The Logic of Collective Action
The Logic of Collective Action: Public Goods and the Theory of Groups is a book by Mancur Olson, Jr. first published in 1965. It develops a theory of political science and economics of concentrated benefits versus diffuse costs. Its central argument is that concentrated minor interests will be overrepresented, while diffuse majority interests will be trumped, due to a free-rider problem which is stronger when a group becomes larger.
The book challenged accepted wisdom in Olson’s day that:
- if everyone in a group (of any size) has interests in common, then they will act collectively to achieve them; and
- in a democracy, the greatest concern is that the majority will tyrannize and exploit the minority.
The book argues instead 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 benefits only to active participants.
Pure public goods are goods which are non-excludable (i.e. one person cannot reasonably prevent another from consuming the good) and non-rivalrous (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.
The book also noted that large groups will face relatively high costs when attempting to organize for collective action while small groups will face relatively low costs. Furthermore, individuals in large groups will gain less per capita of successful collective action; individuals in small groups will gain more per capita through successful collective action. Hence, in the absence of selective 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.
The book concludes that, not only will collective action by large groups be difficult to achieve even when they have interests in common, but situations could also occur where the minority (bound together by concentrated selective incentives) can dominate the majority.
Olson's original logic of collective action has received several critiques, either based on a different interpretation of the observations on minority interest representation or based on a disagreement on the degree of concentrated interest representation.
Susan Lohmann agrees with the puzzling observations also made by Olson. She classifies these observations as both economic puzzles and political puzzles. Economic puzzles are for instance measures which result in a general welfare-loss, in favour of minority protection, that are multiple times larger than the minority benefit. One example she gives relates to a quota on sugar imports in the United States, which is calculated to generate 2261 jobs at the expense of a general welfare reduction of 1162 million dollars (Hufbauer and Elliot, 1994). The implicit price for a job in the sugar industry is then above 500.000 dollar, allowing for significant room for Pareto improvement. Political puzzles relates to cases where minority trumps majority. An example she gives is the so-called rural bias in urbanized and developed countries, of which the Common Agricultural Policy in the European Union is a prime example.
Lohmann observes that Olson's free-rider problem is insufficient in explaining these economic and political puzzles. Rather, she lies the explanation in the role of uncertainty (information asymmetry among voters) when special interest groups or individuals evaluate how political actors promote their interests. She states that everyone can be considered a special interest. Because everyone is (relatively) sure how well their interests are represented, they account more weight to their interest representation when evaluation political actors than to the general benefit. Lohmann then argues that it could be politically viable to focus on separate narrow interests, at the expense of general benefits.
Gunnar Trumbull, on the other hand, rejects the observation by Olson and Lohmann that concentrated interests dominate public policy. Historically, he points out, diffuse interest have nearly always found ways to be represented in public policy-making, for instance relating to retirees, patients or consumers. The explanation for this lies Trumbull with the role of legitimacy when interest groups promote policies. He argues that diffuse interests actually have a legitimacy premium when they manage to mobilize, while concentrated interest are viewed with suspicion. Additionally, he describes the concept of legitimacy coalitions, which are coalitions between state policymakers, social activists or industry which are made to support the promotion of certain policy. By having to form a coalition, the interests are more broadly represented. The post-war neocorporatist system is an example of such a coalition.
- Lohmann, Susan (2003). "Representative Government and Special Interest Politics (We Have Met the Enemy and He Is Us).". Journal for Theoretical Politics vol.15: 2009-319.
- Olson, Mancur (1971) . The Logic of Collective Action: Public Goods and the Theory of Groups (Revised edition ed.). Harvard University Press. ISBN 0-674-53751-3. Description, Table of Contents, and preview.
- Trumbull, Gunnar (2012). Strength in numbers: the political power of weak interests. Cambridge MA: Harvard University Press.