Skip to main content Accessibility help

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

  • Richard F. Doner (a1) and Ben Ross Schneider (a2)


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.


Corresponding author

Department of Political Science, Emory University, Atlanta, GA30322; E-mail:
Department of Political Science, Northwestern University, Evanston, IL 60208–1006; E-mail:


Hide All
Acuña, Carlos. 1998. Political Struggle and Business Peak Associations. In Organized Business, Economic Change, and Democracy in Latin America, edited by Durand, Francisco and Silva, Eduardo. Miami: North-South Center Press.
Addis, Caren. 1993. Local Models: Auto Parts Firms and Industrialization in Brazil. Ph.D. dissertation, MIT.
Amsden, Alice. 1989. Asia's Next Giant. New York: Oxford University Press.
Bates, Robert. 1997. Open-Economy Politics. Princeton: Princeton University Press.
Biddle, Jesse and Milor, Vedat. 1997. Economic Governance in Turkey. In Business and the State in Developing Countries, edited by Maxfield, Sylvia and Ross Schneider, Ben. Ithaca: Cornell University Press.
Biggs, Tyler and Levy, Brian. 1991. Strategic Interventions and the Political Economy of Industrial Policy in Developing Countries. In Reforming Economic Systems in Developing Countries, edited by Perkins, Dwight and Roemer, Michael. Cambridge, MA: Harvard University Press.
Broz, J. Lawrence. 1999. Origins of the Federal Reserve System. International Organization 53(1): 3970.
Burki, Shahid and Perry, Guillermo. 1998. Beyond the Washington Consensus: Institutions Matter. Washington, DC: World Bank.
Campos, José and Root, Hilton. 1996. The Key to the Asian Miracle. Washington, DC: Brookings Institution.
Chang, Ha-Joon. 1994. The Political Economy of Industrial Policy. New York: St. Martin's Press.
Cheng, Lu-lin. 1996. Embedded Competitiveness: Taiwan's Shifting Role in International Footwear Sourcing Networks. Ph.D. dissertation, Duke University.
Cheng, Tun-jen. 1988. Business Interests Associations in Export Oriented Industrializing Economies. Paper presented at the meetings of the APSA, Washington, DC.
Clague, Christopher, ed. 1997. Institutions and Economic Development. Baltimore: Johns Hopkins University Press.
Coase, Ronald. 1988. The Firm, the Market, and the Law. Chicago: University of Chicago Press.
Derossi, Flavia. 1971. The Mexican Entrepreneur. Paris: Organization for Economic Co-operation and Development.
Derthick, Martha and Quirk, Paul. 1985. The Politics of Deregulation. Washington, DC: Brookings.
Doner, Richard F. and Laothamatas, Anek. 1994. The Political Economy of Structural Adjustment in Thailand. In Voting for Reform, edited by Haggard, Stephan and Webb, Steven. Oxford: Oxford University Press.
Doner, Richard F. and Hawes, Gary. 1995. The Political Economy of Growth in Southeast and Northeast Asia. In The Changing Political Economy of the Third World, edited by Dorraj, Manochehr. Boulder: Lynne Rienner.
Doner, Richard F. and Ramsay, Ansil. 1997. Competitive Clientelism and Economic Governance. In Business and the State in Developing Countries, edited by Maxfield, Sylvia and Ross Schneider, Ben. Ithaca: Cornell University Press.
Doner, Richard F. and Schneider, Ben. 2000. The New Institutional Economics, Business Associations and Development. Geneva: ILO/International Institute for Labor Studies, DP/110/2000.
Elder, Mark. 1997. Introduction: The Industrial Policy Paradox. Unpublished manuscript, Department of Government, Harvard University.
Emergent Components Industries and the Way Ahead. 1995. Motor Business Asia-Pacific (Economist Intelligence Unit). 4th quarter: 122131.
Evans, Peter. 1995. Embedded Autonomy. Princeton: Princeton University Press.
Fletcher, W. Miles. 1996. The Japan Spinners Association. Journal of Japanese Studies 22(1): 4975.
