WOLL Cornelia

The subject of this thesis is The Political Economy of Technical Market Access: The Case of TAFTA. It is structured in two main parts. Comprising Chapters One through Three, Part One illustrates the importance and contradictions of technical market access in contemporary international trade. Chapter One traces the emergence of the concept of deep integration from the perspective of economic theory and trade policy, and analyzes it as a contemporary extension of free trade. Chapter Two illustrates the special place of technical infrastructure in the context of deep integration: Technical standards and regulations have become a central topic as they condition access to foreign markets and as such contain considerable potential for increasing trade flows, while at the same time constituting an institutionalized pre-market arena in which private and public actors, often located at different spatial scales, compete to secure competitive advantages. Chapter three proposes three theoretical approaches to understanding the formation of an international technical infrastructure. Part Two analyzes attempts to form a transatlantic technical infrastructure (between the European Union and the United States) since 1990. Chapter four traces the history of repeated failures of this project between 1990 and 2012 and highlights the contradiction between a shared desire for liberalization and disagreement over the form of this liberalization. Chapter Five offers an empirical analysis of the technical negotiations under the Transatlantic Trade and Investment Partnership (TAFTA). It shows that each party attempted to extend its own technical infrastructure, and the inherent competitive advantages, across the Atlantic, making compromise impossible.

Scholars consider that transnationalization processes segment political authority and erode the capacity to govern territories at the national and metropolitan levels. By analyzing the implementation of four infrastructure projects in London and New York City in the transportation and environmental sectors, we seek to demonstrate the relevance of collective action in metropolitan territories. This work demonstrates that globalization opens up opportunities of a structural nature for metropolitan authorities to reassert their political authority within the territory and introduces the possibility of governance by non-sovereign authorities. He argues that infrastructure provision is a terrain for power struggles between sovereign authorities, non-sovereign authorities, and large corporations, where the winner gains budgetary and financing capacities, which legitimize its authority in political spheres. The case studies illustrate that skilled metropolitan policy actors use the legitimacy of their services to formulate policies and create an enabling environment for the partnership between the public sphere and infrastructure financing experts, thereby acquiring the budgetary and financial capacity necessary for infrastructure projects. In conclusion, this work argues that public infrastructure provision today requires the participation of both state and local actors to create the investment conditions for forging meaningful relationships with large companies and investors who share responsibilities, risks and benefits.

The debate on the abolition of the École nationale d'administration is all the more lively because it is situated at the convergence of several issues: the principles of meritocracy, social ascension, the functioning of the public administration, networks of influence and professional rents provided by the large bodies. Other models exist among our neighbors. A comparison with Germany sheds light on the role that the university can play in the training of the senior civil service. [First paragraph].

1st lines: Every project needs financing. Whether we are talking about the State, companies or households, their financing can be done by equity or by borrowing. If in the past, loans were in the hands of private creditors or large banks, today it is the financial markets that provide a large part of it. Bringing together a multitude of players in a globally connected system, financial markets have become the nervous system of our economies. Like a network of information on the viability of projects, it transmits data from one end of the planet to the other, without worrying about the impact of financial flows on daily life. Moreover, the system can seize up and become subject to irrational and speculative behavior, while bringing considerable profits to the actors at the heart of the financial sector. In the eyes of the public, finance has an unflattering image, as revealed by the 2008 financial crisis. Building on this image, François Hollande declared during his presidential campaign in his speech at Le Bourget on January 22, 2012 that his "real adversary [...] is the world of finance." Does the financial sector escape political control? What do we know about the dynamics and balance of power between the financial industry and politics? Ten years after the 2008 financial crisis and the 2010 eurozone sovereign debt crisis, how can we assess the governance of the financial sector and its impact on our societies?

First lines: The biases that private interests can introduce into politics have always been a key concern for democratic theory. Lobbying in particular has come into the focus of social science research since the beginning of the twentieth century.1 After a century of study, there is a general consensus that the freedom of political participation creates an unequal landscape: corporate actors find it much easier to promote their interests than do more fragmented or less well-endowed groups, especially those speaking on behalf of public interests. Ever since the publication of Mancur Olson’s The Logic of Collective Ac­tion, exceptions only seem to prove the rule that perfect pluralist representation of all societal stakeholders is simply un­attainable.2 What is more, it is easy to attribute the rise in economic inequalities to unequal political representation, and more specifically to consider excessive lobbying as the main cause of biased politics.

