Business and shaping the business of government

History not having ended, somewhere out there is a perfect equilibrium of state-business-civic relationships and roles, catalysing and manifesting an ideal form of sustainable, inclusive development.

Over dinners here in Oxford I envy science-nerd friends whose research seeks (and often finds) pathways, combinations, formulas to unlock or unblock cells or substances in ways that might dramatically improve life and health. Policy and political economy hold less tangible rewards. I console myself by saying that perhaps we policy folk have a similar vocation: finding judicious and productive formulas of governance and collaboration, to unblock whatever constrains, corrupts or conspires against better social, regulatory and growth models: ideal cooperative forms mapped to suit the unique DNA of particular societies, sectors or supply-chains. 

This week's post reflects on aspects of the just-published special report on 'Companies and the State' in The Economist of 22 February.

First, the lead article states that relations between business and government are becoming "increasingly antagonistic". That may be true in richer OECD countries (on which the report focuses). However, in contrast to any trend of antagonism, arguably in development policy circles and among leading multinationals there exists increasing pragmatism, mutual outreach and cooperation in pursuit of shared objectives (see for example this previous post).

Yet there is a long way to go in convincing policymakers and executives of the propriety and utility, respectively, of looking for appropriate, productive ways to harness the private sector's strengths in pursuit of greater public goods. This post on the lack of meat to back up recent rhetoric on cooperating with business makes the point, as does last week's post on policymakers' mindsets towards a business role in public health provision. In this sense, the Economist is right to conclude its report by saying that governments and business alike "should acknowledge the fact that they are partners not enemies".

Second, the report dwells on shortcomings of taxation strategies. In poorer countries, development policy will increasingly focus on taxation issues both in terms of financing development (governments) and as a strategy to foster more responsive government (donors). See here.

Third, the report calls (as that newspaper is wont to do) for less complex and convoluted regulation in order to stimulate productivity. This post argued that in stimulating business' capacity for virtue on social, enviro and governance issues in settings with low-capacity regulators, regulation that is based on broad principles rather than detailed codes may be preferable.  

Finally, the report considers the sometimes pervasive influence on government of corporate or sector lobbying. In many mid-income or developing settings, the same imbalances exist: parts of the business community either have too much access to government or too little. One challenge in feeling the way towards the ideal sustainable development equilibrium is to institutionalise effective, inclusive, responsive feedback loops between the public and private sectors, so that 'lobbying' is not a dirty word but a transparent, regulated part of the business of governing.

This is surely because in the social science of responsible business and responsive government, the microscope reveals that from cellular to system-level, the vital, fragile, organic and mysterious substance is trust: see here.

Jo

The Economist report is here.