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

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 posi...

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Bibliographic Details
Published in:Business and Politics 2000-11, Vol.2 (3), p.1-288
Main Authors: Doner, Richard F, Schneider, Ben Ross
Format: Article
Language:English
Subjects:
Business
Developing Countries
Economic Development
Professional Associations
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Summary: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.
ISSN:1469-3569
1369-5258
1469-3569
DOI:10.2202/1469-3569.1011