The Rt Hon. David Laws MP. Click pic for credit
There was an interesting review of a study around politically connected firms on the BBC’s Thinking Allowed programme recently asking how far different countries find their governance effected by the relationships politicians have with previous (or current!) employers.
The early coalition-casualty, David Laws – for example – is a former Vice President of JP Morgan and Alan Duncan used to work for Royal Dutch Shell.
The programme quotes a recent article from Mara Faccio, a US-based Italian economist whose work on politically-connected firms (lots of links from her homepage here) is, in part, er…. inspired … by a desire to understand Silvio Berlusconi’s grip on the Italian state.
Unsurprisingly, there’s a direct correlation between press freedom and low levels of corruption. In the UK, 150 firms have connections to MPs – the highest level of interpenetration anywhere in the world. It’s quite a surprising statistic initially, but in the UK, politicians are offered opportunities to join boards rather than the other way around – where businesses put their people into politics (the strong contrast with Italy). As a result, the benefits to the firms were, according to Faccio, negligible.
It does put all of the recent expenses scandal into perspective though, doesn’t it?
Listen to the whole thing though if you can?
