Public Failure, Private Ordering: Successful Self-Regulation of Corporate Political Spending

Corporate political spending has become an integral aspect of business strategy in the 21st century, shaping regulatory landscapes, influencing public policy, impacting corporate reputations, posing heightened risk, and exposing companies to quid pro quo exchanges.

Companies engage in political spending to advocate for policies favorable to their operations, create a favorable business environment, mitigate regulatory risks, and align legislative and policy outcomes with their business interests. For some, political spending is simply and brazenly the purchase of access to Capitol Hill. However, as corporate political expenditures have grown in scale and complexity, so too have concerns regarding their ethical implications, transparency, legality, corruption, and potential for undue influence over democratic institutions. The intersection of corporate influence and politics raises critical questions about governance, accountability, and risk management—questions that are increasingly relevant as corporations face the threat of intimidation and operate in highly polarized political environments, with little positive law as guidance, and silent regulatory institutions. In recent years, routine failures of public regulation of corporate spending ushered in successful experiments in private ordering.