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Competing Institutional Perspectives in the Life of Glass–Steagall

  • Philip A. Wallach (a1)

A growing body of scholarship explores processes of gradual but transformative institutional change, classifying patterns of change into several categories. I argue that policymakers themselves actively contest the appropriate institutional frames for understanding changes as they seek to guide institutional change, and show that judicial determinations of statutory meaning are sensitive to judgments about which institutional perspective is most compelling. A process-tracing examination of institutional changes in the Glass–Steagall Act over the law's whole life span, from 1933 to 1999, provides a concrete example of how the dynamics of contestation can play out. Those who conceived of Glass–Steagall as the institutional embodiment of the separation between commercial and investment banking argued that expansion of commercial bank powers represented institutional drift. Alternatively, those who came to see Glass–Steagall as just one set of statutory imperatives to be handled within the larger institutional context of American banking law, including banking regulators, interpreted regulatory changes as constructive acts of conversion adapting to novel economic challenges. I document the slow process through which courts came to accept the second framing while noting how the fixity of statutory text nevertheless continued to limit available adaptations.

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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Sandra Suárez and Robin Kolodny , “Paving the Road to ‘Too Big to Fail’: Business Interests and the Politics of Financial Deregulation in the United States,” Politics and Society 39 (2011): 74102.

George Stigler , “The Theory of Economic Regulation,” Bell Journal of Economics and Management Science 2 (1971): 321

Sam Peltzman , “Toward a More General Theory of Regulation,” Journal of Law & Economics 19 (1976): 211240.

Stephen Skowronek , Building a New American State: The Expansion of National Administrative Capacities, 1877–1920 (New York: Cambridge University Press, 1982)

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Studies in American Political Development
  • ISSN: 0898-588X
  • EISSN: 1469-8692
  • URL: /core/journals/studies-in-american-political-development
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