Item

Abstract

Scholars of financialization are increasingly turning to the role of the state in creating and supporting financial markets. The notion of the derisking state has been proposed to make sense of various state activities that alter the risk/returns of private investments in a hope to attract private capital. Despite its important contributions, the current under-standing of the derisking state as a macrofinancial phenomenon leaves key questions regarding the role of democratic politics unanswered. To address this question, this chapter argues for an analytical shift towards the politics of leverage, that is, how derisking is made politically beneficial. Drawing on an in-depth, qualitative case study of social impact investing in Britain where considerable subsidies have been paid in a hope to attract private investments to various issues of social welfare, this chapter shows how the amplitude of subsidies can be accounted for by a gradual, meso-level development that affected the political favorability of derisking policies. This also shows how institutional entrepreneurs exploit the unique malleability of the impact investing label to navigate challenging political terrains to mobilize subsidies.