Erin Lockwood

Program Area(s):  International Relations; Political Theory

Dissertation Title:

The Construction of Financial Authority: Authoritative Practices in the OTC Derivatives Market before and after the Crisis

Dissertation Committee:  Ian Hurd (co-chair), Stephen C. Nelson (co-chair), Bruce Carruthers

Research Interests: international political economy; power and politics of global financial markets; derivatives regulation; risk and uncertainty; practice theory; constructivist IPE; interpretive methods

My research draws on economic sociology, finance, and international political economy, while contributing to contemporary debates on the origins of the financial crisis, the role of finance in global politics, and the power of economic ideas and values. My research challenges the dichotomy between the market as a would-be autonomous sphere, on the one hand, and external, political rules and standards, on the other.

Dissertation Description:

My dissertation examines how the 2008 financial crisis altered the practices that the over-the-counter (OTC) derivatives market uses to operate and preserve its unparalleled power and autonomy in the global financial system. Prior to the crisis, OTC derivatives were both immune from public regulation and seen as beneficial to the global economy. While we might expect the crisis to have changed regulators’ perceptions of derivatives, it is unclear to what extent this is the case. Even as regulation has shifted from private to public agencies, trading volumes remain high and many of the same actors are involved in setting regulatory standards.

Recognizing the limitations of approaches that regards markets as theoretically separable from politics, my research uses an interpretive framework and takes as its object of inquiry the practices, such as risk modeling and collateralization, through which the authority of financial actors is constituted, reproduced, contested, and changed. Focusing on these practices, as well as the narratives that legitimized derivatives, allows me to capture continuities in market governance that are obscured by a framework of regulatory capture. To identify these practices, I draw on an extensive archive of regulatory and industry documents.

My research draws on economic sociology, finance, and international political economy, while contributing to contemporary debates on the origins of the financial crisis, the role of finance in global politics, and the power of economic ideas and values. My research challenges the dichotomy between the market as a would-be autonomous sphere, on the one hand, and external, political rules and standards, on the other.

Publications:

  • “Beyond Conditionality: How Contracts, Credit Rating Agencies, and Credit Default Swaps Influence Borrowing States’ Sovereignty.” With Bruce Carruthers. Oxford Handbook of International Economic Governance and Market Regulation. Invited, under review.
  • “The Politics and Practices of Central Clearing in OTC Derivatives Markets.” In Governing the World’s Biggest Market: The Politics of Derivatives Regulation After the 2008 Crisis. Eds. Eric Helleiner, Stefano Pagliari, and Irene Spagna. Oxford University Press. Under review.
  • “The Global Politics of Central Banking: A View from Political Science.” Marco Einaudi Center for International Studies Working Paper Series, No. 5-16. July 2016.
  • “Predicting the Unpredictable: Value-at-Risk, Performativity, and the Politics of Financial Uncertainty.” Review of International Political Economy 22(4) 2015: 719-756.

Awards:

  • Graduate Student Collaborative Research Fellowship in Global Finance, Cornell University Global Finance Initiative and Meridian 180 (2015-2016)
  • University Fellowship, Northwestern University (2011-2012; 2015-2016)
  • Minar Memorial Summer Research Award, Northwestern University Department of Political Science (2015)
  • Graduate Student Teaching Award, Northwestern University Department of Political Science (2014)
  • Conference Travel Award, Buffett Institute for Comparative and International Studies (2013; 2014; 2015)
  • Conference Travel Award, Northwestern University Graduate School (2015)
  • Conference Travel Award, Northwestern University Department of Political Science (2013; 2014; 2015)