Reference : When does finance win? A set-theoretic analysis of the conditions of European financi...
Dissertations and theses : Doctoral thesis
Law, criminology & political science : Political science, public administration & international relations
When does finance win? A set-theoretic analysis of the conditions of European financial interest groups' lobbying success on post-crisis bank capital requirements
Commain, Sébastien Romain Jean-Louis mailto [University of Luxembourg > Faculty of Humanities, Education and Social Sciences (FHSE) > >]
University of Luxembourg, ​​Luxembourg
Docteur de l'Université du Luxembourg en Sciences Politiques
xxi, 298 + 123
Howarth, David mailto
Högenauer, Anna-Lena mailto
Pagliari, Stefano mailto
Bernhagen, Patrick mailto
James, Scott mailto
[en] Lobbying ; Influence ; Interest groups ; Banking ; Capital requirements ; Basel III ; QCA ; Quantitative Text Analysis ; Basel Committee
[en] Acknowledging the failure of the existing regulatory framework after the global financial crisis of 2008, world leaders vowed to reform financial regulation to strengthen stability and restore trust. The reform of bank capital requirements was a major item on this agenda: the Group of Twenty (G20) entrusted the reform to the Basel Committee on Bank Supervision (BCBS), whose so-called "Basel framework" constitutes the global standard for the prudential regulation of banking activities. While scholars have highlighted the important concessions that were made to financial interests in this reform, a series of demanding new policy tools—which were strongly opposed by financial industry representatives—were also introduced into the new Basel III framework.
This dissertation explores this empirical puzzle and seeks to identify under what conditions European financial interests’ lobbying on the reform of capital requirements was successful, and whether these successes constitute cases of interest group influence.

Defining influence as a situation where a proposed reform evolves during the decision-making process (policy shift) in the direction advocated by an actor (lobbying success) and where that evolution is caused by the actors’ lobbying activity vis-à-vis the proposed reform (causal path), this dissertation then considers influence as a multilevel concept, which can be considered present if and only if all three of its components—policy shift, lobbying success and a causal path—are also present. In other words, policy shift, lobbying success and causal paths are the three individually necessary and jointly sufficient conditions for influence, which this study investigates in turn in the case of post-crisis bank capital requirements. The presence or absence of a policy shift is assessed qualitatively by comparing, for twenty-nine policy issues contained in the Basel III framework, the initial BCBS reform proposals with the rules finally enacted at international and European level. The positions of financial and non-financial interest groups on each of these twenty-nine issues are then determined—through a quantitative text analysis of the position papers submitted by interest groups to BCBS and European Commission consultations on Basel III and the CRD and CRR—to determine whether the identified policy shift on a given issue constitutes a case of lobbying success for the interest group. Finally, using fuzzy-set Qualitative Comparative Analysis (fsQCA) to compare in a systematic manner cases in which success is observed and cases where it is absent, I uncover the configurations of conditions sufficient to produce successful lobbying and those sufficient to produce the absence of success, configurations which I then interpret in terms of causal mechanisms. Strong collective action is found, in several forms, to form the basis of causal mechanisms producing successful lobbying. The observed sufficient configurations of conditions however suggest that the causal mechanisms producing success also include key contextual factors that are beyong the control of financial interest groups.
The absence of these enabling contextual factors is shown, conversely, to lead to the absence of success.

This dissertation contributes to the existing academic literature in several ways. Empirically, first, it adds to the scholarship on bank capital requirements at the international and European level, using novel data to reassess, after the completion of the Basel III reform, the extent to which the final framework meets the initial ambitions. Methodologically, second, this dissertation employs a range of new methods and techniques to take on the challenges of measuring lobbying success and identifying multiple pathways to influence, two fundamental issues for empirical studies of interest group influence. Theoretically, third, the combinatorial approach used here to explore conditions of lobbying success permits an examination of multiple conjunctural causation patterns in interest group influence.
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