How Do Business Interest Groups Deal with Political Constraints? a Case Study of Germany

This paper investigates how powerful business interest groups adapt to political constraints. Social scientists dealing with business and politics focus often on how business interest groups influence politics, but pay less attention to whether and how business interest groups adapt to political constraints. The paper distinguishes between two responses of business to political constraints: adaptation of goals to political constraints and non-adaptation. The paper proposes a typology of business responses to constraints that is based on the two dimensions of political constraints and adaptation. The typology consists of four ideal types: business-led political compromise, imposed political compromise, business dominance, and political confrontation. Examples from social policy and industrial relations reforms in Germany illustrate these four types. Substantively, the empirical analysis shows that business adapts to political constraints when the salience of a policy issue to business is low, but refuses to adapt if the salience of a policy issue is high, that is, when business perceives an issue to strike at the core of its interests. Thereby the paper shows how we can improve our understanding of the impact of business interest groups on political decisions by complementing a focus on influence with a focus on adaptation. (197 words)