Document Type

Book Chapter

Publication Details

Ville, S. & Merrett, D. (2006). Investing in inter-organisational communication: the Melbourne Wool Brokers Association. In G. Boyce, S. Macintyre & S. Ville (Eds.), How Organisations Connect Investing in Communication (pp. 171-197). Carlton, Vic.: Melbourne University Publishing.


Trade associations were common in Australia in the 1960s with an estimated 1250 in existence (Freeman 1968: 443–58). Their primary role, as perceived by economists of the day and the Attorney-General intent on introducing legislation to quell restrictive trade practices, was to create economic gain for the association’s members at the expense of their suppliers and/or customers. While Freeman (1968: 457–58) argued that trade associations were neither necessary nor sufficient conditions for restrictive trade practices, such an interpretation was swept aside by Mancur Olson’s influential work on the rent-seeking ‘distributional coalition’ from the 1960s to the 1980s (Olson 1965, 1982). New paradigms, including the new institu-tional economics (Williamson 1985; Eggertsson 1990; Buckley and Michie 1996) and social capital theory provide alternative and complementary frameworks with which to analyse associations, which are located between hierarchy, the individual firm and the market, and made up of many competing firms whose relationships up and down supply chains are arm’s length exchange based on price.