Expert Ideas and Technological Practices as Financial Market Regulators: The Ideological and Performative Reproduction of Regulatory Neoliberalism

This thesis examines one key research question: how has the ideational infrastructure of global financial markets impacted on the regulatory reforms within the transnational and Third World financial regulatory orders? It explores the ideological and performative role of ideas and their related technologies and practices in the reproduction of financial capitalism and regulatory neoliberalism in the globalized financial markets and related transnational and national regulatory institutions, specifically in Third World countries. The regulation of the liberalized interest rates in Kenya's credit market forms the basis of a three-part case study on reproduction of regulatory neoliberalism in Third World countries. The study is premised on the observation that the Third World's historical contestation of the transnational financial regulatory order has registered both progress and challenges, but regulatory neoliberalism and the globalization of financial capitalism grows more resilient, despite periodic setbacks.

While noting the significance of structural power, stakeholder interests, and material embedding, in the reproduction of regulatory neoliberalism, this thesis identifies and focuses on specific ideas and related technologies and practices as making an under-stated contribution. It therefore explores the ideological and performative power of neoclassical economic theories, doctrines of legal formalism, technological ideas, artefacts, and their related practices, which form the ideational infrastructure of contemporary financial markets. The thesis examines their role in constructing meaning, relationships and institutions, allocating identities, interests and capacities, defining problems and their solutions, thereby enabling and constraining action.

The main argument explored in this study is that the ideational infrastructure of the financial markets legitimates, constitutes and performs neoliberal financial markets and regulatory neoliberalism, within the transnational and national financial regulatory institutions. By presenting neoliberal financial markets, and regulatory neoliberalism as the only rational form of economic organization, this ideational infrastructure conceals their reproduction of inequality and power asymmetries between developed and developing countries in transnational regulation, and also between lenders and borrowers in Kenya's credit markets. It also restricts the regulatory possibilities available to Third World policy makers and regulators for addressing the externalities of neoliberal financial markets, including, as explored in the Kenya case studies, high interest rates and high indebtedness.

The related key findings of the thesis are four-pronged. The first finding is the transformation of neoliberal hegemony in global financial markets from the centralized structural, military and economic power of the US and other developed countries, to a more decentralized, diffused hegemony embedded in ideologies, discourses, performative practices, and technologies. This is evident in the transformation of liberal hegemony in response to Third World contestation. The second finding is the 'relatively autonomous' agential power of legal, economic and technological ideas and practices underpinning regulatory neoliberalism, when decoupled from their originators. This is demonstrated by the origination and diffusion of ideas to and from the Bretton Woods institutions, and also their embedding within the bureaucracies of Kenya financial markets regulators.

The third insight is the complex, co-constitutive, but not necessarily causal, relationships between legal formalism, neoclassical economic theories, technological ideas, and their related practices, which contribute to the resilience and durability of transnational regulatory neoliberalism. The thesis demonstrates the embodiment of these ideas and practices in the credit information sharing infrastructure, and their simultaneous constitution of neoliberal interest rates markets in Kenya. The fourth insight is the conceptual indeterminacy, inconsistency, and contradiction at the heart of the legal, economic and technological ideologies, and possibilities of harnessing their ideological and performative power towards establishing alternative economic organizations. The three Kenya case studies demonstrates the failure of the legal, economic and technological ideologies and practices employed by Kenyan financial regulators in the interest rates market.

The thesis concludes that the present Third World efforts aimed at contesting the regulatory neoliberalism at the heart of the transnational financial regulatory order should also focus on the ideological and performative power of the ideational infrastructure of the global financial markets. In doing so, TWAIL practitioners should of necessity adopt an interdisciplinary approach in their reflection, conceptualization, articulation, dissemination and legal operationalization of an alternative international financial law praxis.