In Search of Sovereign Ontologies: State Agency and the Marketization of Sovereign Debts

• In Event: 282 - Regular Session. Economic Sociology. Financial Globalization

Abstract

Analyses of sovereign debts have predominantly focused on the size of debts and deficits and on their fiscal implications. Left out of discussion are the methods countries use to manage their debts and the political consequences of these methods. This paper outlines a historical transition in the methods that France and Israel employ in managing their sovereign debts. With a difference of some 20 years between them (France in the 1970s; Israel in the 1990s), these countries started financing their sovereign debts by issuing bonds priced and evaluated in financial markets, and stopped relying on the state-specific and politically-embedded arrangements they had previously used. This transition related to a greater transformation toward financialization, in which financial markets became dominant in post-industrial economies. We highlight the consequences that financialization had for the moral relationship between these countries and their citizens. Sovereign debts are social relations that have crucial political implications: they may reflect commitment and mutual obligation between peoples and states (Lainer-Voss, 2012), or bind debtors and creditors in hierarchical dynamics of power and dependence (Carruthers, 1996). We argue that financialization transformed social, political, and institutional relationships in France and Israel, by structuring sovereign debts as an interaction between states that issue bonds and institutional bodies and private organizations that buy them to financial markets. We show that what is at stake is the consolidation of state agency, states’ legitimate boundaries, perimeter of action, and their material representation as actors in the economy.

Authors

• Roi Livne, University of California-Berkeley

• Benjamin Noel Lemoine, Universite Paris - Dauphine