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The Logic of Collective Action: Public Goods and the Theory of Groups is a book by Mancur Olson, Jr. 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 and diffuse majority interests trumped, due to a free-rider problem that is stronger when a group becomes larger.

Contents

The book challenged accepted wisdom in Olson's day that:

  1. if everyone in a group (of any size) has interests in common, then they will act collectively to achieve them; and
  2. 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 that provide benefits only to active participants.

Pure public goods are goods that 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 noted that large groups will face relatively high costs when attempting to organize for collective action while small groups will face relatively low costs, and individuals in large groups will gain less per capita of 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 is collective action by large groups difficult to achieve even when they have interests in common, but situations could 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, based either on a different interpretation of the observations on minority interest representation, or on a disagreement on the degree of concentrated interest representation.

Information asymmetry

Lohmann agrees with puzzling observations made by Olson, which she classifies as economic and political puzzles. Economic puzzles are cases of general welfare loss in favour of a minority benefit which is smaller in sum. An example she gives is a quota on sugar imports in the United States, which generates 2261 jobs at the expense of a general welfare reduction of $1,162 million (Hufbauer and Elliot, 1994). Then the implicit price for a job in the sugar industry is above $500,000, allowing for significant room for Pareto improvement. Political puzzles are cases where minority trumps majority. An example she gives is the rural bias in urbanized countries, such as the Common Agricultural Policy in the European Union.

Lohmann claims that Olson's free-rider problem is insufficient to explain these puzzles. Instead, she argues they are due to uncertainty (information asymmetry among actors) when special interest groups 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 give more weight to their interest representation when evaluating political actors than to the general benefit. Lohmann argues that it could be politically viable to focus on separate narrow interests at the expense of general benefits.

Legitimacy

Trumbull rejects the observation by Olson and Lohmann that concentrated interests dominate public policy. He points out that historically, diffuse interests nearly always found ways to be represented in public policy, such as the interests of retirees, patients or consumers. Trumbull explains this with the role of legitimacy of interest groups that promote policies. He argues that diffuse interests have a legitimacy premium when they manage to mobilize, while concentrated interests are viewed with suspicion. He describes the concept of legitimacy coalitions, which are coalitions between state policymakers, social activists or industry to promote certain policy. By having to form a coalition, the interests are more broadly represented. An example of such a coalition is the post-war neo-corporatist system.

Critical mass

Marwell and Oliver use mathematical and computational models to show that a number of the assumptions made by Olson are unrealistic, and if they are relaxed, the behavior of a system of rational agents changes dramatically. One assumption is that the "production function" of goods is linear. If this function instead accelerates, then a critical mass of early contributors can encourage a large number of others to contribute. Another assumption is that the cost of the good is a function of the size of the group that would benefit from it. For many public goods, this is not true, and Marwell and Oliver show that when the interest group is larger, there is a larger chance that it will include someone for whom it is rational to provide the good, either in part or in full.

  1. Lohmann, Susanne (2003). "Representative Government and Special Interest Politics (We Have Met the Enemy and He Is Us)". Journal for Theoretical Politics. 15 (3): 299-319}. doi:10.1177/0951692803015003004.
  2. Trumbull, Gunnar (2012). Strength in numbers: the political power of weak interests. Cambridge MA: Harvard University Press.
  3. Marwell, Gerald; Oliver, Pamela (1993). The Critical Mass in Collective Action: A Micro-Social Theory. Cambridge: Cambridge University Press. ISBN 978-0-521-30839-7.

The Logic of Collective Action Article Talk Language Watch Edit This article relies largely or entirely on a single source Relevant discussion may be found on the talk page Please help improve this article by introducing citations to additional sources Find sources The Logic of Collective Action news newspapers books scholar JSTOR August 2021 The Logic of Collective Action Public Goods and the Theory of Groups is a book by Mancur Olson Jr 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 and diffuse majority interests trumped due to a free rider problem that is stronger when a group becomes larger Contents 1 Overview 2 Critique 2 1 Information asymmetry 2 2 Legitimacy 2 3 Critical mass 3 See also 4 ReferencesOverview EditThe 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 that provide benefits only to active participants Pure public goods are goods that 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 noted that large groups will face relatively high costs when attempting to organize for collective action while small groups will face relatively low costs and individuals in large groups will gain less per capita of 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 is collective action by large groups difficult to achieve even when they have interests in common but situations could occur where the minority bound together by concentrated selective incentives can dominate the majority Critique EditOlson s original logic of collective action has received several critiques based either on a different interpretation of the observations on minority interest representation or on a disagreement on the degree of concentrated interest representation Information asymmetry Edit Lohmann 1 agrees with puzzling observations made by Olson which she classifies as economic and political puzzles Economic puzzles are cases of general welfare loss in favour of a minority benefit which is smaller in sum An example she gives is a quota on sugar imports in the United States which generates 2261 jobs at the expense of a general welfare reduction of 1 162 million Hufbauer and Elliot 1994 Then the implicit price for a job in the sugar industry is above 500 000 allowing for significant room for Pareto improvement Political puzzles are cases where minority trumps majority An example she gives is the rural bias in urbanized countries such as the Common Agricultural Policy in the European Union Lohmann claims that Olson s free rider problem is insufficient to explain these puzzles Instead she argues they are due to uncertainty information asymmetry among actors when special interest groups 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 give more weight to their interest representation when evaluating political actors than to the general benefit Lohmann argues that it could be politically viable to focus on separate narrow interests at the expense of general benefits Legitimacy Edit Trumbull 2 rejects the observation by Olson and Lohmann that concentrated interests dominate public policy He points out that historically diffuse interests nearly always found ways to be represented in public policy such as the interests of retirees patients or consumers Trumbull explains this with the role of legitimacy of interest groups that promote policies He argues that diffuse interests have a legitimacy premium when they manage to mobilize while concentrated interests are viewed with suspicion He describes the concept of legitimacy coalitions which are coalitions between state policymakers social activists or industry to promote certain policy By having to form a coalition the interests are more broadly represented An example of such a coalition is the post war neo corporatist system Critical mass Edit Marwell and Oliver 3 use mathematical and computational models to show that a number of the assumptions made by Olson are unrealistic and if they are relaxed the behavior of a system of rational agents changes dramatically One assumption is that the production function of goods is linear If this function instead accelerates then a critical mass of early contributors can encourage a large number of others to contribute Another assumption is that the cost of the good is a function of the size of the group that would benefit from it For many public goods this is not true and Marwell and Oliver show that when the interest group is larger there is a larger chance that it will include someone for whom it is rational to provide the good either in part or in full See also EditBystander effect Constitutional economics Deindividuation Diffusion of responsibility Groupshift Tragedy of the commonsReferences Edit Lohmann Susanne 2003 Representative Government and Special Interest Politics We Have Met the Enemy and He Is Us Journal for Theoretical Politics 15 3 299 319 doi 10 1177 0951692803015003004 Trumbull Gunnar 2012 Strength in numbers the political power of weak interests Cambridge MA Harvard University Press Marwell Gerald Oliver Pamela 1993 The Critical Mass in Collective Action A Micro Social Theory Cambridge Cambridge University Press ISBN 978 0 521 30839 7 Olson Mancur 1971 1965 The Logic of Collective Action Public Goods and the Theory of Groups Revised ed Harvard University Press ISBN 0 674 53751 3 Description Table of Contents and preview Retrieved from https en wikipedia org w index php title The Logic of Collective Action amp oldid 1070853885, wikipedia, wiki, book,

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