Mancur Olson

Mancur Lloyd Olson Jr. (/ˈmænsər/;[2] January 22, 1932 – February 19, 1998) was an American economist and political scientist who taught at the University of Maryland, College Park. His most influential contributions were to new institutional economics, and focused on the role played by private property, taxation, public goods, collective action, and contract rights in economic development. https://en.wikipedia.org/wiki/Mancur_Olson

  • In his first book, The Logic of Collective Action: Public Goods and the Theory of Groups (1965), he theorized that what stimulates people to act in groups is incentive; members of large groups do not act in accordance with a common interest unless motivated by personal gain (economic, social, etc.). While small groups can act on shared objectives, large groups will not work towards shared objectives unless their individual members are sufficiently motivated
  • In 1982, he expanded the scope of his earlier work in an attempt to explain The Rise and Decline of Nations (1982). He argues that groups such as trade associations, business cartels, and labor unions have an incentive to form lobby groups and influence policies in their favor. These policies will tend to be protectionist, which will hurt economic growth; but because the benefits of such policies are concentrated, and their costs are diffused throughout the whole population, there will be little public resistance to them. As distributional coalitions accumulate, nations burdened by them will fall into economic decline. His work influenced the formulation of the Calmfors–Driffill hypothesis of collective bargaining.
  • In his final book, Power and Prosperity (2000), Olson distinguished between the economic effects of different types of government, in particular, tyranny, anarchy, and democracy. Olson argued that under anarchy, a "roving bandit" only has the incentive to steal and destroy, whilst a "stationary bandit"—a tyrant—has an incentive to encourage some degree of economic success as he expects to remain in power long enough to benefit from that success. A stationary bandit thereby begins to take on the governmental function of protecting citizens and their property against roving bandits. In the move from roving to stationary bandits, Olson sees the seeds of civilization, paving the way, eventually for democracy, which by giving power to those who align with the wishes of the population, improves incentives for good government.[9] Olson's work on the roving vs. stationary bandits is influential in analysis of the political and economic order structured in warlord states and societies.

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