Business Associations and the Decentralization of Penury: Functional Groups and Territorial Interests

This article compares the responses of subnational business interest associations (BIAs) in declining industrial regions to the demotion of centrally-administered regional economic policy in favor of regional and local initiatives — a "decentralization of penury"— in Great Britain and West Germany. As an organization that represents chiefly functional membership interests, a BIA is not the most obvious candidate for economic initiatives based on territory. Drawing on a comparison of BIAs in two British administrative regions and two German Länder , I discuss the mix of elements that influence whether business is capable of fighting out politics about territory across territory, either on a local or regional basis. The analytical framework employed is based on Schmitter and Streeck's logics of membership and influence. The findings suggest that business associations formulate and pursue territorial economic interests consistently, yet face powerful constraints generated by their relations with members and by central government policies. Where the spatial economic interests of business are concerned, BIAs in both countries, despite the clear differences in organizational properties and capabilities, are best able to balance the tensions generated by the two logics when government policy encourages a local focus.