Voice, Influence or Security?: The Motives for Membership in Post-Communist Business Associations

40 Pages Posted: 1 Aug 2011 Last revised: 17 Aug 2011

Date Written: 2011

Abstract

This article investigates the incentives that lead firms to participate in business associations in the post-communist context. The central claim is that associational membership is highly conditioned by firms’ perceptions of the quality of the regulatory regime surrounding the firm. I demonstrate that under conditions of severe regulatory uncertainty, business participation in voluntary organizations is driven by the incentive to mitigate risks entailed in their relationship to the state, not by the prospect of gaining political advantages from government, which has been the conventional assumption governing many studies of business interest groups. In addition to augmenting firms’ capacity for a collective response to breaches by state agents, membership confers informational advantages, including advance notice on changes to existing rules, timely guidance on how to stay in compliance and pooled knowledge about how contradictory requirements may be interpreted and applied. Private organizations thus serve as intermediary mechanisms for risk mitigation that are more effective than both formal appeals for redress to the state and go-it-alone strategies that are individually available to firms.

Suggested Citation

Hedberg, Masha, Voice, Influence or Security?: The Motives for Membership in Post-Communist Business Associations (2011). APSA 2011 Annual Meeting Paper, Available at SSRN: https://ssrn.com/abstract=1899703

Masha Hedberg (Contact Author)

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

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