The composition and interests of Russia’s business lobbies: testing Olson’s hypothesis of the “encompassing organization”

Why are some business lobbies less benign in their external effects than others? In The rise and decline of nations (New Haven: Yale University Press, <CitationRef CitationID="CR44">1982</CitationRef>), Mancur Olson proposed that less-encompassing groups—i.e., those whose constituents collectively represent a relatively narrow range of interests—have a greater interest in seeking the types of subsidies, tariffs, tax loopholes, and competition-limiting regulations that, while benefiting their members, impose costs on the rest of society. By drawing on a unique pair of surveys—one targeted to managers of Russian regional lobbies, and the other addressed to managers of Russian industrial enterprises—we provide what we believe to be the most direct test of this hypothesis to date. The pattern of responses is striking. Managers of both the less encompassing lobbies and the enterprises belonging to those types of organizations display stronger preferences for narrowly targeted policy interventions. Our results, that is, strongly support Olson’s hypothesis. Copyright Springer Science+Business Media, LLC 2013