Journal Article

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

Stefano Pagliari and Kevin Young

in Socio-Economic Review

Volume 14, issue 2, pages 309-337
Published in print April 2016 | ISSN: 1475-1461
Published online October 2015 | e-ISSN: 1475-147X | DOI: https://dx.doi.org/10.1093/ser/mwv024
The interest ecology of financial regulation: interest group plurality in the design of financial regulatory policies

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  • Moral Philosophy
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Existing literature has offered a variety of claims regarding why financial regulatory politics features a relative dominance of the regulated financial industry. In this article, we explore the broader interest group environment in which financial industry advocacy operates. Using new data on interest group participation in financial regulatory consultations, we provide the first comprehensive analysis of the ecology of interest groups that populate financial regulatory policymaking. Through a new measure of ‘mobilized dissent’, we find evidence that the level of interest group pluralism in financial regulatory policymaking is constrained by the limited mobilization of voices outside of the business community. We analyse how mobilized dissent towards the regulated financial industry changes in response to different institutional environments. While technical complexity, institutional context and the global financial crisis are found to impact the level of mobilized dissent, the impact of these environmental conditions varies across different groups. This analysis reveals not only that organized opposition to the financial industry is relatively weak, but also that it is relatively disjointed.

Keywords: financial regulation; interest groups; lobbying; political economy; P16 political economy; K2 regulation and business law

Journal Article.  11888 words.  Illustrated.

Subjects: Moral Philosophy ; Corporate Social Responsibility ; Welfare Economics ; Political Economy ; Economic Sociology

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