young and pagliari - the interest ecology of finance: an empirical assessment - isa 2014
TRANSCRIPT
The Interest Ecology of Finance:
An Empirical Analysis
Kevin Young & Stefano PagliariUMass Amherst City University [email protected] [email protected]
Purpose of the Paper: Interest
Groups and Financial Regulation
Existing Literature
Focus on financial industry
Focus on selected policies, and institutional contexts
Qualitative methods, case study approaches
„Population ecology‟ approaches to interest groups (e.g. Gray & Lowery 1996)
Mobilization is conditioned by the environments in which interest groups find themselves and the interaction among different interest groups in the mobilization process
Take a comprehensive account of the entire population of interest groups, from 10,000 feet
What does financial
regulatory lobbying look like?
•H1: The more complex the financial regulation, the lower interest group plurality. Complexity
•H2: Interest group plurality increases during times when financial regulation is salient Issue Salience
•H3: The earlier in the policymaking process, the less plural the interest groups involved.Stage in the policymaking
•H4: Regulatory policymaking by legislatures is associated with more plurality than regulatory policymaking by bureaucracies. Policy venues
•H5: International regulatory policymaking will be associated with less plurality than national regulatory policymaking. International policymaking
• H0a: The predominant stakeholders in financial regulation are business groups
Business dominance
• H0b: Within the business community, the predominant stakeholders in financial regulation are business groups from the regulated industry.Regulatory Capture
How plural is financial regulatory lobbying?
What environmental factors affect interest group plurality?
Mapping the Interest Group
Ecology of Finance
Source: 13,189 comment letters in response to 291 different financial regulatory consultations
Institutional venues
National: US, UK, Canada, Germany, Switzerland, Australia
Regional: EU
International: Basel Committee, IOSCO, FSB
Period: 1999 to 2013
Coding Procedure
Mobilization: identity of groups who responds to regulatory consultations (sector and industry)
Preferences towards regulatory status quo
Business Dominance Hypothesis
H0a: The predominant stakeholders in financial regulation are business groups
Regulatory Capture Hypothesis
H0b: Within the business community, the predominant stakeholders in financial regulation are business groups from the regulated industry.
How systematically do different categories of
groups appear, under different environmental
conditions?
…multinomial logit (pr. of group occurring)
…linear regression (proportion of group in mix)
Cluster SE by policy consultation
Control for size of consultation
Matching where imbalance
Salience & the Financial Crisis
H2: Interest group plurality increases during times when financial regulation is salient
Stage in the Policymaking
Process
H3: The earlier in the policymaking process, the less plural the interest groups involved.
Technical Complexity
H1: The more complex the financial regulation, the lower interest group plurality.
Policy Venue: Legislative vs.
Bureaucracies
H4: Regulatory policymaking by legislatures is associated with more
plurality than regulatory policymaking by bureaucracies.
Governance Level (National
vs. International)
H5: International regulatory policymaking will be associated with less plurality than national regulatory
policymaking.
What do they want? Analyzing
groups preferences
Stratified random sample of 1271 response letter from 61 financial regulatory consultations
Coding: 3 point scale (Yackee and Yackee 2006)
Less stringency than the proposed regulation
Support for proposed regulation
More stringency than the proposed regulation
0.2
.4.6
.8
Rest of FinanceNon-Financial Businesses
Labour UnionsConsumer
ResearchNGOs
high/low mean
Solidarity with Regulated Financial Industry
.2.4
.6.8
1
Rest of FinanceNon-Financial Businesses
Labour UnionsConsumer
ResearchNGOs
high/low mean
Divergence with Regulated Financial Industry
Conclusion
Find evidence against the “unified dominance” model of the financial industry (Porter and
McKeen-Edwards 2012)
Plurality is a function of different conditions
Technical complexity, salience make a difference,
but only for some groups and not others
„Level‟ of policymaking and venue matter; stage
does not.
The majority of „dissent‟ is likely to be found within
the business community, not outside it.