THE LOGIC OF COLLECTIVE ACTION Public Goods and the Theory of Groups MANCUR OLSON Harvard University Press Cambridge « Massachusetts London » EnglandIntroduction Iris often ken for granted, a eam where economic cbjectives ce Involved, hat groupe of indiduale with cannon interes tsully sterpt to further thane common interete Group of individuals wid common interests are expected ac on behalf heir omen Interests much as singe Indviduals ae chen expeaed to act op [elf of ther penal interes. This opinion abou group bebevier is fequendly found act only in popular dxanions but ale in scholarly wertings. Many economists of diverse methodol] snd Ideologial wadions have implcly or expily acre This view has, for example been important in many theories of labor Unions ia Marian there of ela action, in concept of "ounter ‘allng poses” aed in vaiour dicundone of economic iauutons Teas in addson, ocupied a prominent place in poll science, 2 leas inthe United States, where the dy of peste groupe hat been dominated by «celebrated “group cheney hated on the idea that groupe will az when necasry to farther thet common or group goals. Finally ic has played significant role in many wel Enowawoiogeal studs. “The view thar groupe act to serve thee interens presumably is ‘sed up the assumption thar the individuals im groupe act oxt of at ners. If che individual im «group akriniclydaeparded {heir penaal welfare, i mould not be very Ukely that collectively they Would seck some selfs common or group abject, Such slrism i, Bowever,comidred exceptional, and elintereted be: favor ic uelly thought to be the Tul, at leat when ecooorse lssues ae at stake no one is surprise when individual businessmen seck higher profits, when fnivdeal workers neck higher wages, or ‘when individual consumers sek lower prices, The idea that groupe fend to st in seppet of sei group interes i eupponed to alow Toga from this widely atecpted premise of tional self intreted bechavos. In other word if the members of some group bave a common inert or objetive and if dey would all be beter of if tat atjective were achieved i hasbeen thought to follow lgieally thatthe individuals in chat group would, if they were rational and sebintrested act to achiew that objective ‘Bu i ic mot in fae tve thatthe des that groupe wil acti dhe2 The Logie of Colleioe Action velintret follows logically from the premite of radonsl and vl: Sntereted behavior. I does nor fll, because al ofthe indvidvals js group would gun ifthe achinved thelr group abject, thet ‘they woul aettoahiee that ebjective even if they wee all ational and telinteeed: Indeed, wales the numberof individuals in 2 _group is quite small or unless there i everon o ome other special ‘erie wo make individuals actin Weir commen ire, retinal, ‘efintremed individuals aril not act to ahieve Hei common oF soup interes, Ta eter word even if all of the indvidale in liege group are ratonal and selfs, and would gain if 8 2 _roup they sted wo achieve tei common ier ot ojesve, they ‘lla ot voluntarily act toachiere the common or rou inert, "The notion thet groupe of advidcle wil act to achieve their com smoa or group ineress, far kom being 2 logical implcaton of the ‘eumpton that che individual in a group wil ronal father their individual incre iif icone with tat atmo. "This incoasinency wil be explained in the fallowing chapter Tfthe members of a lage group eaionally seek to maximize chet pesooal wellae, they will nor act to advance ther common oF soup objectives uns there is contin to free them to do 1, o¢ tls some separate incentive, divine fom the achievement of the fenmnmon or group intern, i oflered to the members of the proup individually onthe cndiion tha they help bea he cos or burdens involved inthe achievement of the groap cbjerves. Nor wil ac laige groups form orgenizaions to further ther comamon goals in the abrenr ofthe concon othe spate incentive just mentioned, “These points had rue even when there unanimous sprenmest io {roup about the common good andthe methods of achieving "The widespread view, ese thrghou the social science, that groupe