Stability through Deliberation: The Financial Sector, Public Law, and Democracy


This project investigates the relationship between the financial sector and public law. The legal framework of the financial sector is often designed more or less in accordance with regulatory proposals from the discipline of (public) finance as a sub-field of economics. These regulatory proposals often cherish certain expectations on law's capacity to guide behavior. However, law is not always able to meet these expectations. The meaning of legal rules is often open-ended, contingent, and evolves with their context. The project investigates conflicts that emerge from the disappointment of expectations on (public) law as a means to regulate the financial sector.

As public law represents the joint connecting the financial sector with democratic decision-making, this project touches upon the age-old question whether democracy and capitalism can be reconciled. It argues that this is possible if one takes the deliberative dimension of the law more seriously. Law provides substantive, procedural, and institutional algorithms for decision-making. It does not, however, determine the outcome of such decisions in a mechanical way.

The main contribution of the project consists in a monograph by Matthias Goldmann. It will explore the conflicts arising from disappointed expecations on law's regulatory capacity at the example of policy rules and other legal strictures for decision-making in the fields of monetary law, fiscal policy, sovereign debt, banking regulation, and taxation on the domestic, European and international level. It challenges the traditional dichotomy between rules and discretion.

Further contributions complement this research. The PhD project of Victoria Adouvi investigates unintended consequences deriving from the regulation of investment law. The PhD project of Kevin Hinzen analyzes the capacity of law to frame the planning and implementation of budgetary decisions at the European level. The PhD project of Jia Hu investigates the concept and role of law in China's economic transformation.

The project started in 2016 and will run for up to six years. It is funded by the Volkswagen Foundation, by SAFE and by Goethe University. 

Key publications

"A History of Misunderstandings and a Discourse Theorethical Proposal" (Youtube Video) - Public Law & Finance, IUC Seminar by Matthias Goldmann, Turin, 20 March 2017.

Goldmann, Matthias, "The Great Recurrence: Karl Polanyi and the Crises of the European Union", 23 European Law Journal (2017) 272-289. A previous version is available at SSRN.

Goldmann, Matthias, "International investment law and financial regulation: Towards a deliberative approach", in Christian J. Tams, Stephan Schill and Rainer Hofmann (ed.), International Investment Law and the Global Financial Architecture (Elgar, Cheltenham 2017) 57-89.

International Investment Law and Financial Regulation: Towards a Deliberative Approach, in: Rainer Hofmann, Stephan Schill, Christian Tams (eds.), International Investment Law and the Global Financial Architecture, Elgar, Cheltenham 2017, in press. Draft available at SSRN.

Public Law and Finance: A History of Misunderstandings and a Discourse Theoretical Proposal (2016). Available at SSRN.

Special Issue: Democracy and Financial Order: Legal Perspectives. German Law Journal 17 (2016), issue 5, 705-906 (with Silvia Steininger). Available here.

A Discourse Theoretical Approach to Sovereign Debt Restructuring: Towards a Democratic Financial Order. German Law Journal 17 (2016), 709-746 (with Silvia Steininger). Available at the journal website.

La grande récurrence : Les crises de l’Union Européenne à travers de l’œuvre de Karl Polanyi.In: Speeches and Presentations from the XXVII FIDE Congress, Gy. Bándi, P. Darák, K. Debisso (Hrsg.). Congress Proceedings Vol. 4. Wolters Kluwer, Budapest 2016, 187-208.

Ganz Gallien? Fehlschlüsse aus dem wallonischen CETA-Veto. Verfassungsblog, 24 October 2016, available here.

The Financial Crisis as a Crisis of Public Reasoning, in: Benjamin Isakhan, Steven Slaughter (eds.), Democracy and Crisis: Democratising Governance in the Twenty-First Century. Palgrave Macmillan, Basingstoke 2014, 71-87.