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Research project

Economic interests, business power and policy responses to the Covid19 crisis: insights from the Italian case

A key challenge facing policymakers in the formulation of public policy responses to the Covid19 crisis has been how to balance the tension between two competing principles and guiding objectives of governmental activity: on the one hand, the preservation and safeguarding of public health, and on the other, the preservation of economic and business activity to safeguard economic growth and prevent an excessive decline in output. One of the main issue areas where the opposition of these two principles in public policy formulation has played out most evidently is the question of timing and extensiveness of restrictions on economic and productive activity during the lockdown. Which economic sectors should remain operational during the acute phase of the pandemic, and under what conditions? And how fast and extensive should the easing of these restrictions be, once the most acute phase of the pandemic crisis is over?

Political tensions over these questions have been at the center of public policy and political debates in several countries. The ongoing controversies on the timing and conditions of re-openings of business and commercial activities during the ‘phase 2’ of the pandemic management in Italy, and the unfolding conflict between the UK government, unions and business groups on the UK government’s ‘return to work’ plans provide illustrative examples in this respect. A key aspect of this debate concerns specifically the role that (organized) economic interests have played in shaping public policy responses to the pandemic, with particular regard to the timing, length, extensiveness and stringency of lockdown measures for economic and productive activities. Depending on the national context, European governments have alternatively been accused in media debates of having ‘capitulated’ to the pressures of powerful business groups when hesitating to implement fast and extensive restrictions on economic activity, or of being ‘in the pocket of trade unions’ when opting for longer or more extensive preventative measures restricting economic and production activity. This is a pressing challenge for policymakers and political systems, as lack of clarity and transparency about the role and influence that organized economic interests have played in shaping policy responses to the Covid19 pandemic can contribute to an escalation of political and social tensions among social groups, and foster a crisis of public trust arising from a perceived lack in transparency and input legitimacy of governmental activity.

The proposed research project aims to address this challenge by tackling the following broad research question: to what extent do economic interests influence the stringency and extensiveness of public policy responses to the Covid19 pandemic, and how? More specifically, the project will explore to what extent variation in the stringency of policy responses to the Covid19 pandemic across different jurisdictions can be explained in light of the political strength and economic relevance of different economic interest groups; and how local economic conditions and the instrumental and structural power of business groups and unions interact with political and epidemiological considerations in shaping responses to a public health challenge such as Covid19. The key hypothesis that we seek to test is that the stringency of public policy responses restricting economic activity is influenced by the structural and instrumental power that business groups in key economic sectors are able to exercise. We propose a mixed-method research design (see section II) which explores this question both through advanced quantitative statistical methods and qualitative interview methods, using Italy as an illustrative and crucial case study.

Shedding light on these questions has great relevance and potential use for policymakers. Indeed, ascertaining the impact of economic interests and lobby groups on the crafting of policy responses to the Covid19 pandemic helps to illuminate and make legible the forces at work in shaping government policy responses, and in this way contribute to give greater (input) legitimacy to governmental decisions, as well as to introduce greater transparency in political debates over the role of business in politics.

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