Why are risk-sharing rules uncertain? A sociological study of local financial governance

This article discusses the uncertainty of risk-sharing rules in local financial governance. That is, when the formal risk-sharing rules of financial transactions are agreed upon in advance, actual operations are uncertain. First, the institutional contradiction at the macro-level is an important structural source of the uncertain rules at the micro-level. Second, institutional contradictions endow actors with conflicting bases of legitimacy and driving forces of interest, which induces games of norms and interests among investors, local governments, and intermediaries with regard to risk-sharing rules and leads to the competitive pattern of varied risk-sharing rules. Last, the combination of multiple legitimacy claims and multiple mechanisms of power competition leads to uncertainty in the risk-sharing rules of actual operations.