IDEAS home Printed from https://ideas.repec.org/p/rru/oapubs/10197-9205.html
   My bibliography  Save this paper

How do ideas shape national preferences? The Financial Transaction Tax in Ireland

Author

Listed:
  • Niamh Hardiman
  • Saliha Metinsoy

Abstract

European countries have been required to formulate a national preference in relation to the EU Financial Transaction Tax. The two leading approaches to explaining how the financial sector makes its views felt in the political process – the structural power of the financial services sector based on potential disinvestment, and its instrumental power arising from direct political lobbying – fall short of providing a comprehensive account. The missing link is how and why policy-makers might be willing to adopt the priorities of key sectors of the financial services industry. We outline how two levels of ideational power might be at work in shaping outcomes, using Ireland as a case study. We argue firstly that background systems of shared knowledge that are institutionalized in policy networks generated broad ideational convergence between the financial sector and policymakers over the priorities of industrial policy in general. Secondly, and against that backdrop, debate over specific policy choices can leave room for a wider range of disagreement and indeed political and ideational contestation. Irish policymakers proved responsive to industry interests in the case of the FTT, but not for the reasons normally given. This work seeks to link literatures in two fields of inquiry. It poses questions for liberal intergovernmentalism in suggesting that the translation of structurally grounded material interests into national policy preferences is far from automatic, and argues that this is mediated by ideational considerations that are often under-estimated. It also contributes to our understanding of how constructivist explanations of policy outcomes work in practice, through a detailed case study of how material and ideational interests interact.

