The Efficacy of Business Political Activity: Competitive Considerations in a Principal-Agent Context

This paper attempts to specify some conditions affecting the efficacy of business efforts to influence political decision making in legislatures and regulatory agencies. Two streams of literature are integrated to provide a model of political decision making from political economy and to draw on the strategic management literature to facilitate consideration of the implications of competition in the market to influence political decisions. ”In short, the overall policy impact of business political activity remains debatable, and the desirable mode and level of corporate political influence& remains undefined. New research on business and politics should involve something more than the accumulation of additional case studies; these are the raw materials for serious analysis, but not the final product. The significant studies will be those that specify more clearly the conditions under which political activity of different types and levels produces (or fails to produce) different kinds of effects.” Preston, 1986 Given the structure of the American political economy, business organizations rank high among our most important political institutions and are& inevitable participants in the political process. The more we understand of the political structure, operations and objectives of these organizations and those who run them, the more insightful we can be concerning the actual conditions of political democracy in the United States. [However]& honest disagreement aplenty exists& concerning whether “Big Business”& poses a real or chimerical, a present or future, an active or passive threat to American democracy. Epstein, 1980.