Olson, Mancur (1932–1998)

Mancur Lloyd Olson Jr. left a large footprint in several social sciences, though economics was his base. His application of economic thought to nonmarket phenomena earned him attention and respect in political science and sociology. Olson's intellectual progress began on a North Dakota farm and in a one-room school, and from there to the University of North Dakota, Oxford University, and Harvard University. His teaching and research took place at the U.S. Air Force Academy, Princeton, and finally, after a stint in government, at the University of Maryland where he was Professor of Economics from 1969 to 1998.

Olson was the first to offer a rigorous treatment of the collective action problem, which arises when people have to contribute toward a common cause. His conclusions challenged the prevalent assumption that groups would form effortlessly to advance the common interests of their members. Olson observed that individuals have an incentive to free ride on the contributions of others, especially as the size of a group increases. This logic spawned an industry of scholarship in economics and political science. Olson later drew attention to the potentially detrimental role of narrow, vested interests (such as those of industrial lobbies and other organized political forces) on the economic growth of nations as these groups prevailed over broader, less-organized societal interests.

Olson was a leading member of a cohort of social scientists that emphasized the importance of institutions[Page 1084]for economic development. This approach, applied to political institutions, led to a discovery (jointly with Martin McGuire) of the “invisible political hand” that leads even an autocratic ruler, as long as he has longterm encompassing interests, to implement sound policies benefiting the economy and society at large. Olson also showed, however, that rights-respecting democracies have prospered even more. How to become such a democracy was the question Olson was working on as he coined the term “market augmenting government” shortly before his death.

Olson was never content with being an ivory tower scholar; he sought to put his ideas to work and made them available to policy makers, reformers, opinion leaders, and civil societies around the world. To promote this focus, Olson launched a research and advisory center at the University of Maryland, known as IRIS (Institutional Reform and the Informal Sector), that has built on and applied his ideas in hundreds of projects worldwide.

Olson's application of economic reasoning to public choice, institutions, and institutional change are his most lasting contributions. He is still one of the most cited authors in the rapidly evolving social sciences. While some of his sobering conclusions countered the Panglossian faith in good outcomes of economic and political processes, his personal enthusiasm, integrity, and energy complemented his realistic—and at times skeptical—outlook of the consequences of unchecked interest groups. Above all was his faith in the value of research and public awareness that motivated his relentless efforts to bring prosperity and stability to dozens of less fortunate countries, from India to the former Soviet Union.