Corporate Interests

Those ‘traditional Washington Politics‘ that Andrew mentioned in yesterday’s post refer to the way that in the US and UK, well organized and well funded corporate bodies can exert a great deal of influence on the government.

Companies can directly donate to a candidate and expect some sort of quid pro quo, or the influence can be less direct: Karthik Ramanna from Harvard Business School and Sugata Roychowdhury of MIT recently wrote a white paper that suggests that in the 2004 election, outsourcing firms located in political battlegrounds were underreporting their profits to deflect attention from their (likely profitable) outsourcing, so that candidates wouldn’t have to confront the issue.

 To get away from these sorts of direct and indirect influence, political and administrative boundaries need to be redesigned. Greater transparency of the interrelationship between politicians, advisors, civil servants, and interested stakeholders will help, as well accountability for political reward and patronage.