Governing with Debt: How the Bond Market Disciplines Democracies

Public debt is once again presented as an unavoidable constraint on democratic life. After the brief suspension of fiscal orthodoxy during the COVID-19 crisis, austerity has returned with renewed force, narrowing political choice and redefining social priorities across Europe and beyond. In 2024, the reinstatement of EU deficit rules-alongside carve-outs for escalating military spending-made clear that the debt order was never truly disrupted, only momentarily suspended.
This book argues that public debt is not a neutral technical problem but a powerful political instrument. Behind the language of "best practices," risk management, and market confidence lies a system that disciplines states, reshapes social contracts, and transfers power from democratic institutions to financial markets. By issuing debt to satisfy global investors, governments increasingly subordinate welfare, public services, and redistribution to the imperatives of asset protection and profitability.
Tracing the transformation of sovereign debt into a marketable commodity, the book reveals how Treasuries and central banks have come to operate as infrastructures of financial power, securing private interests while presenting austerity as fiscal common sense. Drawing on historical analysis and original sociological research, it reconstructs the rationales, conflicts, and institutional arrangements that sustain this regime.