tend to urher thir interet, acordngly jue, a dear when itis bate. ait usally ion the («mete implicit) ssrumpeion that groups act in ther elinterest because individuals ‘do. Therein peradonialy the lial pombiity hat groupe con posed of ether alii fdvidual of iatonsl individuals may Sometimes at In their common or group interes. But, a ler, cmpiricl pars of hs dy wil temps to show, thi logical posi tity i usally of ao praia impure. Thus We ety view {hat groupe of indvidals with common inteet tend to further ‘ove common inure appears to have tle if ay merit Introduction 3 [None ofthe statements made above Fly applies to small groups forthe siorton in small groups ie much move complicated. Ta small group there may very wel be sone olonary action in fap- por of the common purpose ofthe individuals in te group, bat fe rmow cue th action will cave before i reacher the optimal level forthe members ol the group a8 a whale Inthe sharing of che cous of effort achieve 2 common goal im small group, there i= however a supsing tndeacy fr ue “explotaion” of the greet bythe mal "The proofs of al ofthe lgiat urements thar have been made shove ae conidia Chape which develops a logieal or theorei- Cal explanation of erin atpeat of group and argerzationlbehar- Joe, Chapter Tt examines she implitions ofthis sala for groups of diferene sis, and iluteate she conlsion thet fo many cases fall groope are more ecient and viable thn large ones. Chapter I comider the apleatons of the argument for labor urons, snd draws che conclron theme form of compolory member i, in most ceunatancs, indpensbe 1 union survival. The four Chaper uses the apprcach developed in hs sudy to examine Manes theory o€ sil aes and to analyze the chores ofthe stare de eloped by some ether economia. The Ath anayaes the "grup Theory” wed by many poll sentint in dhe Uighr of the Topic elaborated in thi stad and argues that that theory a tually unde. ‘nond is lilly incoainent The foal chapter develope & new ‘hexy of peste groups which i eousicent wih the logical ele ‘onsipsoudined in he Bret caper, and which suggests tha the rmenberthip and power of large preturegroup organizations does ‘ot derive fom this lobbying achievements, but it rather a By reduce oftheir other eter. ‘Though Lam an ecosomist and the tol of analysis used in his book are drawn from economic tery the eoncuion ofthe ay seas relevant tothe sexilogit and the political seas 8 they ae to the economist have, therefore avcded wing the dingammatic= mathematical language of economics whenever faible, Units ‘atl, many noneconomise wil find one or two brief pa of the fic chapter exprened in an obscure and unongenial way, ut all of the et ofthe bok shouldbe perfectly len. whatever the reader Sacilinry background,I A Theory of Groups and Organizations far meee ene Sie mos (ugh mean al fh nen yon valli det dtp So tiple cn erpein senate === The gi plea tag any seat of rnin THe pee poner atl ope tal apt intso Sei sot sn epeleton a et ‘See tun her he nye perp at wad Fe ee ee | ‘habe dance non ofan, tl see pel ipa stietan coe spe to | Me hence rth nenber Te old tom cbr Leet mere ratesce een pron Soy enolic fw abe hs er od Saks ny Fendi eup yee of hades i" 1 Eeanomiats have for the most gar neglected to develop theres of orpenine i Sense ste aera Erie ara hear tees ‘Gran sud Ifemain” nt Caciae Proc 2M, The Com, i; Seratiiors cae pe eerie ' NS eee se | ee hig ote ee ee hee et Be aca ed cs a ; Shee, eae ] echo 50 foe Sl a ie en ee "Kenneth oslling, "The Crpeizatoal See cee Harr ! sche te erg tees mens ea eet ag * PELICULAS SL Ta ont Oued neh PE‘ “The Logie of Coles Acton Bs expanization oiea pith i chey do nshing to further the interet of thei members, and this actor most severely iit the umber of ergcizations tha alto verve their member. “The idea tha orgaizaons or asocatons ext to fanher the intrest of ther mentee hardly novel or peculiar wo economies, it ges back at lean to Arial, who wee, "Men joumey together trith a view we parcuae advantage, and by way of providing some Fartcular thing needed forthe purposes of lie ane similarly che Poltal aseciaon scems to have come togcher ginal, and to ontinue in exitence, forthe wake of the general advantages it byings”® Mote rcemy Profesor Leon Fees, a socal pycholr {pointed ot the the snraction of group members 2c 0 Truchin sec: belonging, bot nthe in staining something by means (ofthis tmemberaip.”