Our panel on financialization and inequality at the Harvard Law School conference on money as a democratic medium can now be viewed on YouTube or below. Hear Gerald Epstein, Rana Foroohar, Rebecca Spang and yours truly speak on this important topic, under the inspired chairpersonship of Sandy Brian Hager.
For a recap of the conference and all other video presentations, follow this link.
On January 25, Tobias Wiß (Johannes Kepler University Linz) and I will be presenting our paper “Pension Funds and Sustainable Investment: Comparing Regulation in Denmark, Germany and the Netherlands” (with Karen Anderson, University College Dublin) during the Netspar International Pension Workshop in Leiden.
Our paper reports the first findings of a Netspar-funded research project on the regulation of sustainable investment by funded pension schemes. In this study, we use insights from comparative political economy and financialization studies to direct attention to the institutional underpinnings of pension schemes’ investment behaviour. The starting point of the paper is the assumption that regulation either incentivizes or discourages sustainable by pension funds. We furthermore assume that the type of regulation present in a pension system is influenced by institutional characteristics, such as the history of the pension system, the capitalization of the second pillar, the vehicles for pension provision, and the mode of governance. The paper employs a broad conceptualization of regulation, incorporating 1) national legislation, 2) regulatory activities by supervisory agencies and 3) self-regulation by the pension sector itself.
In all three countries, there is a growing sense that sustainability is related to (positive) return and that pension schemes, as other groups of politics, the society and the economy, need to take on responsibility for future sustainability, especially in times of climate change. Nonetheless, we do find substantial differences with regard to the regulation of sustainable investment by pension funds: highly developed in the Netherlands, moderately developed in Denmark and underdeveloped in Germany. In none of the cases, legal requirements for sustainable investment exist. Pension investments in all three cases are guided by the prudent person rule, although other rules may exist (e.g. ban on cluster munition in the Netherlands, quantitative restrictions in Germany). The Netherlands stands out as the only case, where 1) the industry has initiated self-regulation on sustainable investment and 2) where the regulator is developing a more all-encompassing attitude towards financial risk, that for instance also includes climate risk. Finally, we find that fund-level activities toward ESG investments are considerable in the Netherlands and Denmark and rather moderate in Germany.
In the coming months, we’ll be revising our paper before it will be published as a Netspar working paper. Keep on an eye on this website or our project page on ResearchGate for any updates.
Photo credit: Klearchos Kapoutsis
Together with Daniel Mertens, I am co-organizing one of the panels at the 2019 ECPR General Conference in Section 11: Changing Political Economies and Welfare States. Our panel aims to analyze comparatively how the welfare state and the financial system are mutually intertwined, adopting a broader conception of finance which includes not just financial actors and their interest organizations, but also financial ideas and narratives.
From the CFP: “Scholars of the welfare state have shown how traditional welfare arrangements are challenged by new kinds of risks that have emerged in the late twentieth century. Among these risks is the process of financialization. It refers to the growing influence of financial markets and financial actors over the productive economy and over society at large, affecting the welfare state in several ways. For instance, welfare provisions may rely on financial market investment for funding while financial arrangements have also been touted as alternative sources of welfare (e.g. through asset-based welfare) and governments have developed new financial activities in order to maintain current welfare provisions. Furthermore, several indirect effects of financialization affect the sustainability of mature welfare states, such as growing indebtedness and social-economic inequalities.
Against this background, the panel has two aims: First, it hopes to reintegrate scholarship on welfare and finance to come to a better understanding of how the welfare state and the financial system are mutually intertwined, both historically and comparatively. Furthermore, we hope to approach the panel theme using a broader conception of finance: to include not just financial actors and their interest organizations, but also financial ideas and narratives, norms and practices that interact at different scales of the modern polity.”
Check out the CFP here!
This Thursday, I will be presenting new research in the seminar series of the Netherlands Institute of Advanced Studies.
My paper presents a historical case study of the investment politics of Dutch pension fund for public employees, ABP (Algemeen Burgerlijk Pensioenfonds). Combining both quantitative and qualitative analysis, the research maps the financial flows between ABP and the broader political economy before and after WW2, while at the same time shedding light on the political considerations that informed the fund’s investment policies. I show how over time ABP’s investment politics became increasingly caught between the political interests of the state on the one hand and the dictates of dominant financial theories on the other hand.
The history of the ABP is indicative of the centrality of pension funds to the Dutch political economy. Contrary to traditional bank-based or stock-market based systems, the presence of these large funds have allowed the Netherlands to combine a generous welfare state with high financial development. Still, as the case study shows, the ongoing financialization of the welfare state has coincided with a depoliticization of pension investment. The result is a loss of public control over the flows of capital that emanate from the Dutch pension funds on the one hand and growing instability within the private pension system on the other hand.
This is unpublished work. Please e-mail, if interested in the paper.
Source: H.W. Groeneveld, “De kosten onzer sociale verzekering,” De Werkgever, February 1925, p.37.
I have written a review of Joseph Vogl’s book The Ascendancy of Finance (Polity, 2017). Read it here or below:
I am very excited to be part of this great panel on financialization and inequality at the “Money as a Democratic Medium” conference at Harvard Law School in December. Come check out this fantastic conference, if you’re in the Boston area!
Today I am celebrating that my article “Making Sense of Financialization” reached 500 citations on Google Scholar. It’s exhilarating and deeply flattering to see this appreciation for what originated as Chapter 2 from my dissertation. Many thanks for all the support that I have received over the past few years!