This paper argues that the Big Four accountancy firms—PricewaterhouseCoopers, Deloitte, Ernst & Young, KPMG—operate as key political allies of the financial sector within financial regulatory battles. Leveraging the theoretical notion of “actor plurality” within the policymaking process, I demonstrate how, in the case of the European Union Financial Transaction Tax (FTT) initiative, accountancy professionals offered crucial support for the financial sector. They did so by disseminating key oppositional claims against the FTT proposal, developing tax mitigation and relocation strategies, preparing negative impact assessments, and advising on lobbying tactics. This allied stance of the Big Four is primarily a consequence of the ways in which their commercial priorities have been fundamentally transformed by the provision of consultancy services within the modern global economy. Moreover, the paper shows how accountancy experts are deeply embedded within a network of professional relationships that fosters substantive policy alignment between the Big Four and prominent financial lobbying groups. By highlighting the overlooked role of the major accountancy firms within post crisis regulatory reform, the study illuminates the unequal power relations that permeate financialized societies and contributes to a deeper understanding of how financial preferences continue to prevail within the policymaking process.

Drawing on data collected in interviews with investors and corporates in the United States and Europe, this paper sheds light on the motives behind shareholder engagement. It explains why index funds engage in corporate governance, despite their apparent lack of financial incentive to do so. Applying Hirschman's concepts of exit and loyalty to the investment management industry, this paper suggests that for many institutional shareholders today, voice is more feasible than exit. For the largest index investors, the cost of engagement has fallen to a level where it is today negligible. The immense concentration amongst index funds, with the three largest fund managers controlling over 90 percent of assets, ensures sufficient return on their governance investments. Furthermore, interviews with activist investors suggest that they have learned to work with index investors and that index funds do not present barriers to successful campaigns. This paper therefore advocates against restricting index funds’ voting rights. Doing so would muzzle those shareholders with the deepest pockets and the greatest potential for corporate oversight. Instead what is needed is regulation to ensure greater disclosure of engagement efforts by the largest fund companies enabling greater academic and public oversight of asset managers’ engagement activities.

Close ties between government authorities and private firms are often the object of suspicion, but a systematic understanding of when they arise is still missing. This article uses machine learning tools to analyze a large dataset of public contracts from across Europe, in order to identify the conditions under which close connections, defined both in terms of repeated interaction, as well as geographical dispersion, appear. Previous theoretical results suggest that close ties should emerge as an enforcement mechanism in settings characterized by weak outside enforcement, such as those involving corruption. Results from random forest models show support for this hypothesis, along with identifying other structural determinants of the outcome. The most striking finding is that even after accounting for numerous potential confounders, major differences in terms of average diversity levels between countries persist, and these differences map onto an indicator of governance quality and corruption, but not at all on income per capita. These findings point to the centrality of the structure of interactions between private and public actors for understanding governance outcomes.

This paper strives to shed light on the interaction between business groups and the main governing parties after the onset of the economic crisis through a “thick narrative” approach. By focusing on the Portuguese case, the study aims to examine the preferences of the employer confederations during the distinct phases of the economic crisis and to analyze the political alignments established with different party governments. This contribution confirms the fragmentation of business interests on the one hand and tensions between the right-wing government and the main employer confederations on the other. While a pragmatic approach to party politics seems to be the predominant trend, historical and institutional legacies are still important factors when considering the actions and inner tensions of these organizations.

This paper examines the relationship between economic specialization and government expenditures. We hypothesize that citizens and firms in economically specialized regions pressure politicians to invest in core economic sectors in lieu of spending on public goods that benefit the broader economy, such as education. We investigate our hypothesis through an examination of the United States and India. We confirm a negative relationship between economically specialized U.S. states and education spending, and a positive relationship between economically specialized U.S. states and firm subsidies. Next, we examine the effects of an immediate shock in a region's level of economic specialization by comparing Indian states created from federal bifurcation. We show how the creation of two highly specialized states (Bihar and Jharkhand) from a diversified state (Undivided Bihar) was associated with a decline in education spending but an increase in subsidies for core sectors.