Failed cooperation in heterogeneous industries under the National Recovery Administration

A case study, a formal model, and an analysis of Census of Manufactures data support a conclusion that cost heterogeneity was a major source of the ''compliance crisis'' affecting a number of National Recovery Administration ''codes of fair competition.'' Key elements of the argument are assumptions that progressives at the NRA allowed majority coalitions of small, high-cost firms to impose codes in heterogeneous industries, and that these codes were designed by the high-cost firms under an ultimately erroneous belief that they would be enforced by the NRA.