BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 5/2010:
The composition and interests of Russia’s business lobbies: A test of Olson’s “encompassing organization” hypothesis
William Pyle and Laura Solanko ()
Abstract: Why are some lobby groups less benign in their external
effects than others? Nearly three decades ago, Mancur Olson (1982) proposed
that less-encompassing lobby groups with their constituents collectively
representing a narrow range of sectors are more apt to seek the types of
subsidies, tariffs, tax loopholes, and competition-limiting regulations
that impose costs on the rest of society. To the best of our knowledge,
Olson’s oft-cited hypothesis has yet to be actually tested, due perhaps to
the absence of adequate data on general policy preferences of various types
of lobbies. Thus, we examine a pair of surveys from 2003 and 2004 which
were targeted at managers of business associations (lobby groups) and their
enterprise constituents to directly test Olson’s hypothesis. Managers from
a diverse array of Russian industrial firms and business associations were
asked similar questions regarding their attitudes to policies that
explicitly benefit well-defined sectoral or regional interests and,
implicitly, impose external costs. The pattern of responses is striking.
Managers of less-encompassing associations and the constituent firms of
such groups are much more apt to see such policies in a favorable light. In
contrast, more-encompassing associations and their member display greater
skepticism toward narrowly targeted government interventions. Our results
strongly support Olson’s hypothesis.
Keywords: business associations; encompassing interests; Russia; Olson; (follow links to similar papers)
JEL-Codes: D02; D70; L31; (follow links to similar papers)
41 pages, March 25, 2010
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