The remainder of the thesis consists of six chapters. Chapter 2 sets out the theoretical framework by discussing the questions of how ideas matter, which ideas matter and where ideas matter. Drawing on literature from constructivist IPE, the sociology of professions and expertise and STS, I elaborate on a transmission mechanism that builds on Hall’s concept of policy paradigms. In light of the confusion and often unspecified use of this concept, the chapter takes a step back and starts with a discussion of the philosophy of science literature. Engaging with this literature enables me to separate Hall’s paradigm concept into academic paradigms, which denote sets of ideas elaborated in scientific settings, and policy paradigms, which are about the role of these ideas in policy making. The second chapter also introduces and operationalises additional concepts that describe the transmission of economic ideas
(frames, debates, socio-technical instruments) and the social space in which it is situated (policy subsystems). Finally, I elaborate on the hypothesis that links variations in the size and maturity of policy subsystems to the relative strength of ideational transmission channels.
Chapter 3 discusses the methods and data sources that I use to conceptualise sustainable finance as an evolving policy subsystem. Before going into a detailed description of the methods, the chapter starts by discussing why the research strategy that is adopted in this thesis is well-suited to study the evolution of sustainable finance.
In addition, I further explore the empirical literature of constructivist IPE to situate my thesis in the distribution of cases and to revisit existing research strategies. An in-depth discussion of the methods follows, starting with a description of techniques from the analysis of information networks that are used to delineate the boundaries of sustainable finance. Subsequently, I introduce network measures of centrality and methods for community detection. The latter are used to identify the communities that coalesce around the different frames. To establish the meaning of the frames, I draw on content analysis, interviews and participant observation.
The fourth chapter launches the empirical analysis of the thesis. The chapter begins with some background information on sustainable finance and a brief review of empirical studies on the topic. Subsequently, I introduce the data that underlies the network analysis and partition the time interval between 1998 and 2018 into three periods, i.e. 1998-2008, 2009-2014 and 2015-2018. The chapter proceeds with a description of each period, which introduces the actors that were present in the policy subsystem. Moreover, the frames that can be observed in each period are discussed.
At the end of each section, the frames are summarised according to their diagnostic, prognostic and relational dimensions. Subsequently, network analysis is used to
visualise the relations between the actors in the policy subsystem and to cluster actors that display a shared framing.
The findings from chapter 4 suggest that the risks and opportunities frame was dominant during the entire time period, whereas the ethical SRI frame became increasingly marginalised. Towards the end of the 2000s, the climate finance frame started to emerge as an alternative but complementary understanding of sustainable finance. In the last period under study (2015-2018), the risks and opportunities frame became connected with the climate finance frame by hub-creating actors, which try to promote sustainable finance ‘as such’, thus creating a master frame. Lastly, proponents of the critical frame have been at the margins of sustainable finance. Nonetheless, they maintained some connections to the centre of the policy subsystem.
In the fifth chapter, the four frames are linked to four academic paradigms: 1) modern financial theory, 2) ecological economics, 3) environmental and climate economics and 4) a hybrid evolutionary systems paradigm. This linkage allows for identifying the differences of frames according to common categories that are derived from the philosophy of science. Furthermore, this sorting establishes the first part of the ideational transmission where ideas travel from academia to the actors inside the policy subsystem. By matching citation lists that reflect academic paradigms to the corpus that represents the knowledge production within sustainable finance, I find that only about one quarter of the actors engages with the academic literature. The most frequently referenced academic paradigm is modern financial theory. This goes both for citation numbers and the use of concepts. However, not all references are supportive since modern financial theory is also referenced by challengers who try to unpack and delegitimise it. Lastly, while there is a co-variation between academic paradigms and frames, the actors inside the policy subsystem often draw from multiple
economic ideas. For instance, despite significant theoretical differences, some actors use both environmental and ecological economics to link finance and the economy with the environment.
Chapter 6 concludes the empirical part of the thesis by describing the debates and socio-technical instruments that translate frames and economic ideas into policy.
The chapter identifies four debates and five types of socio-technical instruments.
Subsequently, both debate positions and socio-technical instruments are linked to frames and academic paradigms. While most of the debates are internal to the dominant risks and opportunities frame, the socio-technical instruments vary more in line with the frames. Also, in ‘scientised’ locations like central banks, academic paradigms seem to be of greater relevance as dividing lines than frames. The chapter closes by pointing out that socio-technical instruments are more politicised than debates. It links this observation with the hypothesis that stipulates that depending on the maturity and size of the policy subsystem, the persuasive or performative transmission channel is more influential.
The seventh chapter concludes the thesis by suggesting avenues for future research that could build on the findings of this thesis. First, future research could explore how evolutionary and crisis cases are related to ideational dynamics. A possible way to do this would be to look further into the hypothesis on how the maturity and size of a policy subsystem relates to the transmission of ideas.
Furthermore, research that draws on the literature from environmental politics, IPE and STS could further explore how the changes to the financial system that are associated with sustainable finance influence capitalism’s response to environmental crises. The final chapter also discusses the limitations of the approach of this thesis. It concludes by pointing out the practical implications of the findings.
33 1.5 Original Contributions
This thesis makes theoretical, empirical and methodological contributions to constructivist IPE and environmental politics. On the theoretical side, it takes stock of the literature on policy paradigms and aims to clarify the discussions about the concept by outlining a process that specifies the connections between operationalisable concepts. These concepts are empirically applied through the combination of network analysis techniques, text analysis, interviews and participant observation. This builds on existing methodological toolkits but also expands them.
A second theoretical contribution is that the thesis studies a case of evolution rather than of crisis from an ideational perspective. Therefore, it helps to remedy the bias of focusing on crisis that is present in the literature. The focus on an evolutionary situation also helps to develop a more comprehensive framework for studying the role of ideas in policymaking processes.
The thesis also makes an important empirical contribution to the study of environmental politics. By conceptualising sustainable finance as a system and by sorting actors, debates and socio-technical instruments according to ideational categories, it helps to better understand the linkages between finance and environmental issues. While it is beyond the scope of this research project to make predictions about how the structure of sustainable finance will impact the environment in the future, understanding the functioning of the system nevertheless enables us to come up with informed conjectures about these relationships through showing how different options for governing sustainable finance work and which ideas underpin them.