Towards a Political Theory of the Firm

Luigi Zingales

No 12158, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Neoclassical theory assumes that firms have no power of fiat any different from ordinary market contracting, thus a fortiori no power to influence the rules of the game. In the real world, firms have such power. I argue that the more firms have market power, the more they have both the ability and the need to gain political power. Thus, market concentration can easily lead to a “Medici vicious circle, where money is used to get political power and political power is used to make money.

Keywords: Theory of the firm; Lobbying; Concentration (search for similar items in EconPapers)
JEL-codes: D21 G30 L20 (search for similar items in EconPapers)
Date: 2017-07
New Economics Papers: this item is included in nep-bec, nep-com, nep-hpe and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Journal Article: Towards a Political Theory of the Firm (2017)
Working Paper: Towards a Political Theory of the Firm (2017)
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