Strength in Numbers or Collective Frailty? The Organizational Capacity of Microenterprises

Abstract

Consensus holds that large businesses and their organizations can exert significant political influence; however, our understanding of how microenterprises and their organizations wield influence—or not—lags far behind. In fact, scholars have drawn opposing conclusions about microenterprises’ organizational capacity to shape policy. One view is that small firms face barriers to collective action and are incapable of effectively advocating for policies that suit them. An alternative view is that they are sufficiently influential to stymie the implementation of unfavorable policies outright. This paper refines our understanding of the organizational influence of microenterprises by arguing that these two views are not incompatible. By distinguishing (1) between “defiant” and “negotiated” behaviors and (2) between advocacy at local and national levels, I make the case that clusters of microenterprises can be both effective at resisting policy intervention at the local level and unable to bring political pressure on national policymaking. Focusing on the area of environmental and labor regulation, I present schematic descriptions of this dynamic in three industries that are dominated by geographically clustered microenterprises in Mexico: brickmaking, leather tanning, and ceramics production.