Reciprocity, associability and cartelisation: organisational development of the New Zealand Shipowners' Federation: 1906-1960s
But for the reciprocity garnered early by the New Zealand Shipowners’ Federation, its organisational life-chances would have been curtailed. Reciprocity- based cooperation sustained the Federation until member bonds gelled and strong membership incentives could be offered. Although the Federation subsequently fixed prices and spawned a shipping cartel, forceful external constraints limited its ability to extract economic rents from shippers and prompted it to enhance member efficiency. While this end state is not uncommon, the Federation’s atypical developmental pathway affords two insights. Firstly, reciprocity can function as a ‘starting mechanism’ for industry associations with few selective incentives. Secondly, government regulations can evoke cartel-like behaviour by an association at the same time as they limit its ability to raise prices.