Can BEOs Be Considered Inclusive Institutions?

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The 2024 Nobel Prize in Economics laureates Acemoglu, Johnson, and Robinson point out that inclusive institutions are the key to economic success. However, they define them only legally in terms of securing property rights, free markets, social participation, and decentralisation of public authority. From the perspective of new institutional economics, the concept of institutions is much broader – they encompass both formal procedures regulating a framework for human actions and behaviors, and established organisations.

The Nobel laureates’ analyses therefore, do not encompass business environment organizations (BEOs), which perform (or have the potential to perform) several crucial functions related to business support, business-to-administration (B2A) dialogue, and the decentralisation of selected public tasks (both authoritative and non-authoritative).

Undoubtedly, competent, efficient, and effective BEOs (among them, chambers of commerce represent the interests of businesses most broadly) can play an important role in economic development. Not all of them, however, support all businesses. This observation raises a key question from the perspective of research on institutional inclusiveness: What does inclusiveness mean in the case of business environment organisations?

The concept of inclusivity is most often considered in relation to various minorities and disabilities. Analysis of the documents and programs of various BEOs that can be found online indicates that they primarily focus on promoting the absence of barriers or discrimination in the labor market. However, in the case of BEOs, the inclusiveness test should focus primarily on the relationship between entrepreneurs and the organisation. This is the level that determines whether a business organisation can be considered inclusive.

The analysis of the principles of operation and tasks of BEOs shows that their inclusiveness should be assessed in at least six dimensions:

• Coverage. Mandatory or voluntary membership determines the extent to which the organisation is representative and formally obliged to advocate for the interests of all businesses.

• Governance. Are there formal guarantees ensuring the participation of representatives of enterprises of all sizes and sectors in decision-making processes? The composition of governing bodies influences the direction of an organisation’s activities.

• B2A processes. Are the processes of developing positions and policies in business-to-administration (B2A) relations transparent and inclusive? Do they reflect the interests of a broad spectrum of companies rather than privileging selected groups (e.g., large corporations or exporters), which would make the organisation exclusive rather than inclusive?

• Decentralisation. Do BEOs participate in the decentralisation of public tasks? If so, what forms of decentralisation are implemented, and through which mechanisms? Does this decentralisation apply only to specific activities or groups of enterprises, or is it horizontal and broadly inclusive in scope?

• Services. Does the range of the organisation’s services address the needs of the widest possible group of entrepreneurs?

• Organisational DEI. Are the services and support offered by BEOs accessible to all types of businesses, regardless of the origin or disability of their owners or shareholders?

BEOs must meet the conditions described above to be considered business-inclusive institutions. This type of analysis can help diagnose the reasons for the relatively low acceptance of these much-needed business environment organisations among entrepreneurs, especially SMEs.