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Encyclopedia > Mancur Olson

Professor Mancur Olson (1932 - February 19, 1998) was a leading social scientist who, at the time of his death, worked at the University of Maryland, College Park. Among other areas, he made contributions to institutional economics on the role of property, taxation, public goods and contract rights in economic development. 1932 is a leap year starting on a Friday. ... February 19 is the 50th day of the year in the Gregorian Calendar. ... 1998 is a common year starting on Thursday of the Gregorian calendar, and was designated the International Year of the Ocean. ... Terms like SOSE (Studies of Society & the Environment) not only refer to social sciences but also studies of the environment. ... University of Maryland, College Park The University of Maryland, College Park (also known as UM, UMD, or UMCP) is a public university located in College Park, Maryland, just outside Washington, D.C. The flagship institution of the University System of Maryland, the university is most often referred to as the... In economics, the institutional economics school goes beyond the usual economic focus on markets, to look more closely at human-made institutions. ... Economic development is the development of economic wealth of countries or regions for the well-being of their inhabitants. ...

Olson focused on the logical basis of interest group membership and participation. The reigning political scientists of his day had granted groups an almost primordial status. Some appealed to a natural human instinct for herding, others ascribed the formation of groups that are rooted in kinship to the process of modernization. Olson offered a radically different account of the logical basis of organized collective action. His central thesis was that “only a separate and ‘selective’ incentive will stimulate a rational individual in a latent group to act in a group-oriented way”; that is, only a benefit reserved strictly for group members will motivate one to join and contribute to the group. This means that individuals will act collectively to provide private goods, but not to provide public goods. See also: Political Science Notable political scientists Kenneth Arrow - Nobel Memorial Prize winning economist who published influential paper on his widely cited Arrows Impossibility Theorem Robert Axelrod Duncan Black - Responsible for unearthing the work of many early political scientists, including Charles Dodgson Jean-Charles de Borda - 18th century mathematician... The introduction of this article does not provide enough context for readers unfamiliar with the subject. ... A man herding goats in Tunisia Herding is the act of bringing individual animals together into a group, maintaining the group and moving the group from place to place—or any combination of those. ... Kinship is the most basic principle of organizing individuals into social groups, roles, and categories. ... This article needs to be cleaned up to conform to a higher standard of quality. ... The economic theory of collective action is concerned with the provision of public goods (and other collective consumption) through the collaboration of two or more individuals, and the impact of externalities on group behavior. ...

The accepted wisdom in Olson’s day ran that 1) if everyone in a group has interests in common, then they will act collectively to achieve them; 2) in a democracy, the greatest concern is that the majority will tyrannize and exploit the minority.

Olson's "Logic of Collective Action" (1965) ran counter to this wisdom. Rather, he argued that individuals in any group attempting collective action will have incentives to “free ride” on the efforts of others if the group is working to provide public goods. Individuals will not “free ride” in groups which provide selective incentives only to active participants. Public goods are goods which are non-excludable (i.e. one person cannot reasonably prevent another from consuming the good) and non-rival (one person’s consumption of the good does not affect another’s, nor vice-versa). Hence, without selective incentives to motivate participation, collective action is unlikely to occur even when large groups of people with common interests exist.

He also noted that large groups will face relatively high costs when attempting to organize for collective action; small groups will face relatively low costs. Furthermore, individuals in large groups will gain relatively less per capita of successful collective action; individuals in small groups will gain relatively more per capita through successful collective action. Hence, in the absence of collective incentives, the incentive for group action diminishes as group size increases, so that large groups are less able to act in their common interest than small ones.

Hence, not only will collective action by large groups be difficult to achieve even when they have interests in common, but you can also have situations where the minority (bound together by concentrated selective incentives) can tyrannize the majority (where the incentives to act are diffuse).

In 1982, Olson expanded his Logic of Collective action in an attempt to explain "The Rise and Decline of Nations". The idea here is that small distributional coalitions tend to form over time in countries. Groups like cotton-farmers, steel-producers, and labor unions will have the incentives to form political lobbies and influence policies in their favor. These policies will tend to be protectionist and anti-technology, and will therefore hurt economic growth; but since the benefits of these policies are selective incentives concentrated amongst the few coalitions members, while the costs are diffused throughout the whole population, the "Logic" dictates that there will be little public resistance to them. Hence as time goes on, and these distributional coalitions accumulate in greater and greater numbers, the nation burdened by them will fall into economic decline. Interest group is a term in politics, that refers to an organization or other collective of people who have a specific political or economic interest. ... Protectionism is the economic policy of promoting favored domestic industries through the use of high tariffs and other regulations to discourage imports. ...

Selected works

  • Logic of Collective Action: Public Goods and the Theory of Groups, Harvard University Press, 1st ed. 1965, 2nd ed. 1971
  • The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, Yale University Press, 1984
  • Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships, Oxford University Press, 2000
  • "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," (with Martin C. McGuire) in The Journal of Economic Literature (March 1996).

  Results from FactBites:
"How to Grow" by Kenneth Arrow (1069 words)
Olson does not consider that free markets are the entire solution to the problems of growth, though of course their vitality is a necessary condition.
Olson attributes the rapid postwar growth of the last two states to the fact that markets of all kinds could operate freely and reliably and that the institutions representing old special interests had been destroyed by the defeat.
Olson several times pointed out that markets involving time and uncertainty are especially important for growth, e.g., a commitment that the proceeds of an investment in fixed capital would remain in the hands of the investor.
Mancur Olson - Wikipedia, the free encyclopedia (532 words)
Olson focused on the logical basis of interest group membership and participation.
Olson argued that a "roving bandit" (under anarchy) has an incentive only to steal and destroy, whilst a "stationary bandit" (a tyrant) has an incentive to encourage a degree of economic success, since he will expect to be in power long enough to take a share of it.
Olson saw in the move from roving bandits to stationary bandits the seeds of civilization, paving the way for democracy, which improves incentives for good government by more closely aligning it with the wishes of the population.
  More results at FactBites »



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