The Composition and Interests of Business Lobbies: Testing Olson’s “encompassing Organization” Hypothesis

Willaim Pyle (Middlebury College)
Laura Solanko (Bank of Finland Institute for Econ. in Transition)

Abstract: In The Rise and Decline of Nations, Olson (1982) proposed that lobbying organizations whose members collectively represent a broader range of sectors are less apt to seek from government the types of policies (e.g., subsidies, tariffs, tax loopholes and competition-limiting regulations) that might impose noteworthy external costs. By drawing on a unique pair of surveys, targeted to managers of both Russian business lobbies and their enterprise constituents, we provide what we believe to be the first direct test of this hypothesis. Similar response patterns to questions gauging the intensity of preferences for government intervention support the relationship predicted by Olson.

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