Lasse Folke and Anders Sevelsted publishes paper in Dansk Sociologi
The paper argues that Callon and MacKenzie’s theories on the performativity of economics contribute to understanding important social dynamics of markets that are increasingly technical, and how economists are key in constructing them. It introduces the authors’ core concepts and claims, and tests these in an analysis of a global market for microfinance.
This analysis reveals that despite the central role of economists in constructing the market, the performative function of the generally accepted theory of microfinance (the group contract model) remained legitimizing and linguistic, and hence never had much direct material effect at the local village level.
The market was mainly a political construction driven by the World Bank from the late 1990s and on in order to promote commercial microfinance institutions. In this process however the ‘efficient market hypothesis’ from neoclassical economics became somewhat effective - that is, affected economic practices directly - in the context of an electronic market platform for microfinance (The MIX Market).
On this platform financial information of microfinance institutions, including credit ratings and standardized financial statements, were made publicly available to investors as an attempt to create ‘market discipline’. This commercialized practices. The article finally points to and discusses a number of weaknesses in deploying the theory of performativity.