Tax cooperation seems to be more difficult to achieve through multilateralism than any other economic issue, despite growing consensus about the detrimental effects of corporate tax competition for both market integration and economic inequalities. Repeated attempts to harmonize corporate taxation have gained momentum since the financial crisis, with important proposals made by the OECD and the European Union. Yet failure to implement or even reach agreement on these proposals shows the need for leadership of the G7 in order to address the concerns of those countries that stand to lose most from corporate tax harmonization.

This research takes as its subject the Banking Union, the main reform of the European Union's institutions sought by the heads of state and government in response to the 2008 financial crisis. In particular, the reform entrusts the European Central Bank with the task of supervising the banks of the Eurozone as of November 2014. At the crossroads of a sociology of finance in discussion with a sociology of science and technology, and a political sociology attentive to instruments of public action, the thesis proposes to analyze the new supervisory practices as a problem of government in the sense of Michel Foucault. It describes the Banking Union as an institutional arrangement, i.e. an assembly of actors, verification practices and control mechanisms, within which a new form of intervention is invented. This arrangement produces a European expertise centralized on a territory of government. In this territory, the problematization of the proper conduct of institutions aims to guarantee the long-term future of investors' assets, without acting in a dirigiste manner on financial flows. The supervisory authorities of the states taking part in the arrangement are in charge of relaying the decisions collectively taken in Frankfurt to their banks, which are considered national. The thesis contributes to contemporary academic debates on finance and the construction of Europe, by making visible through investigation the effects of a public action focused on the problem of investment management in Europe. In particular, it allows us to grasp the recomposition of state sovereignty in the area of banking policy, which, far from disappearing, plays a decisive role in the constitution of the territory studied. The developments are based on a qualitative survey, including an ethnography of the Autorité de contrôle prudentiel et de résolution (ACPR), an interview campaign and a documentary analysis.

First Paragraph: How did we get to the massive public intervention in many countries during the banking crisis that started in 2008? When looking at the decisions and eventual costs of the bail-outs, the question on many people’s mind is: Why does finance have so much power? One of the most dramatic cases in this context is Ireland, where the direct costs of state intervention in the Irish banking sector are estimated at around €64 billion (41 per cent of GDP) according to the Irish House of the Oireachtas. As we all know, this had led to the sovereign bail-out by the IMF and the EU in 2010. The burden of this is carried by the Irish population, through taxes, pay cuts, the bankruptcy of Irish businesses and rising unemployment.

The development of powerful airlines with clear support from political actors who have (re)launched their activities poses important challenges for the international airline industry. Indeed, many political entities perceive air transport as an indispensable tool for promoting their interests and gaining a stronger foothold on the international scene. The cases of the emirates of Dubai, Abu Dhabi and Qatar, as well as Turkey, provide a good illustration of how political actors use the development of a locally based airline to further their own objectives. The unprecedented growth of Emirates Airline, Etihad Airways, Qatar Airways and Turkish Airlines, however, is shaking up the evolution of global air connectivity, while the many players in the airline industry are struggling to agree on a global framework to ensure "fair competition" between carriers, against a backdrop of competing interests. The control of connectivity is indeed a soft power tool that strengthens the position of the actors that use it, while at the same time creating increasing links of (inter)dependence. However, political authorities are adopting different approaches in order to develop their soft power, while the European Union is, for the time being, not involved in this dynamic.

The financial crisis revealed the vulnerability of states with financialized economies, but also the extraordinary measures they had recourse to in order to reign in market forces. This chapter argues that this paradox is based on another contradiction: the ambiguity of government–finance relations. While financial institutions are considered to be the culprits of the recent crisis, they were also necessary to support government action and enable a quick recovery. Undoing the ties between banks and states is thus not only a response to conflicts of interests. Uncoupling banks from states through European financial integration also contains risks for future crisis management.

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1st lines: It is a privilege to be read and discussed by such insightful scholars, several of which have made important contributions to our understanding of industrygovernment relations and financial regulation in recent history. Their reading of my own analysis has given me a much sharper sense of my argument. Indeed, I agree with many of their comments, including some of the critical ones, and believe our discussion contributes positively to the still on-going political analysis of the recent global crisis. The reviews all thoroughly engage with the political analysis and the empirical discussion of the bank bailout schemes presented in the book. Their main thrust differs, however, and it is helpful to organize my response by grouping them according to the focus of their criticism. This allows me to clarify three subjects in my rejoinder to the following discussion: the nature of power, the use of the chicken-game metaphor and the role of healthy banks in different countries.

