Corporate Influence and Political Corruption: Lessons from Stock Market Reactions to Political Events
In: The independent review: journal of political economy, Band 19, Heft 1, S. 19-36
ISSN: 1086-1653
Americans are deeply cynical about both corporations and politicians. For the past several decades, Gallup has conducted regular polls of public confidence in various social and political institutions, with big business and Congress consistently ranking at the bottom of the list. Not surprisingly then, corporate political spending and lobbying are viewed with suspicion, further fueled by exaggerated rhetoric from reform-minded pundits, advocacy groups, and demagogues. In previous work, the author has explored the contrast between popular perceptions of the role of money in politics and the lessons of political economics. In this essay, he reviews more recent empirical research on how financial markets respond to political events with the goal of better understanding the nature and extent of corporate influence in American politics. The public and media attention currently focused on campaign contributions, independent expenditures, and lobbying might better be devoted to exposing and monitoring personal connections between politicians and firms. Adapted from the source document.