Inequality, Institutions, and the Making of Financial Policy: A Collaborative Project on Rulemaking in the Aftermath of Dodd-Frank

Awarded Scholars:
Daniel Carpenter, Harvard University
Susan Yackee, University of Wisconsin, Madison
Project Date:
Dec 2017
Award Amount:

Recent research has documented the disproportionate influence of affluent citizens on policymaking, especially the congressional legislative process. However, most studies have not examined specific policy mechanisms of unequal influence. In addition, much policymaking occurs within federal agencies, as Congress passes laws but relies on federal agencies to write the rules and interpret them. As part of this rulemaking process, agencies must solicit public comments on draft regulations and consider comments before issuing legally-binding rules.

Daniel Carpenter and Susan Yackee will examine the ways that special interests use their considerable resources to influence administrative and executive decisionmaking. They will examine rulemaking regarding the Dodd-Frank legislation passed by Congress in 2010. They argue that while financial policymaking is an unparalleled site of interaction between economic inequality and unequal democracy, the ability of researchers to measure financial industry influence on agency rulemaking by political lobbying has been limited. Their study will address three issues: First, can the influence of financial institutions and other industry commenters on financial rules be measured systematically? Second, how unified are the lobbying messages sent by large financial institutions to agency regulators during rulemaking, and is lobbying unity associated with regulatory policy changes? Third, do these financial institutions derive financial benefits from the rulemaking process?


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