Business lobbying under salience: Financial industry mobilization against the European financial transaction tax

Abstract:

This article examines interest group conflicts surrounding the financial transaction tax (FTT) debate in the European Union (EU). Specifically, it focuses on the advocacy efforts of EU-based financial industry groups at different stages of the policy debate.

The article provides a detailed description of changes to the post-crisis regulatory environment and points to public salience as important factor that can constrain business power. Much in line with the existing literature, industry groups did not fare very well under conditions of high salience and public pressure during the agenda-setting stage.

However, this article also shows that in order to get back on its feet, the financial sector lobby had to employ a combination of quiet and noisy politics during later stages of the policy process. As soon as the contextual conditions provided by the financial crisis started to fade away, industry groups were able to bounce back by using a framing strategy that linked their arguments against an FTT to broader societal goals, by disseminating scientific evidence and by building coalitions with business groups outside of finance in order to water-down the proposed directive.