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The thesis examines the configurations of actors and organizations involved in the regulation of access to the drug market in France and England, in charge of the scientific and administrative control of the pricing and reimbursement of these products. This activity became autonomous from the clinical assessment of their quality, efficacy and safety (dominating the regulation of their approval on the market) during the 1980s.

First lines: In order to respond to the insightful and detailed discussion, I find it helpful to group the authors according to the most relevant issues they have identified. First, I will return to the notion of power in business-government relations, which Wilmarth and Barnes discuss at length and which Reinke finds problematic. Second, I will clarify the use of the game-theoretical framing, which has certain heuristic limitations. It does, however, address the governments’ strategy, contrary to the criticism of Reinke and Jensen. Third, I dive into the empirical study to address other factors that help to explain bailout arrangements. I show why I disagree firmly with Jensen, who believes that healthy banks alone are sufficient to analyze the six cases, suggesting that my argument is over-determined. I do concede, however, that additional elements help to provide a richer analysis, in particular the institutional and legal settings highlighted by Moutot and Thiemann.

The purpose of the study is to question the capture of regulation by concentrated financial interests in the debates over what to do after the credit crisis that originated in the United States in 2008. Policymakers in the United States and the European Union have undertaken ambitious reform efforts to better protect consumers of financial services. Debates in the U.S. Congress and the European Parliament concluded with important decisions on credit regulation. The debates were highly politicized and involved intense lobbying by financial and civil society interest groups, which would normally have been considered much weaker than their opponents. Paradoxically, a civil society coalition of modest means succeeded in convincing decision-makers of the need for change and in thwarting the efforts of the financial lobby to prevent it. Why did weak and peripheral actors prevail over rich and powerful ones?

First lines: In order to respond to the insightful and detailed discussion, I find it helpful to group the authors according to the most relevant issues they have identified. First, I will return to the notion of power in business-government relations, which Wilmarth and Barnes discuss at length and which Reinke finds problematic. Second, I will clarify the use of the game-theoretical framing, which has certain heuristic limitations. It does, however, address the governments’ strategy, contrary to the criticism of Reinke and Jensen. Third, I dive into the empirical study to address other factors that help to explain bailout arrangements. I show why I disagree firmly with Jensen, who believes that healthy banks alone are sufficient to analyze the six cases, suggesting that my argument is over-determined. I do concede, however, that additional elements help to provide a richer analysis, in particular the institutional and legal settings highlighted by Moutot and Thiemann.

The chapter shows how European internal market regulation expanded and was transformed from a limited and often non-binding set of policies to an integrated and wide-ranging framework. Incremental but profound change was possible because critical junctures, in particular judgments by the European Court of Justice, allowed the European Commission and its allies to advance new policy proposals with new default positions. This affected the preferences of major member states, created new coalitions, and also led to the emergence of new actors. Feedback loops reinforced the orientation of previous agreements and created changes that most observers would have qualified as impossible three or four decades earlier.

In recent debates about inequality, many have pointed to the predominant position of the finance. This article highlights that structural power, not lobbying resources, are key to explaining variations across countries. It examines finance-government negotiations over national bank rescue schemes during the recent financial crisis. Given the structural power of finance, the variation in bank bailouts across countries cannot be explained by lobbying differences. Instead of observing organized interest intermediation, we can see that disorganization was crucial for the financial industry to get off the hook and let the government carry the burden of stabilizing the economy. Put differently, structural power is strongest when finance remains collectively inactive. In contrast to traditional accounts of the lobbying influence of finance, the comparison highlights that the lack of organization can have crucial redistributive consequences.

The rise in inequality has been explained with reference to organized groups and the lobbying of the financial sector. This article argues that the image of politics as orga­nized combat is contradicted by empirical evidence on lobbying in the United States, and does not travel well to Europe. The power of finance does not operate through organized political influence. Rather, politics in the interest of capital unfolds as a struc­tural feature of advanced economies over time. Tellingly, at the height of the financial crisis, one of the most promising strategies of institutions seeking government support was not organizing for combat, but collective inaction. Our challenge, then, is to explain how the power of finance has built up and is playing out in creating inequality. A more structural, less agency-focused perspective highlights how the rise of finance has been supported by actors that few would accuse of being finance-friendly, such as the Eu­ropean center-left parties and consumers. Reconceptualizing the power of finance has important implications for political solutions to rising inequality.

