Abstract:Crises such as European debt crisis, Brexit, and COVID-19 have challenged established relations between finance and the state in attempts at mitigating a broad range of crises-related risks. We ask whether and how these altered relations in themselves constitute novel uncertainties and risks between the two fields. To better understand these dynamics, we introduce the concept of “risk entanglement” to complement financialization as a key concept presently capturing these relations. Based on qualitative researc… Show more
“…With respect to market-based public debt management and the regulation of finance, our analysis of the "regulation dilemma" shows how bankers and regulators as well as bankers and politicians become risk objects to one another, thus mutually threatening their respective objects at risk, i.e., maintaining power (politicians, regulators) and profitable payments (bankers). Therefore, financial and state actors are not only embedded in several financial, fiscal, regulatory, or political interdependencies, but are substantially related in constellations of risk entanglement (see Lange and von Scheve, 2022).…”
Relational accounts of risk explain variation in risk perception through situated cognitions defining risk as a relationship between “risk objects” and “objects at risk”. We extend this approach to include not only the relational constitution of cognitive risk objects, but also of the different actors assessing risk. Risk in this perspective is relational because it establishes a link between two different cognitive objects and between two (or more) actors. We argue that this is the case when at least two actors refer to a common risk object while retaining distinct objects at risk. We call this a constellation of risk entanglement across actors. We illustrate our theoretical arguments using data from 68 qualitative interviews and ethnographic fieldwork in the German finance-state nexus. Our analyses indicate how risk entanglement affects and transforms the fundamental logics according to which both of these fields operate.
“…With respect to market-based public debt management and the regulation of finance, our analysis of the "regulation dilemma" shows how bankers and regulators as well as bankers and politicians become risk objects to one another, thus mutually threatening their respective objects at risk, i.e., maintaining power (politicians, regulators) and profitable payments (bankers). Therefore, financial and state actors are not only embedded in several financial, fiscal, regulatory, or political interdependencies, but are substantially related in constellations of risk entanglement (see Lange and von Scheve, 2022).…”
Relational accounts of risk explain variation in risk perception through situated cognitions defining risk as a relationship between “risk objects” and “objects at risk”. We extend this approach to include not only the relational constitution of cognitive risk objects, but also of the different actors assessing risk. Risk in this perspective is relational because it establishes a link between two different cognitive objects and between two (or more) actors. We argue that this is the case when at least two actors refer to a common risk object while retaining distinct objects at risk. We call this a constellation of risk entanglement across actors. We illustrate our theoretical arguments using data from 68 qualitative interviews and ethnographic fieldwork in the German finance-state nexus. Our analyses indicate how risk entanglement affects and transforms the fundamental logics according to which both of these fields operate.
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