Institute for Research on Labor and Employment

[first revision] The financial crisis of 2008 raised the politics of regulation to a new level of practical as well as scholarly attention. This paper argues that the post - enactment politics of implementation matter as much to the success of regulatory reform as the politics of passing legislation. In contrast to the prevailing concepts of regulatory capture and business power, we find that recent reform s in U.S. financial markets hinge on intellectual resources and new organizational actors that are missing from existing theories of regulatory change. In particular, small advocacy groups have proven significantly more successful in opposing the financial - services industry than the existing literature predicts. By maintaining the salience of reform goals, elaboratiung new analytic frameworks, and deploying specialized expertise in post - enactment debates, these small organizations have contributed to a diffuse but often decisive network of pro - reform actors. Using empirical material from the rule - writing process for macroprudential supervision and for derivatives trading, we show that these small organizations coalesce with other groups to form a new stability alliance that has prevented industry groups from dominating financial regulation to the degree that occurred in earlier cases of regulatory reform.