This article provides an overview of Mancur Olson’s Logic of Collective Action and its impact on Olson’s subsequent work. It also suggests that the implications of his simple, elegant, theory have not yet been fully worked out. To illustrate this point, the second half of the essay demonstrates that the number of privileged and latent groups and their costs in a given society are not entirely determined by economic factors or group size alone. Politics, technology, and culture also matter.
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The relationship between group size and organizational possibilities is also discussed in Buchanan and Tullock (1962, chs. 14 and 19), but their analysis is limited to decision costs and the design of an organization's constitutional framework. Riker (1962) develops an idea related to Olson’s exclusive groups in his analysis of political coalitions. The Logic may be said to have generalized these ideas. Olson’s characterization of the aims of “inclusive” and “exclusive” groups was largely displaced by the spectrum of good types suggested by Buchanan (1965).
Olson refers to a large group that somehow manages to organize as a “mobilized latent” group, a somewhat awkward term of expression, which is fairly rare in his writing.
McGuire’s (1998) memorial essay on Olson notes that Olson’s first book was actually a book on economic history, Olson (1963), written while an assistant professor at the U.S. Air Force Academy. The Logic was Olson’s first important book. The book manuscript for the Logic was finished while an assistant professor at Princeton University. It was published 2 years before he left Princeton for the University of Maryland in 1967. McGuire notes, however, that the Logic was not immediately influential. Rowley (2014) provides excerpts from several early reviews of Olson's most famous book that affirms that conclusion.
Olson, for example is not cited in the widely read book by Piketty (2014).
The existence of encompassing groups is used in How Bright are the Northern Lights (Olson 1990) to account for Scandinavian success relative to much of the rest of Europe.
Of course, such life and death threats might induce latent groups to mobilize. For example, the Netherlands, Switzerland, and the United States all arguably began as defense alliances. In this manner, the threat of roving bandits can provide a social-compact-based explanation for the emergence of productive states, although one neglected in Power and Prosperity.
Congleton (Congleton 2011, ch. 4) argues that formal agreements on taxation between a stationary bandit gang and the communities to be expropriated may also increase future harvests. Thus, constitutional governance can also emerge within a stationary bandit model of the state.
This point conflicts somewhat with Olson’s discussion of political parties in the Logic, where he argues that “Political machines are able to develop well-articulated organizational structures, then, because they strive mainly for benefits that accrue to particular individuals, rather than for the common interests of any large group” (Olson 1965, p. 165). It also bears noting that political parties are rather odd groups, because they have an inclusive range up to 50 %, but become exclusive groups shortly beyond that insofar as transfers or other privileges can be targeted at its own members.
Such groups could, of course, receive support from distributional coalitions, who expect to benefit from more encompassing policies. See Congleton (1991) for an analysis of the efforts of ideological and economic interest groups on public policies.
Olson (1965, p. 161) discusses such possibilities but considers such cases to be instances of irrational behavior, beyond the scope of his analysis (and not very important).
The appendix of Wilson (2014) provides an accessible overview of rival biological theories of group selection. Biologists have recognized the existence of several social species, including humanity, for which group selection evidently has been important.
That only a few social species have been identified by biologists suggests that team production is not always highly productive and/or that free riding on such teams is not always easy to identify and punish. Biological and social evolution may thus support a variety of context-specific dispositions, not all of which increase the likelihood of collective action. The simulation studies of Congleton and Vanberg (1992) demonstrate that a variety of strategies may coexist in an evolutionary equilibrium.
Game theory often implies mixed strategy equilibria in public goods and free riding games. Such strategies would generate random degrees of cooperation among group members, as with random attendance at events. Mixed strategies provide another source of residuals with respect to predictions about collective action, although one that could not be used to improve the fit of any estimated models of collective action.
See Alchian and Demsetz (1972) for the classic discussion of team production.
The effects of internalized norms can be represented in rational choice terms as an extra “ethical benefit” for engaging in collective action. These benefits reduce the magnitude of the selective incentive required to induce cooperation in a standard non-cooperative public goods game.
(Olson 1982, ch. 6) mentions Weber’s work in Rise and Decline as an alternative explanation for economic development, but one that he discounts.
De Tocqueville (1835) argued that cultural differences between France and the United States affected propensities to join organizations. His travels and observations implied that Americans were more disposed to join clubs and political organizations than were the French.
John Stuart Mill’s (1873) autobiography provides numerous anecdotes about the political activities of Bentham’s circle. These were continued by many others in the half century after Bentham’s death in 1832, including Mill himself.
The same approach can be used by a variety of interest groups and public sector entrepreneurs as pointed out in Wagner’s (1966) review of the Logic. Sometimes, collective goals can be advanced without coordinated collective action.
Many of these regulations were difficult to enforce, as with rules concerning religious beliefs, books, and sexual conduct. Many others, as with dress and sumptuary codes, rules of deference and etiquette, and marriage were relatively easy to enforce because they constrained behavior in public places. In both cases, the effects of the regulations imposed by normative groups are similar to those of economic interest groups: experimentation and innovation are inhibited, cultural flexibility reduced, and inequalities often enshrined. The changes in behavior induced also have economic effects on suppliers of services and goods that are encouraged or discouraged by the normative groups.
Olson (1982) argues that the laissez-faire policies advocated by most nineteenth century utilitarians were not by themselves sufficient to offset the effects of distributional coalitions. One could argue, however, that nineteenth century liberals were able to disrupt the distributive equilibrium of prior centuries and delay the associated decline in growth rates under the new social order for many decades.
Both the Logic and Rise and Decline acknowledge as much. The Logic spends much of chapter 4 on Marx’s theory of class action, and criticizes its lack of microeconomic foundations, namely that associated with free riding. The Rise and Decline spends a good deal of effort criticizing the ideology of laissez faire. In doing so, Olson clearly acknowledges that norm-motivated groups exist and may engage in a good deal of political activity, although he does not analyze it in detail. In his analysis, such groups are doomed to latency rather than effectiveness. To mobilize such latent groups requires selective incentives or irrationality on the part of group members, i.e., failure to recognize one’s own personal advantages from free riding.
This paper has benefited from numerous suggestions by Michael Munger, Jac Heckelman, and William Shughart who are, of course, blameless for the use to which I put their good advice.
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Congleton, R.D. The Logic of Collective Action and beyond. Public Choice 164, 217–234 (2015). https://doi.org/10.1007/s11127-015-0266-7