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Business Associations, Lobbying, and Endogenous Institutions

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  • Larrain Aylwin, M.J.

    (Tilburg University, Center For Economic Research)

  • Prüfer, J.O.

    (Tilburg University, Center For Economic Research)

Abstract

Are business associations - private, formal, nonprofit organizations designed to promote the common interests of their members - positive or negative for the economy and overall welfare? Scholars from institutional and organizational economics, on the one side, and from industrial organization, law & economics, and public choice, on the other side, have given different answers to this question, which is instrumental for policy making. We construct a model that endogenizes association membership of firms and the main functions of associations, which can have positive or negative spillovers on the economy. We derive predictions regarding associations’ functions and their net welfare effects, depending on the level of property rights securitization, which are in line with empirical observations.
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Suggested Citation

  • Larrain Aylwin, M.J. & Prüfer, J.O., 2014. "Business Associations, Lobbying, and Endogenous Institutions," Discussion Paper 2014-071, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:bb36b0e2-f17f-4d76-8637-add1a10ae58d
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    References listed on IDEAS

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    More about this item

    Keywords

    Business Associations; Trade associations; Professional organizations ; Guilds; Lobbying; Private Ordering; Endogenous institutions; Quality of Legal Institutions;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations

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