Blackwell Reference Online

Extract

There is a vast literature about the relationship between government and business in advanced capitalist societies. Central here are three questions: Why does government promulgate the business related policies that it does? How does government affect business? How are government–business relations organized? Sociologists and political scientists have long debated why governments make business policy as they do. Some assert that governments make policy because members of the business community capture, dominate, or otherwise influence the policy‐making process. Others maintain that policy‐making reflects a more balanced set of influences, including business, labor, consumers, environmentalists, and voters. Still others argue that policy is a more autonomous response by government officials to market failures, business cycles, and other macroeconomic phenomena. These debates have provoked intense theoretical disagreement as well as an enormous amount of empirical work (e.g., Martin 1991 ; Vogel 1989 ). Regardless of who influences government, government always influences business – even in the most laissez‐faire situations ( Fligstein, 2001 ). First, governments provide and allocate resources to business through subsidies, infrastructure investment, and procurement, which create incentives for firms to engage in many kinds of behavior. Second, governments establish property ... log in or subscribe to read full text