Some States Stepping In: Politics and Discourse in Foreclosure Prevention Legislation Outcomes During the Financial Crisis

Abstract

ABSTRACT At the core of the 2008 global financial crisis was a foreclosure crisis in the United States. The federal government focused on responding to the concurrent banking crisis, leaving foreclosure prevention to the states. Despite a nationwide crisis, only some states advanced foreclosure prevention policies. Political theory scholars argue that political ideology and economic interests are the primary drivers of policy outcomes, while discourse scholars argue that themes in the public discourse shape policymaking. In this article, I integrate these literatures to develop and test an account of foreclosure prevention policymaking. To measure discourse, I scrape the text of over 20,000 state-level media publications and inductively code them using Structural Topic Modeling. Using event history analysis, I examine the relationship between discourse themes, political factors, and the timing of foreclosure prevention policymaking by state legislatures. I find that states where a “markets” theme was more prevalent in the foreclosure discourse were less likely to advance foreclosure prevention policies, whereas states with discourse focused on “intervention” were more likely to do so. Results also corroborate previous scholarship showing that political ideology and special interest group activity impacted these policy outcomes.