Power Elites and Club-Model Governance in Global Finance

Abstract

Why and how have pre-financial crisis power elites maintained their influence and privileges in the post-crisis governance landscape? To understand their continuing relevance, it is useful to consider the mechanisms through which these global agents attain and preserve authority. A close examination of the actions and interactions of the transnational financial policy community, actors traditionally understood as elites, shows that they organize themselves in a club-like manner. The “club” serves as the mechanism through which self-selected, elite members of the community gain influence and replicate their power. This short article proposes club governance as a key concept in transnational interactions and governance. It argues that a sociological understanding of elites operating through a club model provides the detail about actor motivations, engagement and conflicts that is missing from approaches that privilege scientific knowledge or material interest. The club model does not merely describe but sheds light on the role of interactions of individuals beyond and across institutional forms, instead of relying on the assumed interests of the former, or the organizational characteristics of the latter. Ultimately, it helps explain why the transnational financial policy community appears unchanged following the crisis. In the transnational space occupied by the agents of global finance—the community of central bankers, regulators, managers of large financial conglomerates and selected academics—club mechanisms demarcate an arena which is highly protected from …