Feedback Processes, Issue Salience, and the Political Dynamics of Capitalist Development: How Shareholders Gained Corporate Control Rights in Britain, Germany, and France

The paper argues that feedback effects help explain increasing acquiescence to the marketization of corporate control. In Britain since the 1950s, market-enabling takeover rules the subsequent dynamics of policy conflict by changing the preferences and resources of relevant groups. Several processes were at work. First, market proponents grew more numerous and developed increasing stakes. Second, potential challengers found it increasingly difficult to mobilise protest, because issue salience declined, and because market-enabling rules enhance the capacity of market forces to penalise those who attempt to contravene them. Third, increasing marketization weakened potential challengers' motivation to protest, because it left them with less to fight for, and because "constrain-thy-neighbor" incentives induce support for the territorial spread of marketization as a means of self-defence. Of course, market-restraining rules also have self-reinforcing effects, and these account for the late and incomplete marketization of corporate control in Germany and France. However, compared to market-enabling rules, market-restraining rules trigger stronger self-undermining effects. For example, the rewards for defection grow larger the longer cartel-like arrangments persist. By identifying and comparing these processes, the article advances research on endogenous change to help understand the political dynamics of capitalist development.