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POLS 3470 Study Guide - Corporate Social Responsibility, Eastern Canada, Campaign Finance

Political Science
Course Code
POLS 3470
Tim Mau

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POLS 3470 – Week 1 Lecture
David Vogel reading
Reasons for interest in business-government relations
Power of business
Business is this powerful player, they are ultimate trying to compete for government attention
oBusiness holds a tremendous amount of power
oIt has the power to dominate all other areas of society
Increased business political activity
In the 1960’s the way business influenced the political world was hidden the the public
PAC – political action committees in the 1970’s changed that – they began to come out into the open
Campaign finance
Prior to the 1970’s there was little information about the amount of finance that the business world had
with the political world.
oWe began to see an increase in laws that made political parties announce where their funding was coming
Expansion of political agenda
Historically the state did not intervene in business that much
More recently we have seen an increase in mass regulation for businesses through the
Interest group representation
oExpansion of interest group representation during 1970’s
oAlso tried to influence and shape public policy, normally in a direction opposite of businesses
oThese groups were also trying to influence the political agenda – this made it an unstable process
Comparative political economy
oThere was a recognition of the importance of economic issues with respect to globalization and global
oGave renewed interest in the relationship between businesses and the state
oGave importance to global issues
oGlobalization is something that all governments are interested in, this now has an impact on the
regulations that government can make
Changing public expectations
This goes in part with the activism of the 1960”s they began to attack large companies – they wanted
corporate social responsibility.
Key themes
1. Need for historical analysis
a. Different needs of corporations need to be analyzed as there is no one overarching need of business
b. Needs of a business, or porotion of dominance in a particular time is not consistent in later time periods
i. We often talk about business and government, which makes it seem like all businesses have the
same issues with governments, that is not the case. There are several differences between
different businesses’ – you need to look at the policy and history of different businesses
2. Value of comparative research
i. It is important to compare between what we do in our county to what other countries to to
understand how business and government interact in different countries. – this helps us
3. Importance of interdisciplinary research

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i. Just because this is a political science course – we need to look at different research – from the
business world
American exceptionalism
There is something fundamentally different about the US from other countries.
The argument is that there has been an uneasy partnership between American businesses and the US government.
Less desire to see the state interfering with business operations
A sense of mistrust between corporations and govt representatives
Less cooperation between bus and govt in the us,
Mistrust between corporate and economic elites
Political and economic power is highly fragmented like Canada: we don’t have any peak associations or one
overarching association that speaks on behalf all of businesses.
American regulation is different in the way they are made or enforced are problematic
No other capitalist country is as solid about its laws and regulation’s with respect to securities regulation and hold
executives accountable for tings like fraud
The US is this typical model of a Laissez-faire capitalism ( less governmental control and interference.
Very strong adversarial relationship- there is tension between business and government – business doesn’t like
when the government interferes
This causes a dislike between the two.
This also pertains to business ethics- there are more laws and regulation’s that carry criminal penalties
Government support for business is limited – the government has no interest
One of the key changes in the US is the public interest movement
Business-government relations
“the entire gamut of interaction between business and government as it affects business strategy and/or
government policy” (taylor et al., 1999: 4)
both go hand in hand – not just the way govrn affects business
Operates in two key environments
Economic markets
Atomistic competition
The idealized state – firms can come or exit the marketplace at any time.
Pure monopoly
The opposite of the atomistic- you only have one supplier in a marketplace –they have
control over everything – no competitors can get into the marketplace without a struggle
Because you only have one suppler – there is no other alternative, you have to pay the
price they pay
A few key players – like rogers and bell – other examples : the banking industry , the
airline ,
Political markets ( often neglected)
Promote economic success
oControl economic behaviour Eastern Canada has had lower rates of gdp per capita as the
employment industry is tied to seasonal operations
oGovt in Canada tries to implement regulations and opportunities that would provide
employment within particular industries and stimulate economic growth.
Diagram by Peter Clancy -- look on courselink

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Importance of government for business
1. Stabilize the economic environment
2. Government expenditures
oIn recent years they have amounted to 13% - and has rose to 16% - that’s only at the federal level
3. Government taxation
oGovernments need to get the money from somewhere -
oUses fiscal policy such as govt taxation
oUse monetary policy by impacting cost of Canadian dollar to impact imports vs exports
4. Promotes export activities of firms
oWe have Canadians manufactures that produce goods for the local markets but they want to ideally
expand their products all over the world
oThe government provides favourable taxation, help set up fairs in order to help such businesses
5. Provides loans/loan guarantees
oThe state can provide loans, they can provide money cheaper then other business partners
oLoans – the assistance that was given to some automotive industries to get over the recession
oGuelph sports entertainment centre, private partner loan they were using was written off by the city of
Guelph as loan at the public level was more cost effective for the city
6. Crown corporations
oThe state has a role in the economic environment through crown crops
oAir Canada for example was a crown, even petro Canada was too – now they are mixed and privately
oState operates in the economic place through crown corps
7. Mixed enterprise
oWe don’t actually have any at the federal level – but an example would have been petro Canada before it
became completely privatized
oGovt may legally control the mixed enterprise or may own shares of the private corporation
8. Government regulation
9. Subsidize interest groups
oThese groups must be helped in the eyes of the govt
Framework for analyzing business-government relations (w.t. stanbury 1993 )
Broader Environment
Characteristics of the political system
oPolicy making in Canada is shaped by the prime minister
oStrong party discipline gives PM tremendous power
oPolicy formation takes place in the executive, public has little access
oDemocratic vs communist/socialist
oFederal vs unitary state
oWestminster parliamentary democracy
oConflict – does everyone get a long?
oThe possible tension between political parties
oThe availability of information
oDegree of political stability
Characteristics of Canadian social values
oSupport for Diversity
oCanada has a communal approach to social safety network (health care)
oWe are more caring and compassionate, tolerantof cultures
oBelieve in equality and fairness
oConsultation and dialogue exist (diff accords we’ve had, talks btw levels of govt)
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