 1995-1996 on the coordination of monetary policy and the policy of public debt management, a study of fourteen countries from the OECD zone and emerging economies published in 1997: V. Sundararajan, Peter Dattels and Hans J. Blommestein (eds), Co-Ordinating Public Debt and Monetary Management (Washington: International Monetary Fund, 1997).
  • [35]
    Elizabeth Currie, Jean-Jacques Dethier and Eriko Togo, “Institutional arrangements for public debt management”, Policy Research Working Paper, 3021, The World Bank Development Economics, March 2003.
  • [36]
    World Bank, IMF, Guidelines for Public Debt Management, DC/2001-0002, 30 March 2001. The World Bank authors highlight the example of Sweden and its interinstitutional instruments shared between the Treasury and the Riksbank, which “work for both state financing and monetary policy”.
  • [37]
  • [38]
    The literature on administrative delegation explains that the judicial and institutional provisions relating to monetary policy or the management of public finances are “costly” to modify once implemented. Cf. Douglass C. North and Barry R. Weingast, “Constitutions and commitment…”.
  • [39]
    Thierry Delpeuch, “Comprendre la circulation internationale des solutions d’action publique: panorama des policy transfer studies”, Critique internationale, 43(2), 2009, 153-65.
  • [40]
    Paul J. DiMaggio and Walter W. Powell, “The iron cage revisited: institutionalized isomorphism and collective rationality in organizational fields”, American Sociological Review, 48(2), 1983, 147-60.
  • [41]
    Tomas Magnusson, Director and the General Counsel of the Swedish National Debt Office, “The institutional and legal base for effective debt management”, paper given at the Third Inter-Regional Debt Management Conference, organised by UNCTAD, Geneva, 3-5 December 2001; Donna Leong, “Debt management: theory and practice”, UK Treasury Occasional Paper, 10, April 1999; Graeme Wheeler, “New Zealand’s experience with autonomous sovereign debt management”, Treasurer, New Zealand Debt Management Office, November 1996.
  • [42]
    Martin Lodge, “Institutional choice and policy transfer: reforming British and German railway regulation”, Governance: An International Journal of Policy, Administration, and Institutions, 16(2), 2003, 159-78; Diane Stone, “Transfer agents and global networks in the ‘transnationalization’ of policy”, Journal of European Public Policy, 11(3), 2004, 545-66.
  • [43]
    Shaun Goldfinch, “Remaking New Zealand’s economic policy: institutional elites as radical innovators 1984-1993”, Governance: An International Journal of Policy and Administration, 11(2), 1998, 177-207.
  • [44]
    Thierry Delpeuch, “Comprendre la circulation internationale…”, cited above.
  • [45]
    W. Jacoby, Imitation and Politics, Redesigning Modern Germany (Ithaca: Cornell University Press, 2000).
  • [46]
    Even if we can see, as in the case of France, how the norm is appropriated and adapted to a local context. Cf. F. Gilardi, M. Maggetti, “The policy-making structure of European regulatory networks and the domestic adoption of standards”, Journal of European Public Policy, 18(6), September 2011, 830-47.
  • [47]
    D. P. Moynihan “Ambiguity in policy lessons: the agencification experience”, Public Administration, 84(4), 2006, 1029-50.
  • [48]
    Benoît Coeuré is now a member of the Executive Board of the ECB. He was second in command of the general management of the Treasury in the Ministry of Finance as “chief economist”.
  • [49]
    Benoît Coeuré, “L’Agence France Trésor, quatre ans après”, in the special issue “Réformes au MINEFI: adaptations ou mutations?”, Revue française de finances publiques, 89, 2005.
  • [50]
    CAEF, Ministry of Finance, PH 148/00, Box 1/A-129 “système à l’étranger”, document dated 29 July 1997, drafted by Dr Paul Mills.
  • [51]
  • [52]
    Les Échos, 17 February 2000.
  • [53]
    In interview, Christian Noyer, former Treasury director and governor of the Banque de France, made gently ironic reference to the “fashion” at the time for multiplying agencies.
  • [54]
    Dominique Strauss-Kahn was Minister of Economy and Finance at the time.
  • [55]
    Phrases in inverted commas are taken from interviews with former Treasury senior civil servants.
  • [56]
    The Jospin government was in power from November 1999 to March 2000.
  • [57]
    In the words of Sylvain de Forges.
  • [58]
    Speech by Laurent Fabius, Minister of the Economy, Finance and Industry, Paris Europlace Conference, 11 July 2000.
  • [59]
  • [60]
    A financial instrument, a contract permitting the exchange (of rates or currency) of cash flow between two parties, generally banks or financial institutions.
  • [61]
    Cf. Martin Lodge, “The importance of being modern: international benchmarking and national regulatory innovation”, Journal of European Public Policy, 12(4), 2005, 649-67.
  • [62]
    Benoît Coeuré, “L’agence France Trésor, quatre ans après”, cited above.
  • [63]
    Benoît Coeuré, ibid.
  • [64]
    He became acting partner at the Lazard Bank in 2002.
  • [65]
    Jean-Pierre Jouyet, in the Annual Report of the AFT, 2000/2001.
