In 1967, Gordon Tullock asked why firms do not spend more on campaign contributions, despite the large rents that could be generated from political activities. We suggest in this paper that part of the puzzle could come from the fact that one important type of political activity has been neglected by the literature which focuses on campaign contributions or political connections. We call this neglected activity “asset freezing”: situations in which firms delay lay-offs or invest in specific technologies to support local politicians’ re-election objectives. In doing so, firms bear a potentially significant cost as they do not use a portion of their economic assets in the most efficient or productive way. The purpose of this paper is to provide a first theoretical exploration of this phenomenon. Building on the literature on corporate political resources, we argue that a firm's economic assets can be evaluated based on their degree of “political freezability,” which depends on the flexibility of their use and on their value for policy-makers. We then develop a simple model in which financial contributions and freezing assets are alternative options for a firm willing to lawfully influence public policy-making, and derive some of our initial hypotheses more formally.

The increasing impact of the international trade governance regime on the domestic regulatory sphere and the growing inter-linkages between international companies through their involvement in global value chains, have complicated corporate political activity (CPA) in the trade arena and changed the way companies interact with governments in this context. This paper draws on several recent examples of novel forms of CPA in trade conflicts at both multilateral and regional (E.U.) level, to provide an updated conceptual framework of trade policy CPA, which takes account of the increasing complexity and interconnectedness in the world economy. We highlight, in particular, the fact that this changing context means that “domestic” interests are often heterogeneous. The international linkages of a firm may dictate trade policy preferences more than its nationality. In addition, non-government actors increasingly react to globalization by mobilizing transnationally, with positive and negative impacts for CPA. CPA strategy has adapted to that reality, in both home and host country contexts, leading to novel cross border alliances and even political activity in countries where, although their local presence is relatively low, companies find common interests.

Since the late 1980s, the Cooperative Research and Development Agreement (CRADA) has been a prominent vehicle used to support collaboration between US federal laboratories and private firms. This paper examines the structure and goals of one of the most ambitious CRADAs conducted to date, the EUV CRADA, which involves three Department of Energy laboratories and leading US firms in the semiconductor industry and is aimed at the development of next-generation lithographic technologies. This large project is an important case study in ‘post-Cold-War’ technology policy and government-industry collaboration. Although the EUV project represents significant improvements in the design and management of CRADAs, it also illustrates the inherent difficulties of balancing political and economic goals in complex technology development programs.

Scholarship in international political economy (IPE) has noted the rise of resource nationalism in since the early 2000s. Despite the increased presence of state regulation in the resource sector, resource nationalism has not been incompatible with foreign investment. This article contributes to better understand resource nationalist policies that emerged in recent years and offers new theoretical insights to explain state-IOC relations by integrating obsolescing bargaining theories and constructivist approaches. Drawing on the case of Venezuela, this article explains how the Chávez regime pursued a hybrid model of control and welcoming of investments in the oil sector. The article argues that both bargaining insights and ideational considerations are important in explaining this model. In the context of high oil prices and sunk investments, it is unsurprising that a leftist government would seek to renegotiate contracts to seek better deals from extractive companies. Yet, focusing exclusively on those incentives misses important ideational drivers for the government to keep investors in the country. For Chávez's government, effecting changes in the oil policy was possible after waging an intense battle with its NOC, PDVSA, over control. Association with foreign investment became crucial to build its socialist model and to control its own company.

In 1996, the Finnish government initiated an Action Plan aimed at the more effective control of economic crime and the grey economy, involving wide-scale reform in legislation, regulatory agencies, enforcement practice, and research activities. The emergence of this Action Plan forms the empirical focus of this article, which addresses two specific research questions. First, what were the economic, social and political factors that produced this Action Plan? Second, how can this initiative contribute to a critical assessment of the claims of “globalization discourses,” which seem to render such an idiosyncratic nation-state development as unlikely? The article critically examines some of the elements of globalization discourses with particular respect to the implications for the nature of contemporary states and the possibilities for the more effective regulation of corporate activity. It then outlines the processes and events that allowed the Finnish Action Plan to emerge. Finally, it asks what lessons are to be learnt from the Finnish case, before identifying some further lines of enquiry to be pursued. This Finnish initiative seems to represent one important instance of the extent to which states can develop relatively autonomous economic and social policy, even where this appears to be detrimental to the interests of “capital.”