Suggested Citation

  • Niamh Hardiman & Saliha Metinsoy, 2017. "How do ideas shape national preferences? The Financial Transaction Tax in Ireland," Open Access publications 10197/9205, Research Repository, University College Dublin.
    • Handle: RePEc:rru:oapubs:10197/9205
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10197/9205
    File Function: First version, 2017
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eleni Tsingou, 2015. "Club governance and the making of global financial rules," Review of International Political Economy, Taylor & Francis Journals, vol. 22(2), pages 225-256, April.
    2. Dan Breznitz, 2012. "Ideas, structure, state action and economic growth: Rethinking the Irish miracle," Review of International Political Economy, Taylor & Francis Journals, vol. 19(1), pages 87-113.
    3. repec:hal:spmain:info:hdl:2441/5adcidkke9omt0s9p8s03ic8p is not listed on IDEAS
    4. Cornelia Woll, 2014. "Bank Rescue Schemes in Continental Europe: The Power of Collective Inaction," Post-Print hal-01045238, HAL.
    5. Jim Stewart & Cillian Doyle, 2017. "The measurement and regulation of shadow banking in Ireland," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 25(4), pages 396-412, November.
    6. Culpepper, Pepper D., 2008. "The Politics of Common Knowledge: Ideas and Institutional Change in Wage Bargaining," International Organization, Cambridge University Press, vol. 62(1), pages 1-33, January.
    7. repec:hal:spmain:info:hdl:2441/6h0jh7hlm792bbqq8fd5691vfi is not listed on IDEAS
    8. Dorothea Schäfer, 2012. "Financial Transaction Tax Contributes to More Sustainability in Financial Markets," Discussion Papers of DIW Berlin 1198, DIW Berlin, German Institute for Economic Research.
    9. Emiliano Grossman & Cornelia Woll, 2014. "Saving the Banks: The Political Economy of Bailouts," Post-Print hal-02186491, HAL.
    10. Aidan Regan & Samuel Brazys, 2017. "Celtic phoenix or leprechaun economics? The politics of an FDI led growth model in Europe," Working Papers 201701, Geary Institute, University College Dublin.
    11. Culpepper Pepper D., 2015. "Structural power and political science in the post-crisis era," Business and Politics, De Gruyter, vol. 17(3), pages 391-409, October.
    12. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, vol. 42(3), pages 427-460, July.
    13. Pepper D. Culpepper & Raphael Reinke, 2014. "Structural Power and Bank Bailouts in the United Kingdom and the United States," Politics & Society, , vol. 42(4), pages 427-454, December.
    14. Manolis Kalaitzake, 2017. "Death by a Thousand Cuts? Financial Political Power and the Case of the European Financial Transaction Tax," New Political Economy, Taylor & Francis Journals, vol. 22(6), pages 709-726, November.
    15. Michelle Norris & Michael Byrne, 2017. "Housing Market Volatility,Stability and Social Rented Housing: comparing Austria and Ireland during the global financial crisis," Working Papers 201705, Geary Institute, University College Dublin.
    16. Samuel Brazys & Niamh Hardiman, 2013. "From Tiger to PIIGS: Ireland and the use of heuristics in comparative political economy," Working Papers 201316, Geary Institute, University College Dublin.
    17. Epstein, Rachel A, 2017. "Banking on Markets: The Transformation of Bank-State Ties in Europe and Beyond," OUP Catalogue, Oxford University Press, number 9780198809968.
    18. Cornel Ban & Leonard Seabrooke & Sarah Freitas, 2016. "Grey matter in shadow banking: international organizations and expert strategies in global financial governance," Review of International Political Economy, Taylor & Francis Journals, vol. 23(6), pages 1001-1033, November.
    19. Colin Hay, 2016. "Good in a crisis: the ontological institutionalism of social constructivism," New Political Economy, Taylor & Francis Journals, vol. 21(6), pages 520-535, November.
    20. Przeworski, Adam & Wallerstein, Michael, 1988. "Structural Dependence of the State on Capital," American Political Science Review, Cambridge University Press, vol. 82(1), pages 11-29, March.
    21. Culpepper, Pepper D., 2015. "Structural power and political science in the post-crisis era," Business and Politics, Cambridge University Press, vol. 17(3), pages 391-409, October.
    22. Gerring, John, 2004. "What Is a Case Study and What Is It Good for?," American Political Science Review, Cambridge University Press, vol. 98(2), pages 341-354, May.
    23. Cornel Ban & Daniela Gabor, 2016. "The political economy of shadow banking," Review of International Political Economy, Taylor & Francis Journals, vol. 23(6), pages 901-914, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simon Schairer, 2024. "The contradictions of unconventional monetary policy as a post-2008 thwarting mechanism: financial dominance, shadow banking, and inequality," Review of Evolutionary Political Economy, Springer, vol. 5(1), pages 1-29, June.
    2. Kevin L Young & Timothy Marple & James Heilman & Bruce A Desmarais, 2023. "A double-edged sword: The conditional properties of elite network ties in the financial sector," Environment and Planning A, , vol. 55(4), pages 997-1019, June.
    3. Cooiman, Franziska, 2022. "Imprinting the economy: The structural power of venture capital," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue OnlineFir, pages 1-1.
    4. Scott James & Lucia Quaglia, 2023. "Epistemic contestation and interagency conflict: The challenge of regulating investment funds," Regulation & Governance, John Wiley & Sons, vol. 17(2), pages 346-362, April.
    5. Franziska Cooiman, 2024. "Imprinting the economy: The structural power of venture capital," Environment and Planning A, , vol. 56(2), pages 586-602, March.
    6. Pritish Behuria, 2019. "The comparative political economy of plastic bag bans in East Africa: why implementation has varied in Rwanda, Kenya and Uganda," Global Development Institute Working Paper Series 372019, GDI, The University of Manchester.
    7. Lucia Quaglia & Aneta Spendzharova, 2017. "Post‐crisis reforms in banking: Regulators at the interface between domestic and international governance," Regulation & Governance, John Wiley & Sons, vol. 11(4), pages 422-437, December.
    8. Braun, Benjamin, 2021. "From exit to control: The structural power of finance under asset manager capitalism," SocArXiv 4uesc, Center for Open Science.
    9. Armin Mertens & Christine Trampusch & Florian Fastenrath & Rebecca Wangemann, 2021. "The political economy of local government financialization and the role of policy diffusion," Regulation & Governance, John Wiley & Sons, vol. 15(2), pages 370-387, April.
    10. George Marian Ștefan & Vlad Nerău & Daniela Livia Traşcă & Daniela Nicoleta Sahlian & Liviu Matac, 2019. "“Social Trilemma”: Empirical Evidence from Central and Eastern Europe," Sustainability, MDPI, vol. 11(17), pages 1-15, August.
    11. Massoc, Elsa, 2020. "Having "Banks Play Along": Varieties of State-Bank Coordination and State-Guaranteed Credit Programs During the Covid-19 Crisis," LawFin Working Paper Series 5, Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin).
    12. Luca Menicacci & Lorenzo Simoni, 2024. "Negative media coverage of ESG issues and corporate tax avoidance," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 15(7), pages 1-33, February.
    13. Michel Goyer & Miguel Glatzer & Rocio Valdivielso del Real, 2022. "The management of the Eurozone in crisis times: Actors, institutions and the case of bailout packages," European Journal of Industrial Relations, , vol. 28(1), pages 7-25, March.
    14. Duvanova Dinissa & Sokhey Sarah Wilson, 2016. "Choosing which firms to help in crisis: evidence from the emerging European economies," Business and Politics, De Gruyter, vol. 18(3), pages 225-262, October.
    15. Athanasios Kolliopoulos, 2020. "The Determinants of Bank Bailouts in Greece: testing the extreme limits of the ÒVarieties of Financial CapitalismÓ framework," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 148, Hellenic Observatory, LSE.
    16. Friel, Sharon & Townsend, Belinda & Fisher, Matthew & Harris, Patrick & Freeman, Toby & Baum, Fran, 2021. "Power and the people's health," Social Science & Medicine, Elsevier, vol. 282(C).
    17. Naqvi, Natalya, 2019. "Renationalizing finance for development: policy space and public economic control in Bolivia," LSE Research Online Documents on Economics 104232, London School of Economics and Political Science, LSE Library.
    18. Downie, Christian, 2017. "Business actors, political resistance, and strategies for policymakers," Energy Policy, Elsevier, vol. 108(C), pages 583-592.
    19. Stefano Pagliari & Meredith Wilf, 2021. "Regulatory novelty after financial crises: Evidence from international banking and securities standards, 1975–2016," Regulation & Governance, John Wiley & Sons, vol. 15(3), pages 933-951, July.
    20. Cornel Ban & Dorothee Bohle & Marek Naczyk, 2022. "A perfect storm: COVID-19 and the reorganisation of the German meat industry," Transfer: European Review of Labour and Research, , vol. 28(1), pages 101-118, February.

    More about this item

    Keywords

    Economic integration; Multinational firms; International business; Globalization; Business taxes and subsidies; Intergovernmental relations;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rru:oapubs:10197/9205. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joseph Greene (email available below). General contact details of provider: http://researchrepository.ucd.ie .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.