Freeman, Richard and Medoff, James. 1984. What do Unions Do? New York: Basic Books.
Frieden, Jeffry. 1991. Debt, Development, and Democracy. Princeton: Princeton University Press.
Haggard, Stephan. 1997. Democratic Institutions, Economic Policy, and Development. In Institutions and Economic Development, edited by Clague, Christopher. Baltimore: Johns Hopkins University Press.
Hewison, Kevin. 1989. Bankers and Bureaucrats: Capital and the Role of the State in Thailand. New Haven: Yale University Southeast Asian Studies.
Hollingsworth, J. Rogers and Boyer, Robert, eds. 1997. Contemporary Capitalism. New York: Cambridge University Press.
Hollingsworth, J. Rogers, Schmitter, Philippe and Streeck, Wolfgang. 1994. Governing Capitalist Economies. New York: Oxford University Press.
Jones, Leroy and Sakong, Il. 1980. Government, Business, and Entrepreneurship in Economic Development. Cambridge, MA: Harvard University Press.
Kaufman, Robert, Bazdresch, Carlos and Heredia, Blanca. 1994. Mexico. In Voting for Reform, edited by Haggard, Stephan and Webb, Steven. New York: Oxford University Press.
Kim, Eui-Young. 1993. The Development State and the Politics of Business Interest Associations: The Case of the Textile Industry in South Korea. Pacific Focus VIII(2): 3160.
Kingstone, Peter. 1999. Crafting Coalitions for Reform. University Park: Penn State University Press.
Knight, Jack. 1992. Institutions and Social Conflict. New York: Cambridge University Press.
Kuo, Cheng Tian. 1990. Economic Regimes and National Performance in the World Economy: Taiwan and the Philippines. Ph.D. dissertation, University of Chicago.
Kuo, Cheng Tian. 1995. Global Competitiveness and Industrial Growth in Taiwan and the Philippines. Pittsburgh: University of Pittsburgh Press.
Lall, Sanjaya. 1995. Industrial Adaptation and Technological Capabilities in Developing Countries. In Killick, T., ed., The Flexible Economy. London: Routledge.
Laothamatas, Anek. 1992. Business Associations and the New Political Economy of Thailand. Boulder: Westview Press.
Lim, Linda and Gosling, Peter, eds. 1983. The Chinese in Southeast Asia. Singapore: Maruzen Asia.
Lucas, Peter. 1993. State and Society in Nigeria: A Study of Business Associations in Kano. Ph.D. dissertation, Indiana University.
Lucas, Peter. 1997. The Politics of Business Associations in the Developing World. The Journal of Developing Areas 32 (Fall): 7196.
MacIntyre, Andrew. 1991. Business and Politics in Indonesia. Sydney: Allen & Unwin.
Manusavee, Monsakul. 2000. Policy Networks and Thai Industrial Policy During the Economic Crisis. M.A. thesis, University of Auckland.
Martin, Cathie Jo. 1997. Mandating Social Change: The Business Struggle over National Health Reform. Governance 10(4): 397428.
Maxfield, Sylvia and Ross Schneider, Ben, eds. 1997. Business and the State in Developing Countries. Ithaca: Cornell University Press.
McMillan, John and Woodruff, Christopher. 1999a. Dispute Prevention Without Courts in Vietnam. Journal of Law Economics and Organization 15(3): 637658.
McMillan, John and Woodruff, Christopher. 1999b. Interfirm Relationships and Informal Credit in Vietnam. Quarterly Journal of Economics (November). Vol. 114 no 4 Nov 1999, pp. 12851320.
Milor, Vedat, Biddle, Jesse, Ortega, Juan and Stone, Andrew. 1999. Consultative Mechanisms in Mexico. Washington D.C. World Bank.
Moore, Mick and Hamalai, Ladi. 1993. Economic Liberalization, Political Pluralism, and Business Association in Developing Countries. World Development 21(12): 18951912.
Moore, Pete. 1998. Doing Business with the State: Explaining Business Lobbying in the Arab World. Ph.D. dissertation, McGill University.
Moskowitz, Karl. 1984. Limited Partners: Transnational Alliances between Private Sector Organizations in the U.S.-Korean Trade Relationship. In From Patron to Partner. Lexington, MA: D.C. Heath.
