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The Importance of Local Businesses to Local Government

Updated: Mar 29

In national news, large corporations appear to hold significant sway. But in local politics, small businesses are paramount. 

In media coverage of national and international affairs, multinational corporations often appear predominant. However, in a recent survey conducted in collaboration with Dr. Sara Constantino and Dr. Junho Lee at Northeastern University, we asked local elected officials which interest groups they view as important when considering legislation.

The results revealed that the interests of local businesses far outweigh the importance of national and international businesses in your average local government. A majority (59%) of local elected officials agreed that local businesses were among the most important sources of influence in their decision-making.

This likely reflects the fact that the most reliable source of local jobs is—you guessed it—local businesses. According to the U.S. Small Business Association, a whopping two-thirds of new jobs are created by small businesses, making them a very valuable player in local economies. 

In contrast, national and international businesses were much less likely (15%) to factor into the decisions of local policymakers. Furthermore, local officials might see larger businesses as more difficult to deal with or having less potential for positive impact on their communities. After all, attracting a big business comes with many challenges, and may not be worth the trouble. 

Farming groups continue to play an important role in many local governments.

Behind the general category of “local businesses”, groups specifically representing farmers came in second (at 37% of respondents) in terms of their influence on local governments in America. This might surprise many, since now only 1.2% of the U.S labor force is directly employed in farming (USDA). However, the farming industry has a long legacy in American politics and it remains a crucial part of our food supply. Moreover, it’s important to keep in mind that many, many local governments represent very rural areas of America.  

All other non-business groups were ranked lower in terms of their influence. For example, smaller percentages of local officials cited environmental groups (26%), consumer rights groups (19%), or human rights groups (18%) as providing important influence in their legislative decisions. This reflects the paramount importance of local economic development—and ensuring a supply of jobs—over all else in most local politics. But it might also reflect the fact that such groups are more likely to focus their campaigns at the state and federal levels. 


In summary, our survey underscores the general importance of businesses to local governments, and the particular significance of local businesses. Whether this is a good or bad thing likely depends on the context. In a community desperate for jobs, this likely feels appropriate. But in other communities where nonfinancial woes feel more pressing—like pollution, walkability, or other quality-of-life concerns—perhaps this might provoke concern.  

Stay tuned for future surveys and analysis where we hope to dig further into interest group dynamics in local government!  

Survey Background 

The research underlying this brief was built on data from a national random sample of 506 elected policymakers from local governments (i.e., township, municipality, and county governments) with a population of 1,000 or more. The survey was developed in collaboration with Dr. Sara Constantino and Dr. Junho Lee at Northeastern University and was implemented by CivicPulse. 

Below is the question wording for the survey item that was used: 

When considering legislation, which of the following types of advocacy or interest groups are most important in your decision-making?  [multiple selection, order of categories randomized] 

  • Large businesses in energy, agriculture, forestry, mining, and transport sectors 

  • Large businesses in information technology, finance, and media sectors 

  • Groups representing small local businesses 

  • Labor unions or federations of unions 

  • Groups representing farmers (e.g., the American Farm Bureau Federation)  

  • Professional groups (e.g., the American Bar Association) 

  • Charities  

  • Churches and religious organizations  

  • Environmental groups (e.g., The Sierra Club)  

  • Human rights groups (e.g., American Civil Liberties Union) 

  • Consumer rights groups (e.g., Consumer Federation of America)  

  • Other  


Media Contact 

Nathan Lee, PhD 

Managing Director of CivicPulse 

(618) 319-3404 


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