Managing Crises,Crafting a Market: Legal Form and Political Dynamic in Brazil's Banking Market Reconstruction (1994–2002)

Institutionalist economic sociology reveals that markets are constructed through state power and legitimacy, not spontaneous phenomena. However, understanding the ongoing social processes of market building remains limited, as changes are usually framed as byproducts of crises. Constructivist approaches offer valuable insights into the political processes of institutional construction and change. Yet, studies often neglect the legal aspects, leading to the underappreciation of how different institutions gain varying political weight and socioeconomic consequences. This paper addresses this gap by examining the connections between legal form and political dynamics in market construction. Using Brazil's banking market reconstruction (1994–2002) as a case study, it illustrates how legal forms influenced critical political variables, such as actors involved, policy options, the timing of state actions, crisis diagnoses, and transparency. Through qualitative content analysis of documents, the paper demonstrates how legal mechanisms profoundly shaped the politics of market changes.