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Research

Research interests

Comparative Sociology, Political Economy, Economic Sociology (the Political and Cultural Embeddedness of Markets), Institutional Theory, Quantitative and Qualitative Methods

Projects

States as Risk Managers: The Spread of Financial Innovations among German and U.S. Governments

This project aims to shed light on the spread of derivatives among subnational governments from a comparative perspective and asks the overarching research question: Why did governments adopt derivatives and continue to do so – despite the risks they embody and the significant losses that occurred? Since the mid-1980s derivatives have entered the public sector at the national and the sub-national level as modern instruments in the management of public debt. While this financial innovation is employed to manage risks, finance officers expose themselves towards new risks – such as counterparty risk and termination risk. Thus, not surprisingly, numerous cities, schools, and public utilities all over Europe and the USA have experienced severe losses as a result of their derivatives transactions in the past decades. Nevertheless, many public authorities continue to use those instruments and professionals continue to promote them as modern financial tools in the management of public debt. The phenomenon is approached from state-centered perspectives in political economy and the sociology of markets. Both a quantitative analysis of derivatives usage by subnational governments and several comparative case studies on the expectations and preferences of market participants in Germany and the US will be conducted in order to extend our knowledge on the relationship between states and financial markets. 

Financial market regulation after the crisis

Dissertation: moral categories and institutional change: the regulation of derivatives in the USA

How do moral ideas influence institutional change? I combined insights from economic sociology and political economy to conceptualize a causal mechanism composed of delegitimation and shifting power relations: Moral ideas can be used by opponents of the status quo to delegitimize powerful interest groups. This strengthens the position of legitimate groups and weakens that of illegitimate groups in negotiations with policy makers. The argument was tested for the case of derivatives regulation in the USA (2008 - 2010). The case study shows that business associations and consumer groups mobilised the historical distinction between hedgers and speculators to differentiate themselves from financial investors and to delegitimise the financial industry. Business and consumer groups directed attention towards the moral aspect of derivatives and thereby increased the salience of the issue. While business groups (as hedgers) were perceived as speaking for society as a whole, the low moral status of the financial industry (as speculators) prevented the exercise of its power. The financial industry lost because it lacked moral legitimacy. The project contributes to the literature on business power and institutional change in financial markets by demonstrating how moral ideas shape power relations. 

Countermovements and veto players: paths to industry regulation in the case of the financial transaction tax in Europe 

(co-authored with Jan-Christoph Janssen, ISS University of Cologne)

A further project examines varying national responses to the financial crisis in Europe in the case of the financial transaction tax. To this end, data on the extent of financialization, the costs of the financial crisis, the presence of industry lobbying as well as the presence of countermovements and public support was collected for 27 European countries. The findings of a qualitative comparative analysis (QCA) suggest that low financialization is a necessary condition for a preference for regulation. Furthermore, governments of those countries where financialization is low, have a strong and stable preference for the tax if a national countermovement exists and is broad (includes both consumer and labor interests).