🧭 What the paper argues

Conventional wisdom holds that business groups form to lobby for policy changes. This article advances a different claim: business interest groups can secure tangible, distributive benefits for member firms without advocating policy reforms. Introducing "broker theory," the piece conceptualizes interest groups as intermediaries that link member firms to political patrons who provide concrete favors.

🔎 How the evidence was gathered

• The analysis focuses on China’s interprovincial chambers of commerce (CoCs).
• The main outcome is firm-level receipt of subsidies from local governments, evaluated before and after firms obtain CoC membership.

📊 Key findings

• Firms receive more distributive benefits—measured as local government subsidies—after obtaining CoC memberships.
• Two forms of heterogeneity support the broker interpretation:
• Chambers that contain official-turned brokers (former officials who act as intermediaries) generate patronage benefits for members, whereas chambers without such brokers do not.
• Greater transparency in subsidy allocation weakens the membership premium: the subsidy boost from CoC membership diminishes in regions with more transparent subsidy processes.

🛡️ What this is not

• The observed patronage benefits are not explained by CoCs’ policy influence or by reductions in local protectionism.

💡 Why it matters

• The findings shift attention from policy advocacy to distributive intermediation as a key mechanism through which business groups yield material gains for members.
• The results highlight how organizational composition (presence of official-turned brokers) and institutional context (transparency) shape the capacity of interest groups to secure targeted benefits.