American Journal of Political Science
Brokerage and patronage: Regional chambers of commerce and firm subsidies in China
2025-11-18
Although conventional wisdom suggests that corporations form groups to obtain policy benefits through lobbying, we argue that business interest groups can secure distributive benefits for their members without advocating for policy changes. We introduce broker theory, which posits that interest groups act as intermediaries, linking member firms with political patrons who deliver tangible favors. We test this theory by examining China's interprovincial chambers of commerce (CoCs). We show that firms receive more distributive benefits—measured by subsidies from local governments—after obtaining CoC memberships. We present two forms of heterogeneity that support the broker role of CoCs. First, patronage benefits emerge only in chambers with officials‐turned‐brokers, who facilitate access to political patrons. Second, transparency weakens subsidy brokering: The membership premium diminishes in regions with greater transparency in subsidy allocation. We also show that these patronage benefits are not driven by the policy influence of CoCs or by reduced local protectionism.