What is an algorithm? Financial regulation in the era of high-frequency trading

Abstract

In response to the flash crashes and market manipulations blamed on high-frequency trading (HFT), algorithms have been brought inside the regulatory perimeter. This paper focuses on the most ambitious regulation directed at the practice: the algorithm-tagging rule in the German High-Frequency Trading Act. Fifteen interviews with stakeholders in the Act’s implementation serve to reconstruct how regulators defined an algorithm and help pose the question of to what extent regulatory definitions and data need accurately to represent financial practices to be useful. Although tentative in its findings, the research suggests that the algorithm-tagging rule may be providing valuable signals in the noise to trade surveillance officers and having virtuous effects on the cultures of trading firms. The conclusion argues that sociologists of finance should adopt a more balanced approach when evaluating regulatory technologies and heed MacKenzie’s 2005 call to open up their black boxes.     

Organized interests and administrative rulemaking: the state of Wisconsin's lobbyists and coalitions

This study examines interest groups undertaking lobbying activity focused on administrative rulemaking. The analysis utilizes a dataset composed of observations made during the 2009–2010 Wisconsin Legislative Session, including the entire population of groups lobbying during this time period. This research examines the participants, efforts, and coalitions utilized when groups engaged in lobbying activity related to rulemaking. Although scholars have examined interest group activity focused on rulemaking at the federal level, little work has focused on this behavior in the states. This study aims to further the understanding of this activity. Copyright © 2015 John Wiley & Sons, Ltd.     

Identifying Predictors for Children Witnessing Intimate Partner Violence

Research has shown that intimate partner violence (IPV) prevalence and severity is higher and IPV duration is longer among couples that have children. Women frequently report that their children are the reason why they stay, leave, or return to an IPV relationship. Our study used results from a two-wave telephone survey to determine what IPV-associated factors were significant predictors of respondents’ children witnessing IPV, as well as estimating prevalence of children’s exposure to violence. We found that an increase in respondents’ age was significantly associated with increased odds of a child being exposed to violence. We also found that children witnessing violence were almost twice as likely to have mothers who reported leaving abusers. We hypothesize that increasing age corresponds to improved confidence in help-seeking behaviors. Our findings represent an important first step for future research on understanding how children influence IPV victims’ decision-making in seeking out service providers for help.     

Prospects for Local Co-Governance

British local authorities and their partners are increasingly developing new ways of working together with local communities. The nature of this co-working, however, is complex, multi-faceted and little understood. This article argues for greater clarity of thinking on the topic, by analysing this co-working as a form of political co-governance, and drawing attention in particular to issues of scale and democracy. Using evidence from a study of 43 local authority areas, 16 authorities are identified where co-governance is practised, following three main types of approach: service-influencing, service-delivering and parish council developing. It is concluded that strengthening political co-governance is essential for a healthy democracy.     

‘It’s Not Like Never-the-Twain-Shall-Meet’: Politician–Staff Relationship Structures in Local Government

Local governments have two primary components: elected representatives and employed staff. The relationship between these two groups has significant impacts on local authority operation. Two key theoretical models used to characterise these relations, the well-established Politics/Administration Dichotomy and the recently conceived Complementarity Model, are employed here to explore relationships in New Zealand councils. Results show varying views regarding whether the separation of staff and elected representatives (councillors) is based on their respective roles or inputs. A role-based separation emphasises distinct ‘realms’, with elected representatives controlling policy making and staff controlling the implementation of policy. This approach supports a hegemonic relationship and embodies the Politics/Administration Dichotomy. On the other hand, an input-based separation emphasises the issues that each group should focus on, with councillors integrating community desires and staff contributing their technical expertise. The latter lends itself to interactive processes and is consistent with the Complementarity Model. Neither input nor role-based relationships are inherently superior; various empirical factors influence the suitability of each. This suggests that it is advantageous to have multiple theoretical models accounting for alternative local government relationship structures, but future research is needed to clarify the ‘best’ options for different contexts.     

Competing Expectations in an Index-Based Livestock Insurance Project

Despite donor enthusiasm for index-based microinsurance, globally, pilots have struggled to realise its promises. This paper considers the Kenyan Index-Based Livestock Insurance pilot, investigating the competing expectations held by actors including (re)insurers, researchers, donors, NGOs, and pastoralists. We explore expectations’ impacts on partner involvement, project outcomes, sales, and the future outlook for Kenyan livestock insurance. Quantitative analysis suggests early demand and subsequent backlash were not results of systematic mis-selling, but rather stemmed from clients’ unfulfilled expectations of patron-like relationships with insurance partners. We caution against exaggerated expectations of profitability and call for reflection and transparency amidst the embrace of insurance tools.     

Post‐Sovereignty and the European Legal Space

The political constitution of the European polity has become strained in recent years by insistent pressures on its institutional capacity to resolve social problems. The article examines the EU's polity crisis in the context of the development of a distinctive modern conception of secular constitutional authority, focused on the ideal of sovereign self‐determination. As the work of Neil MacCormick illustrates, the EU provides a radical challenge to the on‐going capacity of the concept of sovereignty to provide a framework to address problems of legitimacy. The article explores the nature of this challenge, its historical context and its consequences with reference to debates over the nature of constitutional pluralism. It sets out a path to the renewal of the European constitutional debate through a re‐consideration of secular constitutional authority and the necessity of its connection to the idea of sovereignty. The article seeks to re‐engage in the task of ‘questioning sovereignty’.