Governments support clean technologies to advance both environmental goals and national competitiveness. By adopting environmental policies early on, governments are argued to create durable competitive advantages for domestic companies that develop clean technologies for export to late adopters. This paper argues that policy competition between lead and follower markets conditions the ability of governments to create durable competitive advantages in low-carbon technologies. Depending on the complexity of the technology, we observe two patterns of green industrial policy competition. In low-complexity technologies, such as solar photovoltaics, follower markets are likely to adopt policies that support manufacturing capacity to rapidly achieve price advantages from economies of scale, with global supply chains intensifying this competition (“scaling up”). In high-complexity technologies, such as electric vehicles, follower markets are likely to adopt policies that support research and development to develop differentiated high-tech products for export (“innovating up”). We also suggest that new forms of interdependence in policy competition can affect the political sustainability of lead market policies. Competition in scaling-up is more likely to undermine political coalitions in favor of government support for low-carbon technologies, while innovating-up dynamics embed political coalitions that support lead market policies for low-carbon technologies.

The global financial crisis of 2008, its following bank bailouts, and associated corporate impunity sparked a renewed interest in the concept of the structural power of business and the question of “who rules?” in capitalist societies. This new wave of scholarship mitigated some of the problems of the original, theory-driven discussions from the 1970s and 1980s. But despite significant advancements in the empirical identification of business power, we lack a unified framework for studying its working mechanisms. So-called hybrid approaches, drawing on instrumental and structural power for their analyses, display high potential for such a unified and easily applicable framework. We build on this hybrid tradition and propose a novel model that integrates instrumental and structural power analysis into a basic framework. With this, we recalibrate the often rigid division between instrumental and structural power forms and emphasize the role of perceptions as key for understanding the dynamics of business power over time. We illustrate this parsimonious framework by an analysis of the plans of the Dutch government to abolish a dividend tax in 2018 that would have benefited a number of large multinationals but collapsed before implementation.

This article investigates corporate responses to environmental regulation of fish farming in Norway, the world's largest producer and exporter of salmon. We note a puzzling strategic divergence within the industry: whereas small firms have strongly opposed new standards, large and multinational firms have supported or even demanded stricter regulation. Traditional models for business response strategies can explain this divergence only partly. We develop a supplementary, explanatory perspective focusing on company size and predatory opportunities, to show how large and dominant corporate players can use environmental regulation strategically to strengthen their competitive advantages at the expense of small and weaker rivals. This highlights a neglected dimension of regulatory effects and motives behind corporate demand for strict and costly standards. It aso shows how environmental regulations may cause trade-offs with local development concerns, relevant to other natural resource-based sectors evolving from smaller-scale production towards full-fledged industrialization.

Negotiations for China's accession to the WTO provoked a debate between pessimists who believed that opening the economy would lead to a flood of imports and a de-nationalization of manufacturing industry, and those who believed that it would spur rationalization of state-owned enterprises, lock in domestic reforms, attract foreign investment, and open the way for trade expansion. The industry most frequently mentioned as endangered was motor vehicles, where an awkward combination of Stalinist central planning with localized autarky had resulted in a proliferation of inefficient producers. With the partial exception of two investments by Volkswagen, initial joint ventures in assembly operations failed miserably. China's commitments on joining the WTO banned (or at least complicated) many of the most important industrial policy tools it had used to promote the auto industry since the opening to joint ventures in the early 1980s'including performance requirements, high tariffs, and numerical quotas. After accession in 2001, tariffs fell steadily while output and foreign investment soared. The Chinese government moved towards a lighter-handed but more effective form of industrial policy that reduced top-down planning while expanding market incentives and scope for managerial freedom. Rather than destroying industrial policy for the auto industry, WTO accession constrained and disciplined it. When foreign auto firms and their governments pushed for more aggressive protection of trademarks and other intellectual property rights under the WTO, the Chinese government initially stalled. Continuing pressure then tilted the balance of state policy toward promotion of independent design, whether by state-owned enterprises testing the boundaries of their joint ventures with foreign multinationals, or by audacious smaller firms purchasing foreign designs and technology to complement inexpensive local parts and assembly, thereby creating the conditions for the emergence of a more competitive industry.

We examine the characteristics of business firms that gain access to legislative and executive branch officials in the trade policymaking area. Our empirical analysis of over 1200 manufacturers reveals that legislators were most attracted to firms with foreign market expertise, firms which actively participated in politics with outside lobbyists and campaign contributions, and firms with significant employment in the state and/or district. Executive branch officials were responsive to firms with foreign market expertise, firms from industries that had previously received tariff protection, firms using in-house government affairs specialists and outside lobbyists to convey information, and firms making campaign contributions to members of the trade oversight legislative committees. Our results largely support the political market framework and provide insights about the attractiveness of certain demanders to suppliers of trade policies from the legislative and executive branches of the U.S. federal government.

