Business Ethics and Corporate Governance, Second Edition

COMPETITION AND POLITICAL GOVERNANCE

Political governance includes the regulatory environment and process. It involves policy making in the public interest. Monopolization, or lack of competition generally, can affect political governance and indirectly affect corporate governance. Examples of where political governance has greatly influenced competition include many instances where a few incumbent monopolies who accounted for a large share of markets and were not challenged by entry. Examples are galore in banking, insurance, and transport and communication sectors in India where state monopoly firms dominated the industrial scene for more than 40 years with little room for competition. During the pre-liberalization era, there was an abundance ...