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The Ideational Shaping of State Power and Capacity: Winning Battles but Losing the War over Bank Reform in the US and UK

Published online by Cambridge University Press:  22 May 2014

Stephen Bell  and
Andrew Hindmoor
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Abstract

This article extends a recent line of research arguing that the power and capacity of political actors (including states) is not just the product of particular fixed attributes but is also the outcome of political relations between key interlocutors, including ideational relations. State elites, especially government leaders, have persisted with a mindset that still values the economic centrality of a large and complex banking sector. This way of thinking has conditioned the relationship between, on the one hand, the US and UK governments and, on the other, Wall Street and the City of London and has led to a form of ‘dysfunctional embeddedness’. Government leaders may have been able to win high-profile policy victories over the banking sector in the post-crisis period, but in accepting a large, complex and constantly evolving financial system with high levels of systemic risk, they have unwittingly placed themselves at a continuing disadvantage in the regulatory arena.

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Articles
Information
Government and Opposition , Volume 49 , Issue 3: The Power of Finance: Before and After the Great Financial Crash , July 2014 , pp. 342 - 368
Copyright
Copyright © Government and Opposition Ltd 2014 

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Footnotes

*

Stephen Bell is Professor of Political Science at the University of Queensland. Contact email: [email protected].

Andrew Hindmoor is Professor in Politics at the University of Sheffield. Contact email: [email protected].

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