* The Inte Harld Las, «politcal cients, took it for granted tha "ssccntione exit 1 Gall purpeses which 1 oup of ten have in common."* “The kinds of orgasisstlons tha are the focus of this uly ate expected to forthe the iatesens of hee member Labor unions are ‘xpected to arve for higher wages and beter working condition: for their members; farm organizations ate expected to ave for favorable leglaton for thr members als are expected {for highee prices for paripaing firms; the corporation is expected fo fate eine of suki ood teen expe win Cuneta Aa oar Bane Bs Mow, Bane BEN nS SA common ann Se As Sy 88) 5 wee ee eden toe oper {Site a ely slog Dt an coms oan puns ed et Sieg heme ce onc wht SKN Wehr el tester orb ed» go aaere ca ‘Sued sane grr ooh the "comarca (Steal tat ent nnn a ne ay Se Wee pe TEESE Gece Co alee Sed py Ne fk ha ty $e Bas o8) Tac eh ve Sea teed eh ‘Sin gins ose npn te ey Bo er Sra im mena Tha up Shes ot blow the erate ge of shoe spe win Sl et er” oe pao SOLER TY Sma ages er A Theory of Groups and Organisations 7 so lure the commen intr fice (oh in hs maton tegen hr nd abr pr ‘Nod dt the ire tha lof thea vee pet of ong salons ate expected to fer ae forthe west par common Invert the unisn suber common intrest higher wap he {erent commin nen inverse tl mee common lnereia higher pris he sekbold’ common erst {nhighe Gridens and oak pies he tien? commen nee in fed goveoment. fs oe an ste tht the ere pero Sxpaecton ited real sepa to eck pay Torte ommon interes otheit menor: cy pes edd ieren an be sane and only nvaatd tot clint by {nda uocgiaind acon, There abveul, mo purpose te ‘ing a ogttenion whe india orga ton con sxe the ees ofthe Invidal etme ee beter han an argentine wel, fo exe, no pin ong a cxgniation gy to play wae But when 2 mune of inde ‘iia hove aconuon of cleiv lott—when they share + {gle pp o diese indiadiahtnorantand aio (we Sill ona) wil eer aor be see Simoes dat cannon nee alo il et be ale to advance tha se seul. Gra a hhc gsm fon wa ee cmon cpap intrested thogh srpacaion cen lo sere psy fon indice ire ht carers ad Frimary func so advance the som irene of ong of Eaves "The setmpion shat npn epic exer wo fuer she common inert of gros of people ingbc in nt of the inert ster enantio snd to ofthe wrt andy ced te his asrpe erp’ Hareld Lai pba that op Eeaions eu hee pupae er interes chs gop of en vein come” and Aas sparen ha arson ‘ind mien be argued tha poled swciatons ar ceed nd ‘Baatlned lecuse of the ener sGrercge?™ they bring. RM ge Ee w Sage meet of ti fom i moe Sree, Sy pau oe ua ade! eos ok ESE SST See mtn pe ue5 ‘The Logie of Calecive Action sine bmn ly "or Teenie beret te PEL ENLeTE cee at J We omit aetloat sey mera rege era Giese ya ereabeaee pap alee a sre es St ee i a ak Sean cerning as ita ee at Semis ia aietetice rate tle sn smn scutes aes ages iat ere tela tele kere Eee Seis Stating gn ta Settee ete eee geatasgemine inate snes teem ten Aaa ei ie of Comme Ces By ini Pe eciives Ye, tied ke a SH me eh ty Ess SRE reas retire oem momen emo SrietTanaemton ta ce tena er emt Sigone a anges np These ew Sy tic these me ep SETH a aie ec wo ‘neat ‘a tee t A Theory of Groups and Orgeniations , B, ruaie ooo AND Later ono “The combination of individ interes and common tere in an organization suggetan analogy with acompesive market. The firme ina pertecly compeiive indurny, for example, bave 9 om son incest in higher price for the indusay’s predac Since wunlfoct peice mtn prevail in sacha marke, a Bem cannot expect 2 Ligh pace for uel uals all of ce other fers in the industy 0 Ive thi igher pric. Buta rm ins compere mavke io hae an crest in ling as much ai an, unl ee cov of prodaing 2 coher uit exes the pice of thar ci In thin there eno commen Scere; each fire's interes i diuety opposed wo that of every oter