Corrections and clarifications

In this section, we will post any corrections and clarifications relating to the 2012 Audit of Democracy. 

The clarifications and corrections below relate to the eighth paragraph under the ‘Financing elected representatives’ sub-heading in section 2.6.3 of the Audit and to Figure 2.6d which appears directly underneath that paragraph.

Following the publication of Owen Jones’ (2014) book, The Establishment: And how they get away with it (Allen Lane), attention has been drawn to figures from the 2012 Audit of UK democracy which Jones inadvertently misquoted. Jones has recognised this error, explaining that a percentage sign (%) was inadvertently omitted from the final version of the book, thereby giving the impression that 46 out of the top 50 publicly traded British firms had a parliamentarian as either a director or major shareholder, when the correct statistic should be 46% of the top 50. He has explained this error on his blog and undertaken to correct this oversight in online and future print editions of the book.

In subsequent discussion of the statistic in question, the author Jeremy Duns raised additional issues on his blog about the manner in which the 46% figures had been derived and presented in the Democratic Audit report. In light of Jeremy’s intervention, as well as subsequent correspondence between us, we would like to clarify a number of points about the statistic in question. These are as follows:

1. In the original Democratic Audit report, we sourced the statistic in question to a 2006 paper by Mara Faccio. This was the correct source, and appears in the list of references, correctly, as having been published in in the American Economic Review. However, the points at which we refer to Faccio (2006), a subscription-only article, in the main text are hyperlinked to an, earlier, open access version of the same paper from 2004. Our intentions in doing so were to be helpful to non-academic readers in enabling them to access a version of the source we used. We would like to clarify that there are two versions of Faccio’s paper. It is our understanding that the figures cited in both versions of Faccio’s paper are identical.

2. In the relevant paragraph of the 201 Audit which discusses Faccio’s findings, we use the terms ‘MPs’ and ‘parliamentarians’ interchangeably and refer to ‘MPs’ in the legend for the relevant graph presenting the UK in comparative international perspective. The use of ‘MP’ in this context is entirely consistent with the terminology used in Faccio’s account and dataset, where the term donates all parliamentarians in the countries studied. However, we recognise that such usage as a standard term risks causing confusion for UK readers given British conventions that ‘MPs’ refers specifically to elected members of the Commons. We would like to clarify this point and would ask readers to take account of the fact that the use of ‘MPs’ in this context refers to members of both the House of Commons and the House of Lords, just as the figures for other bicameral legislatures include both chambers (e.g. both the Bundestag and the Bundesrat in Germany). I regret that this point was not made clear in the original text.

3. While Faccio published the final version of her study in 2006, the data was collected for a period covering the early 2000s. It is common academic practice, particularly for large and complex comparative international datasets, for there to be a time-lag of several years between the period to which figures relate and the date at which research using such figures is published. However, we agree that it is valuable to specify that, at the time of publication, the figures in Faccio’s study were already several years old. We would therefore like to alert readers to the fact that the title of Figure 2.6d should ideally read ‘Corporate-parliamentary connections, UK in comparative perspective, early 2000s’.

4. For a minority of the countries in Faccio’s sample, there was an additional, much broader, category of political connections among firms. In our reworking of Faccio’s data, and in our discussion of it, we did not specify this point, and we refer only to connections through directorships and large shareholdings. The reason we did not add this detail was that Faccio did not include any data in this category of ‘other relationships’ in the case of the UK, nor in 18 of the 20 additional countries included in our groups of comparators. In the remaining 2 countries which appear in our comparator groups, France and Germany, a combined total of a maximum of 6 firms with political connections of this broad type may possibly be included in our calculations. However, it was not possible to know with any degree of certainty whether these 6 firms are included or excluded, because of the way in which Faccio’s data were presented. We are happy to add this caveat, although the difference it makes, or could make, in practice is entirely negligible. Should the figures for France and Germany be distorted in this way, the only effect would be to slightly widen the gap (by 0.7 of a percentage point) between the UK and the EU-15 average for the % top 50 firms connected to a parliamentarian or MP, and by 0.3 of a percentage point on the same indicator between the UK and the consensual democracies.

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Note: if you wish to draw our attention to anything that requires clarifying or correcting, please email democraticaudit@lse.ac.uk. Cover image credit: Daniel R. Blume, CC BY ND 2.0