As if transaction cost and information in the reality world are concerned,either public sector or private enterprise are faced the problem of transaction cost,principal agent and the dilemma of collective actions.Evidence indicated that business associations,as a institution arrangement,can effectively relax these problems.This paper figured out that business association can help in the property rights' implement and supervising,and provide public services,harmonize the conflicts of members and provide staff training,while its functions' implementing depends on selective incentives,member density,harmonizing mechanism and the relation between staff and member enterprises.