Mytelka, Lynn. 1991. Technological Change and the Global Relocation of Production in Textiles and Clothing. Studies in Political Economy 36 (Fall): 109143.
Muñoz, Oscar, ed. 2000. El Estado y el sector privado. Santiago: Dolmen.
Nadvi, Khalid. 1999a. Collective Efficiency and Collective Failure. World Development. 27(9): 16151626.
Nadvi, Khalid. 1999b. Facing the New Competition: Business Associations in Developing Country Industrial Clusters. Geneva: ILO/International Institute for Labor Studies.’ No. 103.
Nadvi, Khalid and Schmitz, Hubert. 1994. Industrial Clusters in Less Developed Countries. Sussex: Institute of Development Studies Discussion Paper 339.
North, Douglass. 1990. Institutions, Institutional Change and Economic Performance. New York: Cambridge University Press.
Offe, Claus. 1981. The Attribution of Public Status to Interest Groups. In Organizing Interests in Western Europe, edited by Berger, Suzanne. Cambridge: Cambridge University Press.
Olson, Mancur. 1965. The Logic of Collective Action. Cambridge, MA: Harvard University Press.
Olson, Mancur. 1982. The Rise and Decline of Nations. New Haven: Yale University Press.
Olson, Mancur. 1993. Dictatorship, Democracy, and Development. American Political Science Review 87(3): 567576.
Olson, Mancur. 1997. The New Institutional Economics. In Institutions and Economic Development, edited by Clague, Christopher. Baltimore: Johns Hopkins University Press.
Pack, Howard and Westphal, Larry. 1986. Industrial Strategy and Technological Change. Journal of Development Economics 22: 87128.
Assakul, Pongsak. 1990. The Future of the Thai Textile Industry for National Stability. (In Thai.) Bangkok: National Defense College
Ramsay, Ansil. 1987. The Political Economy of Sugar in Thailand. Pacific Affairs 60(2): 248270.
Rabellotti, R. 1999. Recovery of a Mexican Cluster. World Development 27(9): 15711586.
Rasiah, Rajah. 1998. Politics, Institutions and Flexibility: Microelectronics Transnationals and Machine Tool Linkages in Malaysia. Forthcoming in Flexible Production in East Asia, edited by Deyo, Fredrick and Doner, Richard F.
Rhee, Yung Whee, Ross-Larson, Bruce and Pursell, Garry. 1984. Korea's Competitive Edge. Baltimore: Johns Hopkins University Press.
Rodrik, Dani. 1993. Taking Trade Seriously. Paper presented at the Conference on New Directions in Trade Theory, Ann Arbor, 29–30 October.
Rodrik, Dani. 1995. Getting Interventions Right. Economic Policy (April): 55107.
Rodrik, Dani. 2000. Development Strategies for the Next Century. Paper presented at the conference on ‘Developing Economies in the 21st Century,’ Institute for Developing Economies, Chiba, Japan, 2627 January.
Rogowski, Ronald. 1988. Structure, Growth, and Power. In Toward a Political Economy of Development, edited by Bates, Robert. Berkeley: University of California Press.
Sabel, Charles. 1994. Learning by Monitoring. In The Handbook of Economic Sociology, edited by Smelser, Neil and Swedberg, Richard. Princeton: Princeton University Press.
Saxonhouse, Gary. 1974. A Tale of Japanese Technological Diffusion in the Meiji Period. Journal of Economic History 1: 149165.
Schamis, Hector. 1999. Distributional Coalitions and the Politics of Economic Reform in Latin America. World Politics 51(2): 236269.
Schmitter, Philippe. 1992. The Consolidation of Democracy and the Representation of Social Groups. American Behavioral Scientist 35(4/5): 422449.
Schmitter, Philippe. 1994. Organized Interests and Democratic Consolidation in Southern Europe. In The Politics of Democratic Consolidation, edited by Gunther, Richard, Diamandouros, Nikiforos and Puhle, Hans-Jurgen. Baltimore: Johns Hopkins University Press.