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How much leeway did governments have in designing bank bailouts and deciding on the height of intervention during the 2007-2009 financial crisis? By analyzing the variety of bailouts in Europe and North America, we will show that the strategies governments use to cope with the instability of financial markets does not depend on economic conditions alone. Rather, they take root in the institutional and political setting of each country and vary in particular according to the different types of business-government relations banks were able to entertain with public decision makers. Still, crony capitalism accounts overstate the role of bank lobbying. With four case studies of the Irish, Danish, British, and French bank bailout, we show that countries with close one-on-one relationships between policy makers and bank management tended to develop unbalanced bailout packages, while countries where banks negotiated collectively developed solutions with a greater burden-sharing from private institutions.

There is much to commend in Hacker and Pierson‘s (2011) analysis of a growing bias in US politics in favor of the wealthiest parts of society. However, the image of "politics as organized combat" draws our attention into the wrong direction. There is increasing evidence that organized groups are less pivotal in US politics than is generally assumed. Moreover, the insights on group politics do not travel well to Europe, where we find fundamentally different forms of political organization. Explaining rising inequalities in Europe requires understanding the structural features of finance capitalism rather than just political interactions.

The financial industry is commonly described as one of the most influential in politics. The numbers certainly support this impression. In terms of lobbying expenditures in the United States, the banking sector outspent even the health care sector. Few industries have comparable resources available and have been able to establish such a strong institutional presence. In many countries, top bankers and high-ranking public officials meet frequently. revolving doors between the two worlds are common. and the technical complexity of financial regulation makes consultation with the industry at all levels of decision-making a necessity. Accordingly, commentators in the media and academia warn about conflicts of interest and undue influence. [First paragraph].

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Bank bailouts in the aftermath of the collapse of Lehman Brothers and the onset of the Great Recession brought into sharp relief the power that the global financial sector holds over national politics, and provoked widespread public outrage. In The Power of Inaction, Cornelia Woll details the varying relationships between financial institutions and national governments by comparing national bank rescue schemes in the United States and Europe. Woll starts with a broad overview of bank bailouts in more than twenty countries. Using extensive interviews conducted with bankers, lawmakers, and other key players, she then examines three pairs of countries where similar outcomes might be expected: the United States and United Kingdom, France and Germany, Ireland and Denmark. She finds, however, substantial variation within these pairs. In some cases the financial sector is intimately involved in the design of bailout packages. elsewhere it chooses to remain at arm’s length. Such differences are often ascribed to one of two conditions: either the state is strong and can impose terms, or the state is weak and corrupted by industry lobbying. Woll presents a third option, where the inaction of the financial sector critically shapes the design of bailout packages in favor of the industry. She demonstrates that financial institutions were most powerful in those settings where they could avoid a joint response and force national policymakers to deal with banks on a piecemeal basis. The power to remain collectively inactive, she argues, has had important consequences for bailout arrangements and ultimately affected how the public and private sectors have shared the cost burden of these massive policy decisions.

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Comparing bank rescue schemes in France and Germany during the banking crisis of 2008-9, this article argues that collective inaction is a little-studied aspect in the exercise of power in business-government relations. Contrary to studies that focus on lobbying, structural power or the influence of beliefs, the comparison highlights that governments depend on contributions from the financial industry during crisis management. In the negotiations to design bank support schemes, some countries, such as France, succeeded in engaging their financial sector collectively. Such public-private burden-sharing arrangements alleviate the public budget and increase mutual surveillance between banks during government support. In other countries, such as Germany, a collectively organized industry response failed, which forced the government to design an entirely public support scheme. The German government reacted to this perceived imbalance by imposing tighter banking regulation to avoid a repetition of the impotence it experienced in 2008.

First paragraph: The move towards global history is now commonplace in history departments across the world. For scholars of international political economy, it is easy to understand the importance of transcending national boundaries in order to account for the evolution of social and economic relations across centuries. The thematic rather than regional focus of world history helps to reveal dynamics across civilizations that intricately link their evolutions, sometimes even in the absence of political decisions. Commercial relations fall in this category and a series of excellent historical studies examine economic development, social, technological and scientific evolution by focusing on specific commodities such as salt or oil. Cotton by Giorgio Riello, Professor of Global History at the University of Warwick, is an impressive work in this tradition.