The ongoing trade war between the United States and China represents one of the most severe deteriorations of trade cooperation in modern times. In this context, the ferocious trade rhetoric accusing China of breaking promises in trade policy is striking. A previously unexamined question in this context arises: How does this rhetoric shape individual attitudes toward bilateral trade cooperation? My analysis of original survey experiments from the United States and China (n = 4181) suggests that this type of rhetoric has important ramifications. Experimental evidence from both countries suggests that individuals react more strongly to rhetoric emphasizing negative than positive past behaviour of the trading partner. Overall, this pattern prevails independently of the identity of the trading partner. Promise-breaking trade narratives, a key contextual dimension of the US-China trade war, diminish the perceived level of trustworthiness of the other country. A conjoint analysis suggests that individuals’ trade cooperation attitudes are also shaped by rhetoric targeting issue areas beyond trade, such as military affairs and human rights. These findings highlight the importance of contextual factors accompanying the US-China trade war context. Thereby, this article emphasizes the potential for political elites to effectively leverage fundamental individual fairness principles for invigorating opposition to open trading relations.

The battle between the recording industry and those illegal sharing music over the Internet has gripped headlines over the last few years like few others related to the digital age. At its core, it is a battle about the meaning of property and thus a battle over the heart of the emerging information economy. This article critically examines the double punch of law and technology – the simultaneous and interwoven deployment of legal and electronic measures to protect digital content – and asks whether it is merely a defense strategy against piracy, as the industry asserts, or rather an attempt to fundamentally redefine the producer-consumer relationship. Based on some initial evidence for the latter proposition, the article analyzes reasons for concern, outlines the current politics of copyright policymaking that have given producers the upper hand, and sketches elements of a strategy to fight music piracy that does not infringe on basic consumer rights.

During the last decade, we have seen an increased opposition to globalization. Within this wave of criticism, firms and more specifically multinational corporations have been major targets, accused of multiple wrongdoings, such as social dumping, fiscal evasion, job cuts, trade deficits, abuses of power, and environmental damages. In many respects, this debate echoes the one that took place during the 1970s with respect to oil shocks, de-industrialization, and imperialism. At that time, several international organizations, such as the OECD, ECOSOC, ILO, and the European Community started to address the issue of multinationals and international investments, and advocated for the creation of guidelines to regulate their activities. The following paper explores the reactions of Swiss multinationals to these attempts, as well as their strategies for protecting their latitude in conducting business. Relying on archival material of the Swiss Union of Commerce and Industry and of the Federal Archives, this paper shows how the biggest companies in the pharmaceutical, machine, and food processing industries—all of them still being global players —decided to create a task force to deal with these emerging regulations at the international level.

This article tests two hypotheses about post-communist business associations. The first predicts weak business associations which are presented with insurmountable collective action problems by the flattened civil society inherited from totalitarianism. According to this hypothesis, no business associations are inherited from the previous regime, and associations are confronted with difficult-to-organize latent groups of large numbers of new small enterprises. The second hypothesis, as proposed by Mancur Olson, predicts strong business associations benefiting from the collective action advantages of the communist economic structure which was composed of small numbers of large enterprises. The hypotheses are tested with case studies of Poland's five most influential business associations. The conclusion is that the flattened civil society hypothesis is best borne out by the evidence. This suggests that, in other countries, political factors, rather than the standard communist economic structure, are more likely to explain the persistence of industrial super lobbies.

This article contributes to our understanding of how and why developing countries would comply with international banking regulatory standards, Basel standards. The article demonstrates the interplay between opportunity structures constituted by transnationalization of public policymaking and domestic institutional setting, and how forces of compliance resonate in the domestic politics of compliance. The empirical findings are based on Turkey's compliance with Basel standards. It relies on fieldwork that involves semi-structured qualitative interviews with senior regulators and bankers, which are complemented with analysis of secondary data. The article shows that a capable and willing regulator could capitalize on the top-down policymaking style which restricts the regulatee's access to international negotiations, and sets the terms at the domestic level. Direct access to international negotiations, resource asymmetry in favor of the regulator, and superior “negotiation knowledge” helped the regulator pacify a critical, skeptical regulatee, and drive the compliance process. The article also shows that the compliance process takes place at three stages: policy formulation at the international level, an “interpretation stage” in between the international and the domestic levels, and finally the domestic policy process.

