Towards a Political Theory of the Firm
27 Pages Posted: 17 Jul 2017 Last revised: 19 Jun 2023
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Towards a Political Theory of the Firm
NBER Working Paper No. w23593
Number of pages: 27
Posted: 17 Jul 2017
Last Revised: 19 Jun 2023
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Towards a Political Theory of the Firm
CEPR Discussion Paper No. DP12158
Number of pages: 29
Posted: 25 Jul 2017
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2
Date Written: July 2017
Abstract
Neoclassical theory assumes that firms have no power of fiat any different from ordinary market contracting, thus a fortiori no power to influence the rules of the game. In the real world, firms have such power. I argue that the more firms have market power, the more they have both the ability and the need to gain political power. Thus, market concentration can easily lead to a “Medici vicious circle,” where money is used to get political power and political power is used to make money.
Suggested Citation: Suggested Citation
Zingales, Luigi, Towards a Political Theory of the Firm (July 2017). NBER Working Paper No. w23593, Available at SSRN: https://ssrn.com/abstract=3003731
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