The affective underpinnings of soft power

The concept of soft power occupies a prominent place in International Relations, foreign policy, and security studies. Primarily developed by Joseph S. Nye, the concept is typically drawn upon to emphasize the more intangible dimensions of power in a field long dominated by overtly material (i.e. military) power. Recently, some scholars have reframed soft power — specifically the key notion of attraction — as a narrative and linguistic process. This literature, however, has downplayed some of the other deep-seated underpinnings of soft power, which this article argues lie in the dynamics of affect. Building upon the International Relations affect and aesthetics literatures, this article develops the concept of soft power as rooted in the political dynamics of emotion and introduces the concept of affective investment. The attraction of soft power stems not only from its cultural influence or narrative construction, but more fundamentally from audiences’ affective investments in the images of identity that it produces. The empirical import of these ideas is offered in an analysis of the construction of American attraction in the war on terror

Consolidation, Scale Economies and Technological Change in Japanese Banking

The paper examines the technological structure of the Japanese banking sector before the onset of the banking crisis and structural reforms of the 90s in order to shade light on the logic of the recent trend to consolidation in the industry. While diseconomies of scale are shown to be pervasive in the large banks, defying the rationale for consolidation, the paper presents evidence of an underlying technological progress that operates to significantly increase the industry’s efficient minimum size, generating economies at larger banks, thus justifying the ongoing trend in consolidation. The results suggest that, to the extent that consumers can benefit from lower costs of bank production, policies that promote a more concentrated banking structure might be consistent with public interest.http://deepblue.lib.umich.edu/bitstream/2027.42/40133/3/wp747.pd

Stock Markets Liquidity, Corporate Governance and Small Firms

While the importance of equity markets as a vehicle for capital formation is well recognized, their role in providing economically valuable governance services, particularly to small and medium enterprises (SME), has not received much attention. The paper examines the role of public policy in promoting the governance role of secondary equity markets for the benefit of SMEs. The paper first outlines the mechanisms through which equity markets could promote good governance in small firms, showing that equity markets serve as a monitoring and control conduit for outsiders to enforce good governance at the firm. It then establishes that the ability of equity markets to deliver good governance is closely related to those markets’ liquidity, presenting further international evidence that firms supported by liquid equity markets realize improved economic performance. Thus, the governance services of secondary equity markets have real economic value to the firms. The paper then argues that public policy can have a positive impact on the effectiveness of equity markets in delivering governance services through enhancing market liquidity. It examines the impact on market liquidity of two significant U.S. Securities and Exchange Commission (SEC) regulatory reforms applied to The Nasdaq Stock Market: SEC’s ‘trade reporting’ rules of 1992, and SEC’s “order handling” reforms of 1997. The paper concludes that public policies that increase market transparency and efficiency -- such as “trade reporting” requirements and better “order handling” rules -- promote the effectiveness of the secondary equity markets in delivering corporate governance through increased market liquidity.http://deepblue.lib.umich.edu/bitstream/2027.42/57263/1/wp883 .pd

Psychoanalytic theory and textual interpretation

No abstract available