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 verses diffuse costs.

The book challenged accepted wisdom in Olson’s day 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.

The book argues 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. 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.

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 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.

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 can occur where the minority (bound together by concentrated selective incentives) dominate the majority.

Futher reading:

Philip G. Cerny, "Globalization and the Changing Logic of Collective Action", International Organization, Vol. 49, no. 4 (Autumn 1995)

Brooke Lichtenstein, "Review of The Logic of Collective Action", PSC 129, Febuary 24, 2005

Bibliovault.org, "Table of Contents", Harvard University press