Performation Struggles in the Making of the Hungarian Forex Mortgage Market

• In Event: 571 - Section on Economic Sociology Roundtables (one-hour)
  In Refereed Roundtable: Table 12. Social Studies of Finance

Abstract

Foreign-currency denominated mortgages, payable in local currency, blew up the Hungarian economy in 2009 and resulted in ongoing debt crisis. The now-established theory of performativity typically asks how an economic theory succeeds in creating its world, often a newly designed market. Reversing the question we ask how a market outcome—the rise of forex mortgages—might be linked to theories, without a ‘winner.’ To what extent did the diverse theories held by policy-makers, regulators and bankers shape the market to confirm these very theories? We present preliminary results from our ongoing larger project on the creation and transformations of the Hungarian mortgage market, using policy archives and interviews with regulators, bank executives and borrowers. We argue that most markets are outcomes of performation struggles (Callon)—multiple theories vying to become performative. We identify groups by their social-technical assemblages—their market theories, technical proposals and capabilities—noting that some theories are non-economic, and that groups theorize about each other’s role (‘banks’/’market’, ‘households’/’families’, ‘regulators’/’the state’). Theories get the chance to become performative when they (1) are promoted by actors with institutional or symbolic power to enroll others into their program; (2) require socio-technical assemblages compatible with existing ones; (3) allow for polysemic assemblages to accommodate multiple agendas. The observed market results from “fragmented performativity”: theories get incorporated then abandoned, and intersect with each other, leaving partially realized assemblages—laws, financial institutions, subsidies, borrowers—in place. We can thus see the development and collapse of this market partly as a performation struggle.

Authors

• Lena Pellandini-Simanyi, ELTE

• Zsuzsanna Vargha, University of Leicester

• Ferenc Hammer, Eötvös Loránd University