First paragraph: One of the motivations for establishing a European banking union was the desire to break the ties between national regulators and domestic financial institutions in order to prevent regulatory capture. The centralization of supervisory authority under the auspices of the European Central Bank aims to prevent conflicts of interest that can exist between national authorities and financial institutions operating in global markets. In particular, critics have pointed at regulatory leniency towards national champions, the protection and promotion of domestic regulatory standards at the disadvantage of foreign competitors or implicit encouragement to hold domestic sovereign bonds. One of the most glaring lessons of the recent crisis seems to be that elite failure – both on the side of the public authorities and the private sector – was the result of complacency, misjudgment and sometimes even outright manipulation that could have been avoided if supervision and regulation happened at a greater distance. By centralizing these functions at the European level, financial institutions will no longer be able to play their domestic advantage, or rely to the same extent on much criticized sources of proximity with regulators such as schooling and education, rotating doors or joint golf excursions.

Karl Marx observed long ago that all economic struggles invite moral struggles, or masquerade as such. The reverse may be true as well: deep moral-political conflicts may be waged through the manipulation of economic resources. Using the recent financial and Eurozone crises as empirical backgrounds, the four papers gathered here propose four different perspectives on the play of moral judgments in the economy, and call for broader and more systematic scholarly engagement with this issue. Focusing on executive compensation, bank bailouts, and the sovereign debt crisis, the symposium builds on a roundtable discussion held at the opening of the Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo) in Paris on November 29, 2012.

This chapter examines business lobbying at the WTO. It argues that the role of companies in multilateral trade is tightly linked to the evolution of the trading system, with the most decisive influence during the creation of the WTO institutions. In an initial phase, business lobbying concentrated on tariff barriers. As the GATT expanded its scope during the Uruguay Round, large US companies became very active participants and crucially shaped the agenda, in particular with respect to service trade and intellectual property rights. In other areas, however, active lobbying was less effective, most notably investment protection and textiles. With the establishment of the WTO, lobbying has begun to partially shift to the supranational level. Some relationships exist between the WTO secretariat and companies, but the most important new pillar of political activity relates to dispute settlement. At the same time, the WTO secretariat tries to reach out to a more diverse set of stakeholders. In many ways, the influence of global companies on WTO affairs is much more indirect today than it was during its creation.

How much leeway did governments have in designing bank bailouts and deciding on the height of intervention during the 2007-2009 financial crisis? By analyzing the variety of bailouts in Europe and North America, we will show that the strategies governments use to cope with the instability of financial markets does not depend on economic conditions alone. Rather, they take root in the institutional and political setting of each country and vary in particular according to the different types of business–government relations banks were able to entertain with public decision makers. Still, “crony capitalism” accounts overstate the role of bank lobbying. With four case studies of the Irish, Danish, British, and French bank bailout, we show that countries with close one-on-one relationships between policy makers and bank management tended to develop unbalanced bailout packages, while countries where banks negotiated collectively developed solutions with a greater burden-sharing from private institutions.

An anniversary issue provides an inescapably inviting opportunity to reflect on the past, evaluate the present, and contemplate the future. Eschewing the self-congratulatory rhetoric of traditional anniversary celebrations, we have devoted this 20th anniversary issue of RIPE to contributions that critically examine the academic discipline of international political economy, focusing on our collective challenges and limitations as much as on our achievements. As every author knows, it is the thoughtful, constructive, and above all critical review that ultimately pushes us to produce better scholarly work. The global financial crisis mandates such a reassessment, as did the fall of communism that birthed this journal. [First paragraph].

The virulent European Union hedge fund debate led many observers to suspect a paradigmatic battle between liberal market economies and countries in favour of tighter regulation. By contrast, this article points to the economic interests that drove government agendas. However, national preferences were not defined by the aggregate of a country's economic interests, but by very specific stakeholders only, despite the existence of opponents with considerable resources. This article argues that the unequal success of financial lobbyists depended on how their demands fitted into the government's overarching negotiation strategy. The primacy of government objectives, in turn, resulted from the high saliency of financial regulation and hedge funds in particular.

