• Approx. 1/3 of world trade is intra-firm trade – between branches of MNCs in different countries • The size of MNCs means they have greater global influence than many countries

1. Dr Geoffrey Clements
Chairman, Commonwealth Infrastructure Partners
2019
Business, Government and Society
Business in Politics

2. Business in Politics
The business of politics and the politics of
business
• In all capitalist economies, a reciprocal relationship exists between
politics and business
• As a result there is a reciprocal influence of business on government
and government on business
• Sometimes this is positive, constructive
• Sometimes not
• Relationships also exist between government and business in other
form of government
o Including socialist, communist and totalitarian regimes

3. Business in Politics
The global spread of the influence of business
on politics and government
• As corporations have become larger, their influence has spread
• The number of MNCs has grown
• Their individual size has grown

4. Business in Politics
Some facts
• The 500 largest companies ranked by revenues beat performance records in 2017
• With combined revenues of $30 trillion, up from $27.7 trillion in 2016
• And profits soaring to $1.9 trillion from $1.5 trillion the year before.
• The 500 top companies reached a combined all-time high profit of $1.88 trillion, a
23% year-on-year increase.
• Approx. 1/3 of world trade is intra-firm trade – between branches of MNCs in
different countries
• The size of MNCs means they have greater global influence than many countries

5. Business in Politics
Richest companies in the world in 2017
• Walmart – $485.9 billion revenue
• State Grid Corporation of China – $315.2 billion revenue
• Sinopec Group – $267.5 billion revenue
• China National Petroleum Corporation – $262.6 billion revenue
• Volkswagen – $240.3 billion revenue
• Royal Dutch Shell – $240 billion revenue
• Berkshire Hathway – $223.7 billion revenue
• Apple Inc. – $215.6 billion revenue
• Exxon Mobil – $205 billion revenue

6. Business in Politics

7. Business in Politics
MNCs and National GDP
The largest MNCs have a larger “economy” than the GDP of all but the 20
largest national economies
Apple
> Saudi Arabia
Google
> Turkey
Microsoft
> Taiwan
Amazon
> Poland
Facebook
> Belgium

8. Business in Politics
Structure of government
• The structure of government can have a large effect on the
influence of business on government
• Instability in government allows large companies to exert an
influence
• Lobbying and donations to political parties also play their part

9. Business in Politics
Head of State and Head of Government
USA
The Head of State is also Head of Government
India
The Head of State is separate from the Head of Government:
Head of State is the President, and the Head of Government is
the Prime Minister
UK
The Head of State is separate from the Head of Government:
Head of State is the Monarch, and the Head of Government is
Prime Minister

10. Business in Politics
Gridlock in government in USA
• The majority in either House
may be the opposite party to
the President
• This can lead to “gridlock”,
especially when the House of
Representatives opposes the
President.
President /
Cabinet
Senate
House of
Representatives
Executive
Legislature

11. Business in Politics
Donating to political parties
an investment in the
future of the company

12. Business in Politics
The Revolving Door
Government regulators Industry executives

13. Business in Politics
Disproportionate influence
• Large corporates in USA have disproportionate influence on
government
• USA has disproportionate influence globally
• USA corporates have disproportionate global influence on
governments and world economics

14. Business in Politics
© 2019, Commonwealth Infrastructure Partners
Thank you
geoffrey.clements@commip.org
www.commip.org