Few areas in the study of politics engage as many dimensions of political, economic, and social life as the multiple, overlapping, and sometimes conflicting relations between government and business. The frequent dependence of politicians and governments on businesses, large and small, for economic development, job creation, and political support has made the mobilization of this support a major element of democratic political life since the late-eighteenth and early-nineteenth centuries. The resulting networks of mutual obligation have prompted countermeasures by competing economic and social interests, often including significant business elements, to limit the power of economic elites and to redistribute political...

North American ideas of the business marketplace often exalt an ethos of rugged individualism in the building of private businesses and their survival in a world of intense competition and unforeseen changes in the business environment. While this vision may have an element of reality, particularly in more entrepreneurial sectors of the economy, it is only one part of the bigger picture.

Businesses—large, small, and in-between—depend on governments for more or less stable sets of rules that are necessary for them to carry on successfully. They frequently look to governments for protection against threats to their well-being or...

The purpose of economic policies—and of government intervention in the economic decisions of individuals, businesses, and other organizations in society—is to foster conditions that enhance the economic well-being of individual citizens and the broader society. Most economists agree that public policies are most effective in promoting increased prosperity by providing a stable but adaptable framework of rules that enable individuals, businesses, and other organizations (including those in the public sector) to pursue their economic well-being in ways that contribute, directly or indirectly, to the collective well-being of a particular society.

Economic policies that are successful in increasing overall...

One of the major controversies in the study of political economy in general, and that of business-government relations in particular, is the role of corporate power in shaping both specific government decisions and the broader context of public policy. The concept of corporate power is a disputed one that reflects competing ideas of democracy, the nature and role of class solidarity, and power in the process. These disputes are echoed in debates over the degree to which governments should exercise control over economic decision-making. Differing assessments of the capacity of governments, businesses, or citizens to exercise political or economic power...

The development of economic policies and the practice of business-government relations do not take place in a vacuum. They are shaped by political, economic, and social institutions that are the results of historical events and forces produced not only by the competition and interaction of interests through the political process but also by different ideas about the role of government, the nature of Canadian society, and the ways of identifying local, regional, sectoral, and class interests with a broader vision of the public interest.

The study of economic history can be useful in three ways. First, such study places the...

The political environment for economic policy-making and business-government relations has been transformed since the early 1970s as both domestic events and international trends have challenged many of the basic assumptions of government policies. During the 1970s and early 1980s, a series of political and economic shocks combined to destabilize the postwar Keynesian consensus and to undermine business liberalism as the dominant ideology of the state in fiscal and economic policies. These shocks contributed to intense competition and conflict among social and economic interests seeking to protect themselves against the potentially adverse effects of change. They also contributed to ideological debates...

Political ideas and theories may attempt to explain, justify, or challenge existing economic and social relationships. However, these relationships are heavily influenced by the political and legal institutions that provide the durable organizational structures and rules that organize and shape the political process and the workings of the economy. The study of institutional arrangements within both political science and political economy is increasingly important to policy-makers and governments attempting to increase the effectiveness of their policies, particularly when they are seeking to combine or balance particular economic and social objectives with the efficient and equitable workings of the market economy....

Economic structure is a term that describes the basic characteristics and divisions of economic activity within either a particular geographic area or an overall economic system or network. It is important to distinguish between the two because, while the authority of a government is typically exercised over a particular territory and its residents, very few economic systems that have developed beyond the primitive stages of barter are economically self-sufficient.

The structures and networks of business ownership and activity play a vital role both in the nature and levels of economic activity and in how these factors interact with the institutions...

Federalism and regionalism are dominant realities of Canadian political life. They have shaped the country’s development by structuring its governments and representative institutions to serve distinct geographic interests through the election of members of Parliament and provincial legislatures on the basis of local constituency boundaries. Canadian federalism divides political and legal responsibility for major elements of economic and social life between two senior orders of government, both of which have a significant effect on business operations and the social interests shaped by them.

Political debate in Canada revolves around regional issues and economic structures, which vary widely across the country....

The politics of economic policy—or of business-government relations—in Canada have never taken place in a cocoon isolated from or unrelated to international economic forces or political events. The interrelationship of national, regional,¹ and international economic structures varies with the degree to which particular industry sectors depend on foreign markets for goods and services produced in Canada (or vice versa), for access to improved technologies, or for the investment capital necessary to finance the development of domestic industries.

But more and more in recent years, the environment for Canadian businesses—and their relations with governments—are being influenced by...

Governments’ role in the economy is often complicated by their direct involvement in the marketplace as providers of goods and services through arm’s length agencies or through private providers subject to contractual or regulatory controls (see Chapter 3). The role of government business enterprises (GBEs)—often known in Canada as Crown corporations, Crown agencies, or public enterprises—has changed significantly in recent years with the maturing of the Canadian economy and changes in the political and management philosophies of many Canadian governments. These changes, variously described as “the new governance” or “new public management” (Salamon 2002; Kernaghan, Marson, and Borins...

This third part ofUneasy Partnershiplooks at how business, interest groups, and government actors compete with each other to influence the policy process. In so doing, it considers the internal and external processes for designing and implementing public policies. Some observers have likened the workings of these processes to those of a “political marketplace” in which various groups compete for influence, power, and a larger share of the outputs of government.

The marketplace analogy is more effective in some contexts and less effective in others. The spread of government has created a market for political benefits that is driven...

All governments face the challenge of balancing responsiveness to public opinion, the provision of coherent political leadership, and adaptability to the interests and concerns of particular economic and social interests. Although this balancing act is most visible at election time or during periods of minority government, it is a constant reality in the political marketplace.

In previous chapters, we have seen that Canada’s economy and society are characterized by high degrees of diversity and complexity, openness and dynamism, reinforced by a relatively high degree of social and economic individualism. They limit the capacity of governments or politicians to plan or...

Early policy studies described the workings of government as a “black box” into which various societal interests pour their demands and preferences, from which emerge government decisions, policies, programs, and other “outputs” in response (Easton 1965). Opening the black box to some degree of public scrutiny contributes to better public understanding of the pressures and trade-offs facing policy-makers and the contexts in which citizens and interest groups must function when attempting to make these processes more responsive.

Earlier chapters of this book examined the role of political and economic ideas on relations between government and business and their implications for...

Most policy-making in Canada takes place below the waterline of public visibility. However, at some point, public policies must past one or more tests of political legitimacy, including those of legality, effectiveness or performance legitimacy, and acceptance by significant elements of public opinion. Much of the art of democratic politics involves the evaluation, cultivation, and leadership of public opinion, often in a highly competitive environment.

The fragmentation of policy processes and of public opinion itself—by geographic region; by socio-economic interest or sector; and by elite, specialized, and mass publics—ensures that the attempts of most political actors to engage...

The political system contains a variety of checks and balances on the use and abuse of power. These checks include the federal division of powers and competition among interest groups for the recognition and accommodation of their rights and interests as part of a broader public interest or of the agendas of specific government agencies. Competition among political parties for the support of societal interests, the news media, and public opinion is often significant, particularly when an election approaches.

Another set of checks and balances involves different aspects of the legal system. Constitutional rules and conventions, interpreted, applied, and sometimes...

The relationship between business and political parties is a perennial source of controversy in Canadian politics. These controversies are caused partly by the ideological debates over the exercise of business influence and power discussed in Chapter 3, especially the link between large-scale financial contributions to political parties (or the ability to mobilize such contributions) and the visible pursuit of political influence by business and professional interests allied to the governing party. At another level, they relate to the fine line between patronage and corruption, particularly in the distribution of economic benefits by governments to individual businesses and professionals, and their...