BUSINESS, GOVERNMENT AND PUBLIC POLICY
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LEB
380.34,
Fall
2007
Professor: David Spence
M,W 12:30-2pm, GSB 3.106
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Course
Description: This course: (1) traces the relationship
between business and government throughout the policy process, from the policy
formation stage (legislative and interest group politics) through the policy
implementation stage (bureaucratic policymaking, and rule enforcement by
agencies and courts); and (2) examines the legal and constitutional constraints
that affect businesses across different political/legal regimes (e.g., the
political/legal risk environment). The
course takes a cross-disciplinary and (geographically) comparative approach to
the study of these issues. It is
cross-disciplinary in that it examines business-government relations from the
economic, political, legal, and behavioral perspectives. It is comparative in that it looks beyond
the U.S. political/regulatory/legal system to the larger universe
of business-government relations within industrialized democracies. The course will also examine ethical issues
associated with business’ role in the policy process, such as (i) the role of political contributions and bribes in the
policy formation process, and (ii) analysis of business’ compliance (or
noncompliance) decisions, and the forces that drive those decisions (e.g., law
as deterrent, law as guide -- or impediment -- to social responsibility, other
sources of social responsibility, etc.)
Readings: Baron, Business and Its Environment (5th
Ed.), and web-based readings. Optional
additional readings (see below) are just that, optional. They are provided for your interest.
Grading: There are no
exams in this class.
- Class participation (10%):
Students can maximize this component of their grades by (1)
preparing for class, by doing the readings and thinking about the issues
raised by the readings before coming to class, (2) participating in
general class discussions and otherwise being engaged in class, and (3)
preparing for and participating in in-class exercises. I will post discussion questions on the
syllabus prior to each class to give students a preview of the issues we
will be discussing. Because there
are no exams in this class, I will also call on students during class
discussions as a way of encouraging students to do the readings in
advance.
- Short memos (25% each): Each
student will prepare two short (5 page, single spaced, exclusive of
figures and charts) briefing memos on the business-government relations
problems faced by the company of their choice. In the first memo, students will
analyze a current public policy issue before the government (the
legislature or bureaucracy) in which their company is interested, and will
offer advice to the company about how best to exert influence over that
policy decision. In the second
memo, students will choose an established policy or legal rule and offer
the company advice about how best to address the problem of complying with
that policy or rule, and avoiding/addressing government enforcement
actions, lawsuits, or investigations directed against it. Students are free to select companies
who do business anywhere in the world, provided however that you can be
matched with 1-2 other students who are working with a firm in the same
industry (for purposes of the in-class presentation, explained
below). Students are also free to
focus on policy problems and issues involving any governmental body at any
level of government (from state or local to international), so long as the
analysis otherwise remains within the scope of the assignment. Students should consult with me about
proposed topics if they are unsure whether their topic fits the assignment. Due dates for these two memos are specified
on the class calendar below.
Presentations and Company
Assignments:
Industry
assignments can be found by clicking on this link.
For
information on policy developments affecting your industry and company, you can
start by checking the trade association web site for you industry, or (for
regulatory policies) the regulatory agency web site (e.g., www.fcc.gov for the pharmaceutical
industry). For U.S. legislative developments, you might start with the
Congressional Quarterly Weekly Report, available in the PCL, or the Thomas online legislative tracking
system. Similar resources are available
for European Union policies via the “Europa Server.”
The
class roster (with emails) can be downloaded by right clicking on this link.
- Presentation (20%): Each
student will prepare one in-class briefing (as part of a team of
2-3 students). The in-class
presentation will have a time limit of 20 minutes, and will address
the issues raised in either the first or second briefing memo. I recommend using powerpoint
or other visual aids in the presentations, which are designed to acquaint
the class with specific business-government relations problems faced by
real firms. Students will present
with one or two other students working on firms in the same industry. These in-class briefings will occur on
the dates specified in the class calendar below.
- CSR case (20%): During the last section
of the course, students will prepare a 2-3 page write-up on any one of the
three corporate social responsibility cases found at the end of chapter
22. (More on this assignment
later.)
Miscellaneous:
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Use of laptops,
cell phones or other electronic communication devices is not permitted in
class. If there is an important
learning-based reason why you need to use a laptop, please see me individually
to discuss it.
