IMO MORSe Seminar: Florian Ueberbacher (University of Zurich)

The Institute of Management and Organizations will be welcoming Florian Ueberbacher from the University of Zurich for our next MORSe Seminar on the 30th of May from 12:30 to 14:00 in PC04 in the Blue Building, he will be presenting the following paper:

Title: INDIRECT COMPELLENCE AND INSTITUTIONAL CHANGE: U.S. EXTRATERRITORIAL LAW ENFORCEMENT AND THE EROSION OF SWISS BANKING SECRECY
 
Abstract: We conduct a case study on the role of international coercion in national institutional change and introduce indirect compellence as a new mechanism for indirect coercion, that is, for coercing a targeted actor (B) to comply with the institutional demands of a coercer (A) if B is not directly dependent on A’s resources. Indirect compellence can be defined as the ability of A to gain compliance from B by threatening sanctions against a third party (C) if B does not comply with the institutional demands of A. In this case, the C becomes a ‘tertius miserabilis’, a third who suffers. We detail how and why indirect compellence enabled governmental authorities of the United States to overcome Swiss institutional barriers – notably the famed Swiss banking secrecy – by setting US extraterritorial law enforcement against Swiss banks and bankers. Based on our analysis we develop a constructivist theory of indirect compellence in institutional environments. Our theory gives primacy to targeted actors’ (i.e. Swiss policy-makers’) evaluation processes of and responses to coercive pressure and highlights that targets arrive at these evaluations and responses in ideologically contingent ways.