In this dissertation, I delve into the complex case of the policy response to the housing market collapse in the recent financial crisis in the U.S., which provides useful empirical ground to explore a theoretical puzzle: how does culture affect policy action? I examine this theoretical question from three angles in the dissertation. First, how do cultural meaning structures affect the interpretation of economic events and the policies developed in response? Second, to what extent does the cultural meaning that economic events take on affect policy independently of other important factors such as economic conditions and political ideology? Finally, how does convergence or divergence of cultural meaning affect actors’ ability to coordinate policy actions?
In the first part of my dissertation, I establish a theoretical framework that incorporates culture as structures of meaning and culture as taken-for-granted conceptions and specifies how these two cultural forms interact to shape policy.
To provide evidence for this framework, I use LDA topic modeling to code transcribed speeches from government officials . I then use network methods to analyze the structure between pre-crisis themes in the discourse, the emerging discussions on the housing market events, and advocated policies. These data and methodological tools allow me to examine how on-going pre-crisis political discourse imbues the unfolding housing market crisis with particular meaning, thus influencing how the events are understood and the policies developed in response.
I find that different government agencies constructed the crisis differently, which impacted the policies they advocated.
The second part of my dissertation tests the independent influence of cultural meaning on policy outcomes and the extent to which a similar understanding of the crisis creates a cultural pathway for diffusion of foreclosure prevention policies.
To do this, I collected data on foreclosure prevention policies that some U.S. states implemented during the foreclosure crisis. I combine these data with measures of other important factors such as political party control in state legislatures, the extent of the housing market collapse in each state, and states’ fiscal conditions. I also collected media coverage of the foreclosure crisis in each state.
Using event history analysis, I find that that how events are portrayed affect states’ probability of passing policy, independently of housing price declines or political party make-up of state legislatures.