HETFA Working Paper No. 6.
Fruzsina Bognár (2011): Chambers of Commerce, Entrepreneur Associations and Advocacy Groups. ISBN 978-963-89112-2-3
Our essay is based on the case studies of the research with the title „Chambers of Commerce, Entrepreneur Associations and Advocacy Groups”. The research focused on pressure and advocacy groups, and commercial chambers of entrepreneurs. The case studies were built on interviews with executive managers, press and document analysis. The aim of the study is to identify the strategies that these organizations apply to reduce the effect of free rider problem. We analyze what typical answers are elaborated to the problem of low attendance by endogenous and exogenous groups. The organizations maintain their operation by offering selective incentives or exploiting alternative financial resources (e.g. European Union and state funds). The choice between or the combination of this two strategies are determined by the group identity and the characteristics of the membership. The free rider problem was successfully handled by exogenous groups who state purposive incentives. While big, endogenous groups tend to solve the financial problem that free-riding can mean with getting privileges and providing public services that are financed by local and EU fund sources.