Business Associations and Private Ordering

I study the capacity of business associations - private, formal, noncommercial organizations designed to promote the common business interests of their members - to support contract enforcement and collective action. Inspired by recent empirical literature, my theoretical framework connects the organizational and institutional features of formal and informal business organization with socioeconomic distance. I show how associations provide value to their members even if members are already embedded in social networks, and which players join an association. I propose explanations for empirical puzzles, put forward novel testable hypotheses, and relate business associations to alternative private ordering institutions