January 22, 1932|
Grand Forks, North Dakota
|Died||February 19, 1998
College Park, Maryland
|Institution||University of Maryland, College Park|
School or tradition
|New institutional economics|
|Alma mater||Harvard University
University of Oxford
North Dakota State
Mancur Lloyd Olson, Jr. (// or //; January 22, 1932 – February 19, 1998) was an American economist and social scientist who taught economics at the University of Maryland, College Park. His most influential contributions were in institutional economics, and in the role which private property, taxation, public goods, collective action, and contract rights play in economic development.
Education and career
His first job was as an assistant professor at Princeton University. Afterwards, he served as Deputy Assistant Secretary of Health, Education and Welfare for two years in Washington, D.C. In 1969 he left government and joined the economics department of the University of Maryland, College Park, where he remained until his death.
In his first book, The Logic of Collective Action: Public Goods and the Theory of Groups (1965), he theorized that what stimulates people to act in groups is incentive; members of large groups do not act in accordance with a common interest unless motivated by personal gain (economic, social, etc.). While small groups can act on shared objectives, large groups will not work towards shared objectives unless their individual members are sufficiently motivated.
In 1982, he expanded the scope of his earlier work in an attempt to explain The Rise and Decline of Nations (1982). He argues that groups such as cotton-farmers, steel-producers, and labor unions have an incentive to form lobby groups and influence policies in their favor. These policies will tend to be protectionist, which will hurt economic growth; but because the benefits of such policies are concentrated, and their costs are diffused throughout the whole population, there will be little public resistance to them. As distributional coalitions accumulate, nations burdened by them will fall into economic decline. His work influenced the formulation of the Calmfors–Driffill hypothesis of collective bargaining.
In his final book, Power and Prosperity (2000), Olson distinguished between the economic effects of different types of government, in particular, tyranny, anarchy, and democracy. Olson argued that under anarchy, a "roving bandit" only has the incentive to steal and destroy, whilst a "stationary bandit"—a tyrant—has an incentive to encourage some degree of economic success as he expects to remain in power long enough to benefit from that success. A stationary bandit thereby begins to take on the governmental function of protecting citizens and their property against roving bandits. In the move from roving to stationary bandits, Olson sees the seeds of civilization, paving the way, eventually for democracy, which by giving power to those who align with the wishes of the population, improves incentives for good government.
To help bring his ideas to the attention of policymakers Olson founded the Center For Institutional Reform in the Informal Sector ("Iris Center") funded by USAID, the IRIS Center, based at the University of Maryland, sought to supply an intellectual foundation for legal and economic reform projects carried out by USAID in formerly communist states that were attempting to make the transition to market-driven democratic governments governed by the rule of law. It was particularly active in East and Central Europe and the former Soviet Union.
The Center also became actively involved in projects in South America, Africa, and Asia, where it became a proponent of judicial independence. It sponsored the first conference on corruption in francophone Africa in the 1990s, when it was a very sensitive subject. The IRIS Center continued to operate after Olson's death, but was eventually folded into other programs at the University of Maryland.
To honor Olson's many contributions, the American Political Science Association established the Olson Award for the best PhD dissertation in Political Economy. In 2013 the University of Maryland announced the creation of a new endowed professorship—the Mancur Olson Professor of Economics. Maryland Professor of Economics Peter Murrell was the first Mancur Olson Professor.
- The Logic of Collective Action: Public Goods and the Theory of Groups (PDF). Cambridge, MA: Harvard University Press. 1965. ISBN 0-674-53751-3.
- The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities. New Haven: Yale University Press. 1982. ISBN 978-0300030792.
- Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships. New York: Basic Books. 2000. ISBN 0-465-05195-2.
- "Towards a Mature Social Science". International Studies Quarterly 27 (1): 29–37. March 1983.
- "Space, Agriculture, and Organization". American Journal of Agricultural Economics (Agricultural & Applied Economics Association) 67 (5): 928–937. December 1985. doi:10.2307/1241349.
- "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force". Journal of Economic Literature 34 (1): 72–96. March 1996. (with Martin C. McGuire)
- "Dictatorship, Democracy, and Development" (PDF). American Political Science Review 87 (3): 567–576. September 1993.
- Collective action
- John Stuart Mill, Principles of Political Economy (1871) Book V, ch IX §12
- New institutional economics
- The Logic of Collective Action: Public Goods and the Theory of Groups (1965)
- Peter Passell (February 24, 1998). "Mancur Olson, 66, a Professor and Author of Economics Books". New York Times.
- The Economic Journal, Vol. 109, No. 456, Features (Jun., 1999), pp. F445
- Mancur Olson, Jr., 1965, 2nd ed., 1971. The Logic of Collective Action: Public Goods and the Theory of Groups, Harvard University Press, Description, Table of Contents, and preview.
- Mancur Olson, 1982. The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, Yale University Press, 1982. Description, chapter-preview links, and review quotes.
- Mancur Olson, 2000. Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships, Oxford University Press. Description and chapter-preview links. Foreign Affairs review.