The Private Roots and Public Branches of Regulation-by-Information: Understanding The Legal Incorporation of Rating in Finance and Accreditation in Healthcare (1900s-1970s)

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Gjata, Joris, Sociology - Graduate School of Arts and Sciences, University of Virginia
Gorman, Elizabeth, Department of Sociology, University of Virginia

This dissertation lies at the intersection of economic sociology, political sociology, and organizational sociology, and examines broadly, the emergence and transformation of regulation-by-information—a form of regulating producers through information products without specifying enforcement mechanisms. Existing scholarship emphasizes the effects and effectiveness of regulation-by-information above all. It neglects the processes through which regulation-by-information emerged and changed through time, and consequently, it fails to conceptualize and explain this kind of regulation. This dissertation addresses these gaps by tracing the evolution of two systems of regulation-by-information and their operators: rating and securities rating agencies in finance, and accreditation and hospital accreditation organizations in healthcare, in the United States. Using theories on the state regulation of industries and theories of institutionalization, and data on congressional records and hearings about the legal recognition of certain private rating and accreditation organizations, organizational histories and accounts, examinations of industry publications, and newspaper articles, I examine the emergence of securities rating and hospital accreditation as mainly private enterprises and their transformation into increasingly public endeavors, culminating with the legal incorporation of their sources. This study traces the history of legal incorporation to reveal the political and cultural struggles surrounding the emergence and transformation of regulation-by-information. I argue and show that the organizational identity work of rating agencies and accreditation organizations—how they presented their product and themselves—contributed to their successful institutionalization, their regulatory power, and their selection for incorporation into government rules and regulations.

PHD (Doctor of Philosophy)
regulation, securities rating, hospital accreditation, institutionalization, organizational identity, economic sociology, comparative historical sociology
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