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.

In recent years, Saudi Arabia has strengthened its regulatory and financial institutions and adopted many reforms concerning its business environment. Yet, Saudi Arabia seems an unlikely country to succeed at implementing business environment reforms given the presence of an authoritarian state and rent-seeking behavior from elites that is the outcome of oil wealth. What explains the ability of Saudi Arabia to initiate reforms that many states have struggled to implement or uniformly reject? This paper argues that the country's monarchical system helps the government solve the credible commitment problem with private sector elites, thereby facilitating business environment reforms. The monarchical system does this by legitimizing and reinforcing the institution of economic familism. The salience of this institution provides a reliable guarantee to private sector elites that their rents and business interests will be protected during the reform process. The case of Saudi Arabia stands as an important example of how absolute monarchies can pursue certain economic reforms, and also how an informal institution can solve the credible commitment problem in an authoritarian context where formal institutions are either absent or weak.

The Trade Related Intellectual Property Agreement (TRIPS) has had a profound effect on industrialization and innovation, as well as access to medicines in cases of public health crisis such as HIV/AIDS. However, compliance with TRIPS has varied in developing countries, despite heightened international pressure. For instance, Brazil has pursued a coherent approach to its HIV/AIDS health crisis, while India has failed to take care of its HIV patients despite late compliance with the TRIPS agreement and the presence of business firms that produce the generic medicines for HIV/AIDS. This article suggests that divergence in TRIPS compliance is the result of a linkage politics, in which global variables (global rules, global supply chains and global networks) reach into the domestic political economy to alter the interests and capabilities of domestic actors. Indian pharmaceutical firms have developed external and export interests that lower incentives for the Indian state to design a nationally relevant public health policy, while the Brazilian health movement with its societal and external linkages puts pressure on the Brazilian state to defend the interests of its HIV patients even at the cost of patents. We conclude by suggesting that linkage politics is better at helping us understand compliance with international agreements than existing explanations, with important consequences for the effectiveness of international institutions.

To what extent do transnational companies (TNCs) have the capacity to influence public policy? This article uses the results of a major new study of TNC ownership to shed light on this issue. It is found that TNC ownership and control is extremely concentrated and that there is an inner core of firms with strong co-ownership links that is overrepresented in the membership of major business organizations. It is concluded that these factors enhance the potential for TNCs in general, and core TNCs in particular, to influence public policy.

Management consultants provide strategic advice to public sector agencies and departments throughout the US, contributing to what some scholars call the “hollowing out of the state.” What ideational frameworks underlie these public -private relationships? Findings from a survey of management consultant show that they believe that they are contracted because they provide knowledge that is unavailable inside the public sector and that their ideas are more innovative. This study helps to explain management consultants’ perceptions of their services contracted by US public sector. By gauging the perspectives of management consultants, this research will potentially help academics and practitioners to better understand public agencies’ contracting of management consultants. This article provides preliminary steps towards better understanding and analyzing the use of management consultants by different levels of the US public sector.

We adopt a novel use for an old type of data – interest group scorecards – to explore the impact business organizations have on the political process. By aggregating congressional scorecards, we can develop a sense of how satisfied groups are with the US Congress as a whole. To do this, we generate interest group-level ratings of the US Senate derived from individual-level ratings of each senator. We find business groups tend to give higher aggregated scores relative to other types of groups, suggesting business organizations more often get what they want form Congress, which in turn, illuminates the importance of these groups in the political process. We also find that well-funded “niche” organizations tend to show higher levels of satisfaction with senators than larger groups with broad public missions.