Business Mobilization and Public Policy in the U.S. States*

Abstract

Objective. The goal of this study is to examine how the political mobilization of business interests influences aggregate public policy outputs in the states. We examine the relationship between business mobilization and general state policy liberalism, as well as policy that we term state “business policy climate.”Methods. We construct a measure of the “business policy climate” from a number of tax and regulatory indicators in the states and examine whether business influences it and policy liberalism using ordinary least squares regression.Results. The analysis shows that business mobilization does not influence general policy liberalism but is a significant influence on a state's business policy climate. Specifically, the dominance of a state's campaign finance system by business interests makes policy more favorable toward business.Conclusions. The extent of business mobilization in a state is an important influence on public policy outputs but is constrained by the activities of other political actors such as unions.