The structure of community networks defending the concept of Iceland's financial stability

Abstract

Actor-network theory suggests that those responsible for the operations of a complex system have reason to defend the idea of the system’s stability in the face of challengers who suggest the system may have problems. One form this defence can take is the formation of a complex social network that makes it difficult for challengers’ claims to be reasonably considered. This paper illustrates the formation or activation of such a network of Icelandic bankers, analysts, politicians, academics, business executives and newspapers, as well as their rational and emotional public arguments, in defence of the idea of the stability of the Icelandic banking system when challenged by the Danske Bank report of 2006. The analysis shows why it was difficult for the Danish challenge to receive a credible hearing among the Icelandic citizenry, which meant that citizens had a difficult time getting a clear picture of what was happening in their community. This research also shows a wider application for actor-network theory than previously discussed in the literature and draws implications of network formation or activation for policy makers.