UCLA

Inspired by Michel Foucault's interrogation of the practices, logic, and technologies of governance – which form what he calls "governmentality" – this dissertation argues that Luxembourg's banking-secrecy laws and domestic political consensus have led to the dramatic growth of the country's offshore financial center since the 1960s. Secrecy and consensus – central aspects of what I formulate as "offshore governmentality" – characterize the strategies of Luxembourg's state and finance elites as they develop new markets, navigate changing political circumstances, and mitigate risks posed to their niches. Furthermore, I posit that a "state-finance complex" of elite actors in Luxembourg carries out "offshore governmentality."

Proceeding from this theoretical scope, I demonstrate how a governmentality of secrecy and consensus has enabled Luxembourg's "state-finance complex" to specialize in private banking, investment-fund administration, and art finance. I base my analysis of these three niches on data collected from media and archival sources, as well as from 80-plus interviews and participant-observation carried out with state and finance elites in Luxembourg. I also address this study's methodological implications and formulate a research platform – which I call "networking ethnography" – for social scientists to use in other elite contexts akin to the Luxembourg financial center.

I conclude my dissertation on an interpretive note, making a conceptual linkage between the figures of the banker and the priest. The 1981 banking-secrecy laws were premised on a statute from Luxembourg's nineteenth-century criminal code, which implies that a priest cannot divulge any information that he has heard from a confessing parishioner. During my fieldwork, I was told on a consistent basis that one of the main reasons for the growth of offshore finance was so that clients could hide money from their spouses, ex-spouses, and children. Thus, I draw a conceptual parallel between the banker and the priest, both of whom learn about the more delicate aspects of someone's life but are legally bound to keep this information secret. My closing argument is that it is this shared act of confession – a practice spanning secrecy and consensus – that gives "offshore governmentality" the profound social, economic, and political significance it enjoys in contemporary Luxembourg.