Political Legitimacy

Political legitimacy concerns the foundation of authority and the obligations of government and organizational leaders. Consent of the governed or managed exists in accordance with the degree of legitimacy that operates between the leadership and the led, which shifts in relation to events, perceptions, and preferences.

In a political context, legitimate government requires its citizens to limit direct democracy and transfer authority to the representative model. In a theocracy, political leaders look to a deity as the source of legitimacy. In hereditary monarchy, a legitimate king or queen is a person with a certain parentage.

International business complicates political legitimacy when cross-border activities raise questions in relation to who should govern such activities when sovereignty is contested. The onset of globalization through the flow of trade, money, and people means that business activities often transcend traditional political borders.

The feature that shapes and determines the possibilities and outcomes associated with political legitimacy is power, a series of implicit and explicit interventions made with the ability to enhance or detract from the legitimate political process. Power operates in a political system through coercion, compulsion, and participation, each of which undermines or strengthens legitimacy.

Business activities in the form of lobbying may damage political legitimacy because they may be perceived to employ unfairly money or gifts as bargaining tools. Lobbying is a technique used to influence the outcomes of political decisions, particularly in the area of regulation and compliance, that may have an impact on costs and profits in a range of industries, sectors, and markets.

Wider institutions such as religious bodies have an impact on political legitimacy. For example, the Catholic Church urges believers to question the legitimacy of institutions that undermine canonic moral principles or the natural law. Various faiths have views on consumerism, interest, profit, and speculation that may shape the policies relating to behavior, introducing codes and practices that may hinder business investment. The influence of culture and society on political legitimacy should not be ignored.

In the world of international relations, the operation of political legitimacy is further complicated by the absence of a formal world government. The structure of the international order is legitimated under certain conditions. The fault lines of legitimacy primarily relate to concerns expressed by interested parties regarding the legitimate status of a state, its related agencies, and the documentation of that legitimacy. International business works alongside the international community at various levels through organizations such as the United Nations, the International Monetary Fund, the World Bank, and the World Trade Organization. The degree to which these organizations are perceived by some stakeholders to prioritize the interests of developed market institutions negatively affects their perceived political legitimacy, particularly in developed countries.

Therefore, political legitimacy depends on the relationship between the authority of leaders and the consent of those led, and the uneven power relations between them, which is further complicated by the presence of money where there is economic inequality.