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Adaptive governance,status quo bias,and political competition: Why the sharing economy is welcome in some cities but not in others
Institution:1. Catedrático de Economía Financiera y Contabilidad, Universidad de Huelva, Facultad de Ciencias Empresariales, Plaza de La Merced 11, 21002 Huelva, Spain;2. Universidad Pablo de Olavide, Faculty of Business, Department of Financial Economics and Accounting, Ctra. de Utrera, 1, 41013 Seville, Spain;1. Information Systems Group, Business School, University of Colorado Denver, United States;2. Department of Management, Amrita Vishwa Vidyapeetham, Bangalore 560035, Karnataka, India;3. Department of Information Systems Decision Sciences, Muma College of Business, University of South Florida, FL, United States;4. Department of ISCS, COB, University of Texas at San Antonio, TX, United States;1. Center for Technology in Government, SUNY Albany, 187 Wolf Rd., Suite 301, Albany, NY 12205, United States;2. Institute of Public Administration, Information Technology Sector, P O Box 205, Riyadh 11141, Saudi Arabia;1. School of Computing and Information Technology, Faculty of Engineering and Information Sciences, University of Wollongong, Wollongong, NSW 2522, Australia;2. Department of Public Administration, The University of Texas at San Antonio, 501 W. César E. Chávez Boulevard, San Antonio, TX 78207-4415, USA;1. School of Computing and Information Technology, Faculty of Engineering and Information Sciences, University of Wollongong, Australia;2. Department of Public Administration, College of Public Policy, The University of Texas at San Antonio, United States
Abstract:Examining the variation in policies across 47 U.S. cities, we show that political competition has a significant effect on governments' regulatory responses to the sharing economy. Specifically, a greater level of political competition is associated with a more favorable regulatory response for sharing companies such as Airbnb. This finding is explained using the concepts of governmental status quo bias and adaptive governance. When considering the interests of the public and market incumbents, governments generally favor the latter (i.e., the status quo). This is because single-industry economic interests can more easily be organized into interest groups that can influence policymaking through lobbying. However, a greater level of political competition was found to reduce the power of entrenched market incumbents. This finding provides broad support to the hypothesis that the promotion of political accountability through greater political competition is conducive to adaptive governance.
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