Business Government Relations: The Case of the International Coffee Agreement

Stephen D. Krasner

International Organization, 1973, vol. 27, issue 4, 495-516

Abstract: Relations between official agencies and private business concerning international coffee policy suggest that the power of the state dominates the international economic arena. The International Coffee Agreement did not benefit the United States coffee industry. Despite this, some large coffee roasting companies supported the Agreement. Without their support it would not have received Congressional approval. The action of the roasters can be explained by the behavioral theory of the firm, which emphasizes managerial discretion and risk avoidance. Large oligopolistic companies, potentially the most powerful of business enterprises, are also the ones least likely to oppose the state. However, the ability of one company to determine American policy toward the import of soluble coffee from Brazil shows that when the economic interests of an oligopolistic firm are unambiguously threatened, it can severely constrain official actors.

Date: 1973
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