Understanding How Business Influences Public Policy

congress-column-1018004_1920[We’re pleased to welcome authors David Coen of University College London and Matia Vannoni of the Università Bocconi. They recently published an article in Business & Society entitled “The Strategic Management of Government Affairs in Brussels,” which is currently free to read for a limited time. Below, Dr. Vannoni reflects on the motivations and innovations of this research:

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What motivated you to pursue this research?

Business touches every aspect of regulation and as such, understanding how business influences public policy and how it organizes political affairs is important. While government affairs have been well studied in the US and concepts such as revolving doors are now the accepted norm, we decided to focus on government affairs in the EU and explore how a different political institutional structure and business culture may affect business political action and organization.

As such, we decided it was time someone started to unbox the company and look at what is going on inside. This project seeks to study the day to day functioning of government affairs inside firms, asking questions like: who works in government affairs in companies, where these managers come from (where they studied and where they worked previously), which role they have inside the firm and so on.

In what ways is your research innovative, and how do you think it will impact the field?

Traditional approaches in management, political science and economics help us understand many aspects of corporate political activity, but not how government affairs are organized within the firm. This project studies how the political institutional environment affects the firms’ micro strategic decisions, such as the size, political functions and staffing of government affairs.

The project is innovative in both its data collection and empirical focus. First, the paper seeks to build an original data set on EU business political organization. Previous studies have tended to focus on single case studies and have been US focused. In this project, for the first time, we create a sample of more than 300 companies from different countries and industries and, by relying on different sources, we map their EU corporate political activities and the organization of their government affairs. We gathered data on how much companies spend in lobbying activities, whether they use external consultancies, how many individuals they employ in their government affairs office, who these individuals are, what their functions are and so on. As such, this is the first study of this kind.

It terms of findings, we show that in Brussels we see less “revolving doors” between business and EU institutions, rather the process is more a “sliding door” mechanism, where influence is a function of expertize, credibility and reputation. As such, the staff in government affairs is more likely to be technical experts, with long run careers in the industry rather than former politicians and civil servants.

What advice would you give to new scholars and incoming researchers in this particular field of study?

The advice we give to new scholars who wish to study corporate political activity is to always try to create bridges between disciplines, both theoretically and empirically. For instance, this project bridges the gap between the political science literature on lobbying and the management literature on capabilities. Yet, this is not enough. Future research in this field should continue this cross-fertilization, by, for instance, looking at how the public management literature might help explain the interaction between business and society. At the empirical level we would encourage the collection of large-N data, increased comparative research and potentially the introduction of experiments, which are currently in vogue in public management.

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Monument photo attributed to ssalae. (CC)