Paper short abstract:

Traditional theories of business associations are irrelevant to contemporary Latin America because of dramatic changes over the last 20 years in the economy. My theory of business organisation redefines the forms of business organisation and their causes, helping to better understand policy outcomes.

Paper long abstract:

Political science literature explains the influence of business interest groups on policy outcomes, but lacks a theory on the formation of those groups in Latin America. Traditional theories of business associations are now irrelevant because of dramatic changes over the last 20 years in the economy. My thesis offers a theory of business organisation that redefines the forms of business organisation and their causes. My research will be essential in understanding policy outcomes and how political systems respond to powerful private actors. During the wave of neoliberal reforms of the 1980s, the success of political efforts to create a more open economy depended on support from the industrial sector. Likewise, during the 2000s, the success of political efforts to create a more inclusive society with quality jobs led growth will depend on business actors' behaviour and support. First, my research redefines business organisation along two dimensions: the type of business organisation (m acro-corporatist; club; pluralist) and whether business coordination is situational or stable over time. Second, it uncovers three determinants: Corporate governance, Costs of lobbying, and Relations between business and the state. My research predicts that new hierarchical models of corporate governance have diminished the relevance of traditional business associations, moving Latin American business organisations away from the macro-corporatist type. Instead, countries have moved towards either a club-type or a pluralist-type of organisation, depending on the historical relationship between business and the state. Finally, costs of lobbying have determined whether business coordination has been situational.