Tuesday, October 28, 2014
McKinney Conference Room
Giulia Mennilo, Institute of Economics, University of St. Gallen, and Visiting Research Fellow, Watson Institute for International Studies
The politics of financial markets culminates in the assessment of the creditworthiness of sovereign states ─ with striking societal implications. This paper examines the structural power exerted through the practice of sovereign ratings in the discursive construction of the solvency of states. I argue that sovereign ratings, understood as an intersubjective practice of power, shape shared understandings, norms and beliefs about the constitutive parts of a state's creditworthiness. Indirectly prescribing the rules of the game, the practice incorporates the potential to shape the economic policy agenda and to ascribe to states which role to play in the economy.
Driven by the problematization of public finances and debt, sovereign rating events could stylize restrictive fiscal policies as an inevitable therapy to overcome the crisis, construct public budget consolidation as an unquestioned overarching aim, and decouple the consequences of the financial crisis from its actual origins|allowing for a redefinition of the financial crisis into a crisis of sovereign debt.
The paper is available here.