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With the
exception of the in-class presentation, all the graded assignments for this
course are individual assignments. All
students are expected to abide by the business school’s honor code, to do all
of their own individual work individually (without help from others), and not
to plagiarize written work. Cheating or
plagiarism will be grounds for dismissal from the class.
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This class will
adhere to the McCombs Professionalism Policy
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DATE
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TOPIC
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ASSIGNED READINGS
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OPTIONAL READINGS
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8/29
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Introduction to Course
Powerpoint
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9/3
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No class – Labor Day
holiday
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9/5
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I.
Introduction to the Nonmarket Environment of
Business
A. Generally
DISCUSSION:
- What
do you think Baron means by “the nonmarket
environment” of business? Which
institutions are part of that environment?
- How
would you describe the relationship between business firms and
governments? How do they
influence one another? Does your
answer depend upon the government (U.S.? Other?), the level of government
(national? Local?), or the organ
of government in question?
- How
would you describe the relationship between business firms and the
law? How do they influence one
another?
- What
other relationships affect these business-government and business-law
relationships? How so?
Powerpoint
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Baron, Chps.
1 & 2.
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9/10-12
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B.
Guest
speaker
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9/10: Chris Meakin (handout
readings)
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9/12: No Class
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9/17
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II.
Businesses & Policymaking
- Why Regulate?
DISCUSSION:
- What provokes government to regulate
business? What sorts of
situations tend to invite regulation?
- Is all regulation based upon some sort of
market failure? Why or why not?
- Be sure you understand the prisoner’s dilemma
game. If you were to play the
game 10 times in a row (choosing to cooperate or defect each time), how
would you try to maximize your total score?
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Why Regulate:
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9/19
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B.
Constitutional
Limits of Regulation
1.
Property
rights
2.
Federalism
DISCUSSION:
- How might a government’s authority to
regulate be limited by its constitution?
What are some common limits?
- How do Constitutional protections of property
rights encourage investment? How
does their absence discourage investment?
- Can nations legally expropriate private
property? Can the U.S. government do so?
- How can firms investing overseas mitigate
this kind of legal/political risk?
- How does EU law protect firms from
protectionist legislation by member states? Why do they do this?
Powerpoint
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Property Rights:
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Lucas v. South
Carolina Coastal Council (USSC, 1992)(browse)
Political Risk:
Federalism (read one):
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European Court
of Justice, Commission
v. Kingdom of Spain
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City
of Philadelphia v. New Jersey (read majority and browse dissent)
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9/24
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- Political Institutions
1.
The
Legislative Process
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·
Baron, Chp. 5, pp. 144-157
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The National
Legislature Exercise – link
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NOTE: Read exercise
carefully before coming to class.
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9/26
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2. Lobbying
Powerpoint
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Baron, Chp. 7;
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Compare
legislatures elected using a first
past the post system with those using a party
list/proportional representation system.
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Lijphart
Election Archive: look up the
electoral systems of at least 4 countries with which your unfamiliar.
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10/1
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3. Statutes
and Delegation
DISCUSSION:
- What is the difference between
agency rulemaking and agency adjudication? When do agencies use
one policymaking technique rather than the other?
- How can business firms
influence the decisions agencies make using these techniques?
- What other avenues of
influence over the bureaucracy might business firms use? Should
interest group participation in these decision processes be strictly
monitored and controlled? Why or why not?
Powerpoint
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·
Baron, Chp. 5, pp. 157-64; Chp. 10,
pp. 338-41.
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In-class
statutory interpretation problem: Dynegy
and the meaning of the Federal Power Act
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Informal Processes:
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10/3
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4. Money and Campaign Finance
- What
are the primary direct and indirect ways in which business firms can
influence the legislative process?
Does your answer depend upon whether the legislature is a
parliamentary system or not? Does
it depend upon the electoral systerm?
- How
can firms influence the policy choices of regulatory and administrative
agencies?
- What
rules govern campaign finance in the U.S.? Other nations?
- Where
is the line between campaign contributions, regulatory fees, and
bribes?
- Be
prepared to discuss the internet taxation case in the readings.
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·
Baron, Chp. 8
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