Regulation and the Management of Expectations - Rating Agencies Revisited

In the aftermath of the 2008 crisis, scholars have begun to revise their conceptions of how market participants interact. While the traditional “rationalist optic” posits market participants who are able to process decisionrelevant information and thereby transform uncertainty into quantifiable risks, the increasingly popular “sociological optic” stresses the role of uncertainty in expectation formation and social conventions for creating confidence in markets. Applications of the sociological optic to concrete regulatory problems are still limited. By subjecting both optics to the same regulatory problem—the role of credit rating agencies (CRAs) and their ratings in capital markets—this paper provides insights into whether the sociological optic offers advice to tackle concrete regulatory problems and discusses the potential of the sociological optic in complementing the rationalist optic. The empirical application suggests that the sociological optic is not only able to improve our understanding of the role of CRAs and their ratings, but also to provide solutions complementary to those posited by the rationalist optic.

Addressing Multilevel Program Complexity by Evaluation Design

In this paper, we present the evaluation design for a complex multilevel program recently introduced in Switzerland. The evaluation embraces the federal level, the cantonal program level, and the project level where target groups are directly addressed. We employ Pawson and Tilley’s realist evaluation approach, in order to do justice to the varying context factors that impact the cantonal programs leading to varying effectiveness of the implemented activities. The application of the model to the canton of Uri shows that the numerous vertical and horizontal relations play a crucial role for the program’s effectiveness. As a general learning for the evaluation of complex programs, we state that there is a need to consider all affected levels of a program and that no monocausal effects can be singled out in programs where multiple interventions address the same problem. Moreover, considering all affected levels of a program can mean going beyond the borders of the actual program organization and including factors that do not directly interfere with the policy delivery as such. In particular, we found that the relationship between the cantonal and the federal level was a crucial organizational factor influencing the effectiveness of the cantonal program.