What Determines the Structural Power of Business? City Mayors and Their Concern for Growth

Policymakers have to consider that any policy against business interests, like increasing taxes, may impede investment, employment and may ultimately diminish their chances of re-election. Business thus enjoys structural power (opposed to the instrumental power like lobbying), and it operates mostly automatically in the head of policymakers. But of course, business interests do not always prevail in politics. Thus, it is an ongoing debate about which factors explain variations in business’ policy victories and the degree of business’ structural power. In this paper, we study the determinants of structural business power at the local level.  Mayors and municipalities are particularly exposed to the constraints of structural power because firms can easily move from one city to another when they dislike local policy decisions. Using surveys of city mayors in 31 countries, we analyze which factors explain mayors’ consideration of business and their perceived constraints by business’ structural power.