As a case study in the proliferation of global rankings, we examine the initiation, construction of, and response to the Access to Medicine Index, which ranks pharmaceutical companies according to their respective contribution to access to medicine for developing countries. Since it has served as the model for constructing global rankings in the fields of nutrition, seeds, mining, possibly in the future, oil, seafood, mobile internet, and agricultural commodities, and it serves as a blueprint for the development of corporate sustainability benchmarks in line with the United Nations Sustainable Development Goals, its significance goes well beyond public health. From an economic-sociological perspective we argue, first, that rankings can be conceived as symbolic classifications that serve predominantly as market-based coordination devices. To understand the proliferation of global rankings, we argue, secondly, that they are an integral part of the changing balance of power in the domain of global public health consisting of a historical shift from international organizations as the central mode of governance and coordination to a more decentralized and diversified global field structure. This global field is formed by an increasing number and variety of actors, but lacks a central decision-making body. The case of the Access to Medicine Index suggests that a historical-sociological field perspective has analytical advantages over both the micro-analysis of socio-technical devices and macro-level approaches to issues of governance in contemporary capitalism.

The concluding article to the special issue critically reflects on arguments and analysis presented in the preceding articles. It argues that globalisation, new forms of private authority and the increased power of transnational business have not generally weakened the state, but rather advanced a business-oriented transformation of statehood. To understand this transformation the article first provides a very short overview of the state-globalisation debate. Subsequently, it deals more explicitly with the state theoretical debate. In particular, it brings together neo-Marxist and post-Weberian conceptualisations in order to address both the social nature of the state and the particular forms and processes by which it is interactively embedded in the economy and society. After an outline of the transformation of statehood and the strategic options for non-state actors, the article concludes with some critical remarks on the future of democratic politics.

The power of business is a very important issue for understanding the operation of democracy, but establishing the nature and extent of its power is not easy. We acknowledge that this is, in large part, an empirical problem and requires a more sophisticated conceptual framework to address it. Attempting to address this, the recent literature on the power of business has increasingly focused on the role of structure, agents and ideas. However, too little attention has been paid to how these concepts are defined and conceptualized. We argue that it is crucial to: specify the structures (economic/political/social) which we see as affecting the role of business; identify the agents, collective and individual, involved and how they interact; and specify which ideas are playing a role, at what level of generality and how these different ideas at different levels of generality interact. This article explores these issues through a critical consideration of the extant literature in order to provide a more developed framework for future empirical analysis.

This paper applies an economic approach to empirically investigate differences in inward foreign direct investment (FDI) patterns between East Asia and Latin America and discusses the implication of regional trade arrangements. International production/distribution networks in East Asia effectively utilize the new economic logic of fragmentation, agglomeration, and optimal internalization and seem to greatly contribute to economic development. The paper examines statistical data for international trade as well as the activities of Japanese and U.S. multinational enterprises (MNEs) and argues that international production/distribution networks, particularly in machinery industries, are extensively developed in East Asia while remaining immature in Latin America. The impact of regional trade arrangements is substantially different depending on whether international production/distribution networks have already been developed or not. Our findings suggest that the impact of FTAA on FDI in Latin America by East Asian MNEs could be either positive or negative, depending on the content of FTAA and accompanying policies. If differentials between intra-regional tariffs and MFN-based tariffs are kept large, import-substituting FDI from East Asia may stagnate or even decrease. With a proper policy package to nurture international production/distribution networks, on the other hand, FDI from East Asia could be accelerated and contributed to deeper integration of Latin America.

Rapid growth in the East Asian newly industrializing countries depended on institutional innovation. Authoritarian governments like Taiwan faced a dilemma: how to assure investors in a policymaking environment that made commitments difficult to sustain? In contrast to both the early developmental state literature and the new literature on authoritarian institutions, this article shows that “small” institutions have had an effect on both the credibility of commitments and the composition of the firms that the Taiwanese state sought to assure. In the 1950–1960s, insulated decision-making bodies with strong participation by foreigners and export-processing zones signaled government intent to both foreign and domestic firms. In the 1970–1980s, democratic decision-making structures were more decentralized and state interventions shifted in a more market-oriented direction. Even so, the Taiwanese government continued to use institutions such as the Hsinchu Science Park to extend assurances to domestic investors engaged in risky high-technology ventures.