Abstract
AbstractThe Institute of International Finance (IIF) is a key actor in global finance, mixing private-interest representation and market governance roles. Analyzing the historical development of the IIF offers important insights into the interaction between state and business and the resulting patterns of public and private governance. Based on archive sources and a unique set of interviews with elite policymakers spanning three decades, I argue that market structures, interest groups, and public policymaking processes stand in a recursive relationship. Secondly, I argue that interest groups take on private governance roles with the aim to remain the focal point of public policymakers vis-à-vis competing interest groups. This has important implications for the study of interest groups and global financial governance. The analysis of interest groups should be extended to the way they shape markets through private governance mechanisms and how that recursively feeds back into interest group advocacy and public policymaking processes to fully grasp lobbying dynamics. The study of global governance should include analysis of interest group competition within the opportunities and constraints emanating from public policymaking processes so as to understand the emergence of private patterns of governance and their interaction with public governance mechanisms.
Highlights
The Institute of International Finance (IIF) is a key actor in global finance, mixing private-interest representation and market governance roles
Based on archive sources and a unique set of interviews with elite policymakers spanning three decades, I argue that market structures, interest groups, and public policymaking processes stand in a recursive relationship
This paper aimed to understand the role of the Institute of International Finance in global policymaking processes and governance through a study of its historical development and involvement in the governance of sovereign debt crisis resolution
Summary
I argue that interest groups take on these private governance roles with the aim to remain the preferred interlocutor of public policymakers vis-à-vis competing interest groups In doing so, they no longer solely represent their members or respond to functional demands resulting from market developments but pursue organizational self-interest and actively shape the market structure. The IIF took on this private governance role with the aim to remain the focal point in the area of sovereign debt crisis resolution, where rival capital market associations played an increasing role This strategy paid off when the IIF was given the central role in the Greek debt restructuring of 2011/12, allowing it to shape the restructuring package and thereby the risk profile of peripheral Eurozone countries’ debt. Under-researched, the role of interest groups in shaping markets warrants further examination
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