Showing posts with label free rider problem. Show all posts
Showing posts with label free rider problem. Show all posts

MANCUR OLSON AND THE DECLINE OF NATIONS

The last days of Rome.

by Mike Newland

Why do great and powerful nations which appear unbeatable decline and fall? One might immediately conclude that they are simply overcome by the growth of inevitably superior forces despite all the advantages in resources which being powerful has brought them.

The best known example is Rome which enjoyed extraordinary abilities in organisation and in the technology it could apply by the standards of the day yet still collapsed.

Mancur Olson (1932-1998) was an American economist who addressed this question from the point of view of how things work in societies as a result of the formation of groups pursuing particular interests. How do incentives to combine together in self-interest affect what happens? See his book "The Rise and Decline of Nations."

The virtue of democratic government at first sight is that any group which feels itself disadvantaged can form a coalition and lobby to improve its position. That is certainly the version of democracy purveyed by politicians on the stump. It’s in principle correct if you ignore the obstacles placed in the path by a system protecting its power interests against interlopers.

But there is a paradox here, Olson argues. It is logical to think that if enough people are discontented and agree on a common interest that they will act in concert and influence how things work. In reality they often do not.