Schmitter, Philippe and Streeck, Wolfgang. 1999 [1981]. The Organization of Business Interests: Studying the Associative Action of Business in Advanced Industrial Societies. Koln: Max-Planck-Institut fur Gesselschaftsforschung, MPlfG Discussion Paper 99/1.
Schmitz, Hubert. 1999. Global Competition and Local Cooperation: Success and Failure in the Sinos Valley, Brazil. World Development 27(9): 16271651.
Schneiberg, Marc and Rogers Hollingsworth, J. 1991. Can Transaction Cost Economics Explain Trade Associations? In Political Choice, edited by Czada, Roland and Windhoff-Heritier, Adrienne. Boulder: Westview.
Schneider, Ben Ross. 1997. Big Business and the Politics of Economic Reform: Confidence and Concertation in Brazil and Mexico. In Business and the State in Developing Countries, edited by Maxfield, Sylvia and Ross Schneider, Ben. Ithaca: Cornell University Press.
Schneider, Ben Ross. 1997–98. Organized Business Politics in Democratic Brazil. Journal of Interamerican Studies and World Affairs 39(4): 95127.
Schneider, Ben Ross. 2000. Business Politics and Regional Integration: The Advantages of Organization in NAFTA and MERCOSUR. Forthcoming in Regional Integration in the Americas, edited by Bulmer-Thomas, Victor.
Schneider, Ben Ross and Maxfield, Sylvia. 1997. Business, the State, and Economic Performance in Developing Countries. In Business and the State in Developing Countries, edited by Maxfield, Sylvia and Ross Schneider, Ben. Ithaca: Cornell University Press.
Shafer, D. Michael. 1994. Winners and Losers. Ithaca: Cornell University Press.
Silva, Eduardo. 1996. The State and Capital in Chile. Boulder: Westview.
Somporn, Thapanachai. 1998. Duty Removal Frees B20bn for Producers. Bangkok Post 8 October.
Soskice, David. 1999. Divergent Production Regimes: Coordinated and Uncoordinated Market Economies in the 1980s and 1990s. In Continuity and Change in Contemporary Capitalism, edited by Kitschelt, Herbert, Lange, Peter, Marks, Gary and Stephens, John. New York: Cambridge University Press.
Streeck, Wolfgang and Schmitter, Philippe. 1985. ‘Community, Market, State—And Associations? The Prospective Contribution of Interest Governance to Social Order’. In Streeck, and Schmitter, , eds., Private Interest Governance. London: Sage.
Taylor, Scott. 1998. Beyond Business As Usual: Business Associations, the State and Liberalization in Zimbabwe and Zambia. Ph.D. dissertation, Emory University.
Tendler, Judith. 1997. Good Government in the Tropics. Baltimore: Johns Hopkins University Press.
Tewari, M. 1990. Understanding the Organization of Work. Mimeo, MIT.
Thacker, Strom. 2000. Big Business, the State, and Free Trade: Constructing Coalitions in Mexico. New York: Cambridge University Press.
Thorp, Rosemary and Durand, Francisco. 1997. A Historical View of Business-State Relations: Colombia, Peru, and Venezuela Compared. In Business and the State in Developing Countries, edited by Maxfield, Sylvia and Ross Schneider, Ben. Ithaca: Cornell University Press.
Urrutia, Miguel. 1983. Gremios, Política Economica y Democracia. Bogota: Fondo Cultural Cafetero.
Weyland, Kurt. 1997. ‘Growth with Equity’ in Chile's New Democracy? Latin American Research Review 32(1): 3768.
Williamson, Oliver. 1996. The Mechanisms of Governance. New York: Oxford University Press.
Woodruff, Christopher. 1997. Trade Associations and Coalition Bargaining with Incomplete Contracts. San Diego: University of California.
Woodruff, Christopher. 1998. Contract Enforcement and Trade Liberalization in Mexico's Footwear Industry. World Development 26(6): 979991.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Business and Politics
  • ISSN: -
  • EISSN: 1469-3569
  • URL: /core/journals/business-and-politics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *


Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed