Renon, Eva; (2021) Bringing the Firm Back in the Analysis: State-Business Relations in Latin America and their Impact on Policies. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

The political science literature is now unable to account for the differences in the business community behaviour towards Latin American governments. This thesis offers to fill this gap by answering three questions: what explains the differences between firms’ varying degrees of success and failure in communicating their policy preferences to politicians? What determines the type of policies the business community promotes through lobbying and other political influence mechanisms? What determines business' varying degrees of success and failure in influencing policy outcomes? Answering these questions is essential to understand how political systems respond to powerful private actors and is a condition to the success of political efforts to create a quality jobs led growth. This thesis’ theory answers these questions by developing a typology of the business community’s ability to communicate its preferences to politicians: cartelism, competitive-corporatism, and pluralism. This typology explains the type of interest companies promote and how efficient they are in influencing policies. Conglomerates and large firms (CLFs) lead effective collective action if the benefit of collective action seems high enough, regardless to its cost. Small and medium-sized enterprises (SMEs) organise in business associations if the cost of collective action is low enough, regardless to its benefit. The combination of these two factors shapes the business community’s mode of organisation. If CLFs and SMEs communicate their preferences clearly to politicians, they compete for influence over policies and coordinate ahead of lobbying. In this coordination process, all firms make concessions on their preferred policies to draft more collectively beneficial policy proposals (competitive-corporatism). If only CLFs organise well, they can efficiently promote their own narrow interests, unchallenged (cartelism). When the business community is widely disorganised, the best politically-connected interests prevail (pluralism). Confronted to extensive empirics, this typology better explains trade policy, regulations and fiscal policy in Argentina, Brazil and Colombia.

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