Structural Power and Bank Bailouts in the United Kingdom and the United States

By Pepper D. Culpepper, Raphael Reinke. 2014

252 citations recorded by the source corpus.

The 2008 bailout is often taken as evidence of the domination of the US political system by large financial institutions. In fact, the bailout demonstrated the vulnerability of US banks to government pressure. Large banks in the United States could not defy regulators, because their future income depended on the US market. In Britain, by contrast, one bank succeeded in scuttling the preferred governmental solution of an industry-wide recapitalization, because most of its revenue came from outside the United Kingdom. This was an exercise of structural power, but one that most contemporary scholarship on business power ignores or misclassifies, since it limits structural power to the automatic adjustment of policy to the possibility of disinvestment. We show that structural power can be exercised strategically, that it is distinct from instrumental power based on lobbying, and that it explains consequential variations in bailout design in the United Kingdom, the United States, France, and Germany.

View Paper: https://www.semanticscholar.org/paper/1482c45faa6395ad1466c4da57a9251b0f31eae7

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

1. Benjamin Braun
2. Daniela Gabor
3. M. Hübner
4. Laura Bear
5. Jens van ’t Klooster

Citations in the corpus

• Central banking and the infrastructural power of finance: the case of ECB support for repo and securitization markets (2020, background): “The political economy literature emphasizes two forms of political power wielded by the financial sector: instrumental power, exercised through lobbying, and structural power, which derives from the financial sector’s privileged position in financialized economies (Culpepper and Reinke, 2014; Woll, ”
• Governing through financial markets: Towards a critical political economy of Capital Markets Union (2018, background): “…ideas (Baker, 2013; Braun, 2014; Engelen et al., 2011; Lockwood, 2015; Widmaier, 2016), as well as the financial sector’s instrumental, structural and infrastructural power in the political process (Braun, 2018; Culpepper and Reinke, 2014; Gabor, 2016b; Pagliari and Young, 2016; Woll, 2016).”