Regulating American Industries: Markets, Politics, and the Institutional Determinants of Fire Insurance Regulation

Abstract

This article assesses three approaches to state regulation: capture theory, interest group analyses, and neoinstitutional research. Statelevel event history analyses of fire insurance rate regulation from 1906 to 1930 are used. Contrary to capture theory, regulation was not driven simply by firms' interests in market control. Instead, consistent with interest group analyses, regulation was more likely when anticompany forces-farmers and small businesses-could challenge big business politically. Further, as neoinstitutional research suggests, regulation was more likely when industry governance evoked legitimacy crises, when courts and professions endorsed regulation and its underlying models, and when states developed system-wide administrative capacities. Institutional conditions also mediated the effects of markets and politics on regulation. Using these findings, we develop a theory of how political and institutional conditions shape industries' governance options.

Social Movements and Institutional Analysis

“…They also evoked supra-state or field-wide process in which courts and the professions endorsed regulation, promulgated model laws, and built field-wide administrative organs. Taken together, these institutional processes shifted the balance of power within states, crystallizing insurance around economic models and regulatory solutions that settled political struggles over industry governance (see also Schneiberg 1999Schneiberg , 2002Schneiberg & Bartley 2001). …”

“…By blocking anti-takeover legislation, securing new proxy rules, and so on, shareholder activism at state and federal levels created critical opportunities for mobilization against and within corporations. The fractured and multi-level structure of institutions also enabled anti-corporate groups to get insurance rate regulation on the states' agenda in the early twentieth century (Schneiberg & Soule 2005;Schneiberg & Bartley 2001;Schneiberg 1999). Challengers seeking decentralized, producer republican models of economic development were largely closed out of policy making and had little leverage for their regulatory ambitions in New York, Connecticut and other centers of the 'insurance combine.'…”

Theorizing command-and-commodify regulation: the case of species conservation banking in the United States

“…Examples include specific prescriptions for action outlined in administrative rules, including legal precedent (Schneiberg and Bartley 2001;Quinn 2008); the passage or dissolution of laws constraining particular exchanges (Vogel 2012;Funk and Hirschman 2014); and even the direct use of state-sponsored physical coercion and violence to force actors to take particular actions, or to make space for particular markets (Levien 2013). As in the case of economic power discussed above, movements, mobilization, and contention, including political battles over the morality and cultural embeddedness of particular market exchanges (e.g.…”

Understanding risk governance: Introducing sociological neoinstitutionalism and foucauldian governmentality for further theorizing

“…While both theories agree that organizations strive for legitimacy, they diverge on the motivations and the conditions under which it is attained. What neoinstitutionalism treats as social alignment within the prevailing rational or just order (Schneiberg and Bartley 2001), governmentality sees as oppression even though no single party can be identified as the oppressor.…”