The Logic of Collective Action
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.
Overview
The book challenged the propositions that if everyone in a group 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. It 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. Without selective incentives to motivate active participation, collective action is unlikely to occur even when large groups of people with common interests exist.The book notes 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 marginally less per capita. 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 can dominate the majority.
Critique
Olson's original logic of collective action has been critiqued from several perspectives.Information asymmetry
Susanne Lohmann supports the observations of Olson in observing the economic puzzle of general welfare losses occurring in favour of smaller minority benefits, noting that the U.S. quota on sugar imports generated 2,261 jobs while reducing overall welfare by $1.162 billion, such the implicit cost per job exceeded $500,000, a highly Pareto-inefficient outcome. She further notes that a political puzzle arises when minority interests override majority preferences, as in the rural bias of agricultural subsidies, such as the Common Agricultural Policy in the European Union.Lohmann argues that Olson’s explanation based on the free-rider problem is insufficient. Instead, she attributes these outcomes to information asymmetry. When agents evaluate political actors, they place greater weight on how well their own specific interests are represented rather than on broader welfare gains. Thus, it may be politically rational for politicians to privilege narrow interests at the expense of general benefits.