Karl Marx observed long ago that all economic struggles invite moral struggles, or masquerade as such. The reverse may be true, too: deep moral–political conflicts may be waged through the manipulation of economic resources and the design of policy devices. Using the recent financial and Eurozone crises as empirical backgrounds, the short papers presented here by Philippe Steiner, Cornelia Woll, Wolfgang Streeck and Marion Fourcade propose four different perspectives on the play of moral judgments in the economy and call for a broader and more systematic scholarly engagement with this issue. Focusing on executive compensation, bank bailouts and the sovereign debt crisis, the discussion forum builds on a roundtable discussion held at the opening of the Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo) in Paris on November 29, 2012.

In the aftermath of the worst global financial crisis since the 1930s, several governments under the umbrella of the G20 agreed to reform the international financial system. The regulation of financial markets was extended to new territories. However, if the crisis is a condition for change, it does not show the extent or the sequence of events that explain this shift in public policy. The question then arises: what are the elements that can explain this shift in international financial regulation? This paper demonstrates that domestic policy in the United States and major European Union countries directly influenced this policy shift. Focusing on OTC derivatives markets, this research will demonstrate that the extension of financial regulation to new markets is the product of increased public attention or "policy salience" in internationally influential countries. However, the unique historical trajectories that characterize these states inform us about the unique contours of these new regulations that are not written on a blank page. In particular, this research examines the evolution of financial regulation in the credit derivatives or "credit-default swaps" markets in the United States with the passage of the Dodd-Frank Act and in Europe with the passage of the European Market Infrastructure Regulation (EMIR). This argument and empirical study contribute to the study of the evolution of state preferences in international financial regulation.

Neo-liberalism has had one central message for the state: scale back, cut back, cut out, transform. This brings to mind Winston Churchill's reply to an opponent who asked, ‘How much is enough?’ to Churchill's repeated push to spend increasingly more on defence in the 1930s. Churchill's rejoinder came in the form of a story about a Brazilian banker with whom he had just had lunch. The banker had received a cable informing him of the death of his mother-in-law and asking for instructions. He cabled back: ‘embalm, cremate, bury at sea. leave nothing to chance’. This take on neo-liberalism – as burying the state – is certainly exaggerated because neo-liberalism comes in many different forms with many different policy applications. Only the recommendations of the most radical strands come close to the Brazilian banker's response to his mother-in-law's death. Yet the story as a metaphor for neo-liberal views of the state nonetheless somehow rings true. This is largely because neo-liberals have been more anti-state in their rhetoric than in their actions. The state has been neo-liberalism’s bête noire, as its main focus of attack, because neo-liberals – whatever their differences – have viewed the state as consistently doing too much in the wrong ways with the worst consequences not only for the markets but also for democracy, by endangering individual freedom through its interventions. As a provider of public goods, the state had to be scaled back to leave room for the market, which would assure more efficiency. However, the state has also been neo-liberalism’s greatest conquest, as its main locus of action, because it has been primarily through the state that neo-liberals have been able to realize their vision(s).

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An anniversary issue provides an inescapably inviting opportunity to reflect on the past, evaluate the present, and contemplate the future. Eschewing the self-congratulatory rhetoric of traditional anniversary celebrations, we have devoted this 20th anniversary issue of RIPE to contributions that critically examine the academic discipline of international political economy, focusing on our collective challenges and limitations as much as on our achievements. As every author knows, it is the thoughtful, constructive, and above all critical review that ultimately pushes us to produce better scholarly work. The global financial crisis mandates such a reassessment, as did the fall of communism that birthed this journal. [First paragraph.

The literature on international liberalization policy generally assumes that firms that are dominant in their domestic markets oppose opening up to foreign competitors. This should be particularly true for network service markets, which have traditionally been run by monopolies, often state-owned. But do dominant firms really oppose the liberalization of their domestic markets? This thesis examines the lobbying of dominant firms against the international liberalization of their sectors in the field of telecommunications and air transport services, focusing on two countries, the United States and the European Union. We show that these firms have in fact expressed support for liberalization, with the exception of U.S. airlines. In order to understand this support, we ask about the weight of four variables that may determine policy preferences: (1) economic incentives, (2) domestic regulatory traditions, (3) the international regime that governs the sector, and (4) the political process in which firms participate. We find that economic incentives play an important role, but we also highlight the effects of the political process on preference formation. In particular, we show that the EU's multi-tiered system encourages lobbying for liberalization while the U.S. process allows for more variable political demands.