Capital united? Business unity in regulatory politics and the special place of finance

Abstract

While organized business is a key actor in regulatory politics, its influence is often conditional on the level of unity or conflict occurring within the business community at any given time. Most contemporary regulatory policy interventions put pressure on the normal mechanisms of business unity, as they are highly targeted and sector-specific. This raises the question of how business unity operates across a highly variegated economic terrain in which costs are asymmetric and free-riding incentives are high. In this paper, we empirically assess patterns of business unity within regulatory policymaking across different regulated sectors. Our analysis utilizes data from hundreds of regulatory policy proposals and business community reactions to them in the telecommunications, energy, agriculture, pharmaceutical, and financial sectors over a variety of institutional contexts. We find considerable empirical support for the "finance capital unity" hypothesis -the notion that the financial sector enjoys more business unity than other regulated sectors of the economy. When the financial sector is faced with new regulations, business groups from other sectors frequently come to its aid.

The interest ecology of financial regulation: interest group plurality in the design of financial regulatory policies

“…For example non-business groups such as consumer protection groups, NGOs, unions, and research groups will tend to mobilize dissent more in tandem with one another than in concert with business groups. The mobilized dissent from non-financial businesses groups is more strongly correlated with the mobilization of the rest of the financial sector and research groups than trade unions and consumer protection groups (see also Young and Pagliari 2015). Additionally, some groups' level of mobilized dissent are negatively correlated with one another: in particular between civil society groups and the rest of the financial sector.…”

“…First, most studies of interest groups in financial regulation have focused on specific policies, institutions or actors through in-depth qualitative case studies (Lall, 2012;Quaglia, 2008;Woll, 2013;Mügge, 2006), thus making a general overview of this terrain difficult to ascertain. While this qualitative literature has greatly informed the hypotheses we test, our analysis complements existing scholarship through a quantitative analysis aimed at observing general but context-varying trends in the participation of interest groups in financial regulatory politics (see also Young and Pagliari 2015). Using new data from financial regulatory consultations from 1999 to 2013 we develop a broad survey of which groups are mobilizing during financial regulatory policymaking in this arena.…”

Regulators and the quest for coherence in finance: The case of loss absorbing capacity for banks

“…One line of argumentation could be that the financial industry, especially internationally active banks and cross‐border financial institutions, have incentives to promote regulatory coherence, as this reduces their costs of complying with different sets of rules. However, other scholars have emphasized the heterogeneity of the preferences of different financial industry actors (Young and Park ; Young and Pagliari ), especially those of banks which are embedded in distinctive domestic banking systems (Howarth and Quaglia ). From this standpoint, banks have an incentive to seek rules specifically tailored to their business model and domestic context, leading to regulatory fragmentation.…”

How Do Ideas Shape National Preferences? The Financial Transaction Tax in Ireland

“…This third dimension of power points toward a means of exercising influence that is both institutionally routinized and that is based on an ideational interpretation of how the world works that shapes the expectations of the various actors. Power of this sort may be exercised through holding a monopoly on relevant knowledge, as in the case of the opaque practices of the shadow banking sector or the development of complex investment products (Young and Pagliari 2017, Ban and Gabor 2016, Ban, Seabrooke, and Freitas 2016, Ban and Gabor 2017. We are interested in understanding the influence of the financial sector over policy on the European FTT though, and this does not, on the whole, involve specialist or insider knowledge.…”