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The Logic of Collective Action: Public Goods and the Theory of Groups

Summary of: The Logic of Collective Action: Public Goods and the Theory of Groups

Author(s) / Editor(s)

Olson, Mancur
Rational, self-interested individuals in large groups need a positive incentive or negative sanction delivered through institutional arrangements in order to provide themselves a collective good; in small groups the collective good itself can be incentive enough for individuals to cooperate.

Disciplines

Economics, Political Science, Sociology

Keywords

cooperation, group forming networks, norms, public goods

Publication Reference

Published in/by
Harvard University Press
Date
1965

Findings

  • Findings from studies of small groups cannot be scaled to predict behavior of large groups; the behavior of large groups is qualitatively different.
  • Business interests are successful in organizing toward a political common good because industries often contain a relatively small number of large firms. These firms benefit from the advantages of small groups more than large numbers of workers or consumers.
  • Many non-economic incentives play an important role in motivating cooperation, including prestige, respect, friendship or other social pressures. This is especially the case in small groups characterized by face-to-face contact.

Common or public goods are those which if consumed by one member of a group, cannot be feasibly withheld from other members. Large groups require some kind of selective sanction or incentive apart from the benefit of the public good itself for individuals to contribute their own time and resources to maintaining a formal organization. The selective aspect of sanctions or incentives indicates that institutions recognize and treat differently those who do not contribute to the public good. Organizations frequently fail to provide public goods on the most optimal scale, because all self-interested individuals try to sacrifice as little of themselves as possible to still gain access to the good. Because groups cannot benefit from fractional quantities of regulating organizations, there is also a necessary minimal cost of maintenance associated with the formation of formal organizations.