  • [66]
    On the typology of agencies and quangos, cf. Christopher Pollit, Colin Talbot (eds), Unbundled Government. A Critical Analysis of the Global Trend to Agencies: Quangos and Contractualisation (Abingdon: Routledge, 2004).
  • [67]
    Benoît Coeuré, “L’Agence France Trésor, quatre ans après”, cited above.
  • [68]
    “Les agences: une nouvelle gestion publique?”, Les rapports du Conseil d’État, Annual Report 2012, 40.
  • [69]
    Ibid., 47-8.
  • [70]
    Benoît Coeuré, “L’Agence France Trésor, quatre ans après”, cited above.
  • [71]
    Sylvain de Forges, presentation to an OECD Workshop, Rome, 2001; Elizabeth Currie, “Update on European DMO”, 2000, mimeographed.
  • [72]
    Benoît Coeuré, “L’Agence France Trésor, quatre ans après”, cited above; “Les agences: une nouvelle gestion publique”, cited above.
  • [73]
    Lars Kaleren, “La gestion de la dette publique…”, cited above.
  • [74]
    “Des ‘golden boys’ au Trésor: une agence autonome gérera la dette de l’État”, Le Figaro, 7 December 2000.
  • [75]
    Lars Kaleren, “La gestion de la dette publique…”, cited above.
  • [76]
    “Agencies that, with streamlined administrative procedures, would benefit from a working environment adapted to rapid decision-making” (E. Currie et al., “Institutional arrangements…”).
  • [77]
    Jean-Michel Eymeri-Douzans, “Les réformes administratives en Europe: logiques managérialistes globales, acclimatations locales”, Pyramides, 15, 2008, 71-94.
  • [78]
    Michel Callon, Cécile Méadel and Vololona Rabeharisoa, “L’économie des qualités”, Politix, 13(52), 2000, 211-39.
  • [79]
    Treasury correspondents are bodies that, through legislative or regulatory obligation, or by convention, have an account in the Treasury’s books, open to a public accountant. On 31 December 2013, the outstanding amount of correspondent deposits in the Treasury account totalled 127.7 billion euros.
  • [80]
    World Bank, IMF, Guidelines…, cited above.
  • [81]
    Between 2002 and 2011, the effect of the “real” reduced debt burden is difficult to judge due to constant fluctuations. For example, after the 2002 budget implementation it was 40,691 million euros, then dropped to 38,941 euros in 2006, then rose to 45,382 euros during the development of the 2001 Law on Finances. It would be unwise to attribute these figures to the performance (or counter-performance) of the AFT alone.
  • [82]
    Philippe Bezes, “Le modèle de ‘l’État-stratège’: genèse d’une forme organisationnelle dans l’administration française”, Sociologie du travail, 4, 2005, 431-50.
  • [83]
    The fact that public deficits are growing does not mean that the debt instrument on the markets is at the service of the social state: deficits can be attributed to numerous other factors, including fiscal spending, and tax cuts made in the name of growth and the competitivity of the economy.
  • [84]
    Roi Livne and Yuval P. Yonay, “Performing neoliberal governmentality: an ethnography of financialized sovereign debt management practices”, Socio-Economic Review, 14(2), 2016, 339-62.
  • [85]
    Rémi Lenoir, “L’État selon Pierre Bourdieu”, Sociétés contemporaines, 87, 2012, 123-54.
  • [86]
    I would like to thank Philippe Bezes, Patrick Le Lidec, and Vincent Gayon, as well as the anonymous peer reviewers of the Revue française de science politique who commented on and discussed this article.

This article analyzes the implementation in France of an international bureaucracy standard for debt management in the early 2000s. Shaped by international organizations to send a credible message to financial investors concerning the technicization and depoliticization of debt, the agency format was redesigned to suit the specificities of the domestic government. Far from being an example of the rational, voluntary depoliticization automatically proposed by the model, the controversies raised by the design of Agence France Trésorprovide new insights into the demands of the global capital environment, the desire for reform of political representatives, and the political capacities of the Treasury Department and civil servants.

Benjamin Lemoine
A researcher in political science and sociology of economics at the CNRS (Centre National de la Recherche Scientifique), Benjamin Lemoine has been based at the Université Paris Dauphine and the Institut de Recherche Interdisciplinaire en Sciences Sociales (IRISSO), PSL Research University, since 2013. He recently published L’ordre de la dette: Enquête sur les infortunes de l’État et la prospérité du marché (Paris: La Découverte, 2016); “Measuring and restructuring the state: debt metrics and the control of present and future political order” in Desmond King, Patrick Le Galès (eds), Transforming European States (Oxford: Oxford University Press, 2016); and has previously published “Les ‘dealers’ de la dette publique: politique des transactions entre banques et État dans la grande distribution des emprunts français”, Sociétés contemporaines, 92(4), 2013, 59-88. He is currently studying the links between diplomacy, capital markets, and states in the restructuring of sovereign debts (IRISSO, Université Paris Dauphine, PSL Research University, bureau B611 bis, place du Maréchal de Lattre de Tassigny, 75775 Paris cedex 16).
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