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Foundations of contemporary economics: Mancur Olson and collective action

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  • Henrik Egbert
  • Teodor Sedlarski

Abstract

Mancur Olson (1932-1998) became famous with one great idea: the failure of collective action. Since interest groups provide their members with public (collective) goods with corresponding externalities, he assumed that free riding as a rational individual strategy would be a ubiquitous problem hampering the realization of efficient collective action in the provision of such goods. This remarkable idea – the application of methodological individualism and the assumption of rational individual behavior in the analysis of interest groups, provided a fertile ground for theory building in all social sciences, most notably in political science. In the field of economics, Olson’s ideas contributed to the establishment of the Public Choice Theory and became a prerequisite for fundamental research in experimental economics – on public goods, voluntary contribution mechanisms and games such as the prisoner dilemma. The present paper briefly discusses his two best-known books.

Suggested Citation

  • Henrik Egbert & Teodor Sedlarski, 2021. "Foundations of contemporary economics: Mancur Olson and collective action," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 126-134.
    • Handle: RePEc:bas:econth:y:2021:i:4:p:126-134
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    References listed on IDEAS

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    1. Chamberlin, John, 1974. "Provision of Collective Goods As a Function of Group Size," American Political Science Review, Cambridge University Press, vol. 68(2), pages 707-716, June.
    2. Martin C. McGuire, 1998. "Mancur Lloyd Olson, Jr. 1932-1998 Personal Recollections," Eastern Economic Journal, Eastern Economic Association, vol. 24(3), pages 252-264, Summer.
    3. Dixit, Avinash, 1999. "Mancur Olson--Social Scientist," Economic Journal, Royal Economic Society, vol. 109(456), pages 443-452, June.
    4. McLEAN, IAIN, 2000. "Review Article: The Divided Legacy of Mancur Olson," British Journal of Political Science, Cambridge University Press, vol. 30(4), pages 651-668, October.
    5. Henrik Egbert & Teodor Sedlarski, 2019. "Foundations of contemporary economics: William Baumol and entrepreneurship," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 109-117.
    6. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
    7. Teodor Sedlarski & Henrik Egbert, 2016. "Foundations of Contemporary Economics: Alexander Gerschenkron," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 133-141.
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    More about this item

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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