Incorporating Legislative Effectiveness into Nonmarket Strategy: The Case of Financial Services Reform and the Great Recession

The field of nonmarket strategy has expanded rapidly over the past 20 years to provide theoretical and practical guidance for managers seeking to influence policymaking. Much of this scholarship has built directly on spatial and “pivotal politics” models of lawmaking. While extremely helpful at identifying crucial targets for lobbying, these models treat all policymakers as identical in their abilities to advance legislative agenda items through various policymaking hurdles. We build upon these earlier models, but include policymakers who vary in their relative effectiveness at advancing measures through the legislative process. We identify how the implications of our model deviate from those of conventional (pivotal politics) analyses. We then present an empirical strategy for identifying effective lawmakers in the United States Congress, and illustrate the utility of this approach for managers developing nonmarket strategies in legislative institutions, relying on the case of banking and financial services reforms between 2008 and 2011. 

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Craig Volden