How Transnational Conflict leads to the Deinstitutionalization of a National Institution: The Case of Swiss Banking Secrecy

From our case study on the deinstitutionalization of the Swiss banking secrecy, we developed a grounded process theory on how transnational institutional conflict leads to the deinstitu-tionalization of a national institution. Our theory suggests that deinstitutionalization unfolds through an interactive conflict process with four sequential practices of national actors' re-sistance and transnational challengers' power use. Our model highlights that when a national institution is problematized by transnational challengers, national institutional guardians' at-tempts at protecting the supremacy of the national institution can have important unintended consequences: On the one hand, by inducing feelings of safety among incumbent organiza-tions, guardians' protection work can motivate incumbent organizations to circumvent the demands of transnational challengers. On the other hand, by inducing feelings of outrage among transnational challengers, protection work can lead these challengers to escalate the institutional conflict. Together, these developments can provoke institutional breaches and contribute to deinstitutionalization of a national institution.