A Culture of Favoritism: Corporate Privilege and Beliefs About Markets and Government

Abstract

This paper discusses a national survey of business leaders that sought to determine how government favoritism toward particular firms correlates with attitudes about government, the market, and selectively favorable economic policy. Findings indicate that those individuals who believe they work for favored firms are more likely to approve of free markets in the abstract but also more likely to say the US market is currently too free. These individuals are more skeptical of competition and more inclined to approve of government intervention in markets. They also are more likely to approve of government favoritism and to believe that favoritism is compatible with a free market. Those who have direct experience with economic favoritism or are more attuned to such favoritism are more likely to have distorted perceptions of free-market capitalism and are more comfortable with further favoritism.

Keywords: favoritism, culture, corporate welfare, privilege, rent-seeking, cronyism, crony capitalism

JEL Classification: D, D72, H, H81, M14