Collective Action

Olson's Problem

Before Olson, most social scientists had assumed that the relation between individual and group interests was unproblematic, that people with shared interests acted to further them. But for several decades, economists had argued that coercive taxation systems were necessary, because rational individuals would not voluntarily contribute toward the costs of public goods such as military defense or infrastructure such as roads or other public services. Pure public goods have two characteristics. The first is nonexcludability or “impossibility of exclusion”—if the good is provided to any members of a society, everyone will have it. For example, all people in a geographic area breathe the same air, regardless of whether they pollute it or not. The second characteristic is “jointness of supply”—the cost of a good does not depend on the number of people who share it. A lighthouse has jointness of supply: The costs of building and maintaining it do not depend on the number of people who use it.

Drawing on this economic literature, Olson argued that any group goal or group interest evoked the same problem. If the benefits of collective action cannot be withheld from noncontributors, rational individuals are motivated to “free ride” on the contributions of others. Even if a group has a common interest—for instance, workers with a common interest in the wage-enhancing properties of a union contact enforced by the threat of a strike—each individual member has an individual interest in gaining the benefit of that contract without paying union dues or striking. This divergence between individual and group interest increases as the size of the group increases.

This situation is the noticeability problem—an individual cannot make a big enough difference in an outcome to compensate for the cost of making the contribution. Olson argued that collective action to provide collective goods would happen only if actors were provided with what he called selective incentives, side payments made to those who participate in the action.

Olson's theoretical argument that common or collective interests cannot logically be the motivation for collective action has aroused theoretical debates about the relation between nonexcludability and jointness of supply, as well as about the “production function” relating inputs of collective action to outputs of the collective good. In many contexts, actors can indeed make noticeable contributions to a public good, contributions that affect many more people than themselves, and in which they can rationally calculate that their own benefit from the action is worth the price. Rationally, people should not care that other people also benefit. They might engage in strategic gaming to decide whether they can expect or persuade others to contribute. Such interdependent and strategic decision making, however, yields more complex results than Olson's simple assertion that collective action is “irrational.” In addition, selective incentives cannot logically solve the collective action problem: Paying the cost to use incentives to motivate others' action is, itself, a form of collective action.

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