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Business Associations and Economic Development: Why Some Associations Contribute More Than Others

Published online by Cambridge University Press:  20 January 2017

Richard F. Doner  and
Ben Ross Schneider
Richard F. Doner*
Affiliation:
Department of Political Science, Emory University
Ben Ross Schneider*
Affiliation:
Department of Political Science, Northwestern University
*
Department of Political Science, Emory University, Atlanta, GA30322; E-mail: rdoner@emory.edu
Department of Political Science, Northwestern University, Evanston, IL 60208–1006; E-mail: brs@northwestern.edu
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Abstract

Most current theoretical treatments view business associations as rent-seeking, special interest groups. Yet, empirical research in a wide range of developing countries reveals a broad range of functions and activities undertaken by business associations, many of which promote efficiency. These positive functions address crucial development issues (emphasized in the New Institutional Economics) such as strengthening property rights, facilitating vertical and horizontal coordination, reducing information costs, and upgrading worker training. The associations that engage in these developmental activities tend to be well organized and staffed. This institutional strength depends in turn on high member density, valuable selective benefits (often delegated by governments), and effective internal mediation of member interests. In addition external factors, especially competitive markets and government pressure, encourage associations to use their institutional strength for productive ends.

Type
Research Article
Information
Business and Politics , Volume 2 , Issue 3 , November 2000 , pp. 261 - 288
Copyright
Copyright © V.K. Aggarwal 2000 and published under exclusive license to Cambridge University Press 

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