Navigating norms and invisible rules: Explaining the case of business influence in international shipping regulation

This article develops a micro-level theoretical perspective of business influence in international negotiations. By drawing on organizational institutional theory, the article proposes that site-specific institutionalized norms can structure the nature and extent of business power. The article illustrates the value of this perspective through an illustrative case study of the International Maritime Organization (IMO) through interviews and participant observation of on-site dynamics during negotiations on environmental shipping regulation. The article shows how, in the case of the IMO, specific institutionalized norms and beliefs structure private actors’ possible influence and their claims to authority. In particular, strongly held beliefs about the nature of political deliberation in the IMO both constrain and enable business interests, sometimes overriding the general structural power of the shipping industry. This research implies that future scholarship of business power and lobbying should be attentive to specific institutionalized ideas structuring business actors’ range of legitimate activities, in particular in international institutions where individual negotiation sites can develop idiosyncratic norms and beliefs about the legitimacy of private actor participation.

Corporate Stakeholders

Chapter 5 echoes the growing sentiment that corporations need to take into account other interests besides that of their shareholders. It traces the origins of the idea that corporations exist solely to increase the wealth of their shareholders and explains how this belief in shareholder primacy came to be accepted as a truism by many scholars, judges, and commentators. When Milton Friedman originally popularized this idea in 1962, he wrote that corporations should serve shareholder interest “within the rules of the game.” These days the rules of the game are influenced tremendously by business lobbying. The chapter explains how the political influence of labor waned and was replaced by business influence in the 1970s. Since that time, Congress has done very little to protect labor because business interests have become extremely powerful lobbyists and substantial donors to political campaigns.

The Political Economy of Conservation

This chapter introduces a strategic actor framework of environmental norm diffusion, which it uses to develop a theory of the diffusion of the norm of large marine protected areas. By incorporating domestic material interests into environmental norm diffusion, it builds norm diffusion theory to better explain why certain environmental norms gain global traction while others do not, as well as why there is considerable variation in how environmental norms are localized. The chapter also examines the interests of key stakeholder groups, including the state, extractive and non-extractive industry, environmental groups, and local communities. The framework foregrounds business influence to explain how governments attempt to reconcile new environmental norms with commercial interests. In some instances, business influence can lead to stronger protections, but more often tends to undermine conservation goals. This chapter analyses the potential and the limits of business influence over state conservation policy.

A Dive Tourism Haven in Palau

This chapter examines the Palauan government’s creation of the 500,000 km2 Palau National Marine Sanctuary. Palau’s critical dependence on its ecotourism sector—54% of GDP in 2015—meant that business interests and conservation objectives were largely aligned in Palau. At the same time, profits from commercial fishing in Palau’s waters went primarily to foreign-based fleets. The legislation for the sanctuary not only protected biodiversity, but was an effort to restructure the country’s commercial fishing industry to better benefit Palauans. Whereas most prior large marine protected area campaigns had been initiated by environmental groups, this one was initiated by Palauan President Tommy Remengesau Jr. This chapter demonstrates that, given a favorable political economy, business influence can sometimes lead to better protections.

DP 0255 - ‘Robin Hood in Reverse’: persistence and barriers to redistributive fiscal policy

Despite improvements in the living conditions of the population, there has not been a significant change in income disparities. Since the growth of left-wing parties and political competition as per the median voter hypothesis do not stand in the Brazilian case, what could explain the tenacity of inequality in the country? To answer this, the paper, grounded in new institutionalism theory, employed a process-tracing method to explore the causes of the continuity of unequal income distribution in Brazil. The inquiry tests the mechanism using the case of redistributive fiscal policy and the literature of electoral rules and business influence in the political system. This analysis reinforces that the Brazilian government not only misuses its fiscal instruments to distribute income, but also acts as a ‘Robin Hood in reverse’: that is, it withdraws from those who have less to subsidize or pay transfers to those who have more.

Brexit and British Business Elites: Business Power and Noisy Politics

This article analyzes business power in the context of noisy politics by comparing business involvement in two British referendum campaigns: one about membership in the European Communities in 1975, and the Brexit referendum about European Union membership in 2016. By exploring these two contexts, the article seeks to identify the conditions under which business elites can and cannot be effective in a context of noisy politics. Three key factors are identified as determinants of business influence during periods of noisy politics: the incentives to get directly involved in noisy politics; the legitimacy of business involvement; and, finally, the capacity to act in a cohesive way. The article shows that these factors have changed substantially over the last four decades because of wider changes in the nature of capitalism, and their impact on business power in the United Kingdom and more generally is discussed.

British Business on the West Coast of South America

Broadly speaking, historians have considered the development of British business on the west coast of South America in the 19th and 20th centuries with a strong focus on Chile and Peru and in the light of two different historiographical approaches: debate over the organization of British business overseas and controversies over informal imperialism and dependency. Initially, the most visible examples of British business influence were merchants who arrived at the time of independence in the early 19th century, although from the middle of the century there was also significant investment in government bonds (sovereign debt). After the War of the Pacific (1879–1883), “freestanding companies” and investment groups, often organized by commercial houses handling Latin American exports, became the main vehicle for British capital flows. The activities of merchants and other suppliers of business services, such as shipping firms, banks, and insurance companies, together with the development of freestanding companies in railways and resource extraction after the War of the Pacific, certainly accelerated the incorporation of Peru and Chile into the expanding global economy. While it is difficult to find concrete examples of direct intervention by British firms in local politics, the growth of foreign business did set constraints on the autonomy of Latin American governments, which became dependent on the direct and indirect income from commodity exports. However, it also provided opportunities for local politicians and business elites, especially in the 1880s and the decade before the First World War when London financial institutions were seeking new openings for direct investment overseas. During the interwar period, British business influence began to fade as merchants and banks ran into greater difficulties, and US participation in the west coast economies, especially in resource extraction (mining and oil), grew. Although some major British multinational firms did invest in industry in Peru and Chile following the Second World War, little British business remained in the region after the 1970s.

The Twenties and the Thirties

Between 1921 and 1929, there were no depressions, but prosperity was accompanied by substantial unemployment, especially for farm laborers and blue-collar workers. Unions were weak and business influence strong. Income inequalities widened. The late ’20s saw an explosive combination: unregulated stock markets and mass underconsumption. The ’20s boom led to the Great Depression. Herbert Hoover’s neo-laissez-faire response failed, but it cleared the decks. President Franklin Roosevelt and other New Dealers acted to expand government functions to aid those in distress and to jump-start economic growth. The CCC, the CWA, the WPA, and the PWA are each evaluated for wage levels, job creation, and treatment of women and African Americans. Economic recovery added millions of jobs, but unemployment stayed high until World War II.