fas, for the spre caer Eros sl the le the pice and ncome for ay given frm. In shor, while al fms havea ommon ines in higher price they have antagonnic interns where outpat it concerned. This an be iltsated wath a simple mpplyanddemand tmodel Fr the sake of a simple argument, assune Uist + perfectly competitive indasuy i momenusly in 2 dveqliriam poston, with price exceeding marginal cot for all rma thei preset out. ppt Soppse, wo, tha all of he adjament wil be made bythe rms aleedy in the industry rather than by es entrants sod that the indusy is oa an inclanie portion of te demand curve. Since rise exeeds marginal cos or al fms, output wl nereie. But a8 {firms increase production, the price falls; indeed, since the ine ‘dui demand curve is by assumption inelae, the total vevenbe (ofthe indy will decine. Apparenly each frm fade that with Dece exceeding marpna eu, pays to neene ie output, but the ‘eu is thar each rn gets amalr prot. Some ecw a a ctr day anny have queso ti cel! but he fc hat poi ‘masiizing Brmsin a perfec competitive indusry can at entry totheir interest ara group is tow widely undertood and acepted™ A groupf poftmasimising Brn an act dace thei aggregate ris becebe in perfect competion each Km iy by definition 0 vl hat i cam ignore the effet of is ourpuc an price. Each firm Fr i to its advanage wo increateeusetto the point where mae. 12 Se JM ck, The Roam of nr ote (Chi Vn a ‘ies hon i} ed a Rage Ba, Una Pt (Gen, Hehe iin yo SE ieee ia min, (Ca Ma» The Logie of Colecive Acton ml con cq ple and eo ignore the ees of i extra ouput on ‘Ee poston ofthe indo. Ite tha he et eu ht al fate worse eb das dot at mea ha erry Be hat trained poi t's frm, forencing the fal in pie veuling ‘Bom the incre a indy op were rete ooo iC ould lve more then ec fr pie wo fll quite a teh nny ae and would have amar curr st well A frm in 3 peseaycnpeaive mack get ely smal prof the bene (or {Tama share ofthe iodoury exe evete) snug from + {ebcio in that Bem’ corp For thee reson now general wndersood that if the ims ina indiana we onansing prise pros for he ody at 2 whol be kasha they ght obervise bel® And almost ‘reryone woul pres hat dhs hort coniuin es the ce oe ‘talkes daracsted by pre compen. The import pit is thats uve besae Dg all the Bre hav aceon interes, Inv higher pce for the indus’ rod si the teres of ‘Bch that the oer rms pay he atin er of he ecsry Tedacon in ouput needed to obtain a bigher pce “Alou th al hing tat kp pices fom fling in cordance wih he pow jan dened i prey compete mares aude lntevenion Goverment pie appre, cat agre- tbeny andthe ke ay herp te fre in # compete rake om wing cote voter trons: Such adr interests is Gur common is then important sk how ic cames abut How GEES atnpeicveindonry eben goeramentasisance in ma tiniog the pice oft prc? Conier hypothetical compete indunry, and soppse that smo athe pode ne iny dee 3 i, prceuppor frogreny rome ter governent inervetontoineese tbe re Eetics produce To i any nth anianc rm the goverment the produc inthis indy wl presmbly have to ogee = Ting ception, thy nil hae to become an aie presre pov. Ths libpng orgenanion may have to conde = eon 10 Fs fli of i gute Mate hr. Del ‘ami rome, LENO Chef 93) (TE Ge a yaa sete he ane See Pc! Pw, A Teny 4 Grup end Ormesins = sei moi iat cic emer 4 Aion of onc wile equted™ Pa elton expr be eel ln npn nl ae wey ay 8 Seer Pete oper pay ci $2 Senos tu mag he ne bs dlc te idan, and to gt tren te Sndy wre iw angrier eee she alee un omc paca dae Sind ne. ee iy ae ewe he bln precy feed lle a he lp hn ea sa oe nS fl eu a ra jr peti dn en i psd a Imig ge nef ep a ir i in aie te pres want hae per ef eed ete eddie Se of til pola ate ty ts ha ag Comin hs i oy hexane Celine tio togerap ft toe mat Sha eo ste te nd te rnd id luo oa wees wet wr sods de ppl popes win tht ne (hops wa mg a het Mitch ge Aihowr Kpelle lp leben one san SMS Shaner ha ge reeres TAA er cn ou i nn Seacoast ie Lae cae ae Gis Linares oh Sonoran wi erates ae Ue a Ao on2 ‘The Logie of Colecive Action sone practical importance. There ace many powerful and well ‘Faunce ebies with mast rport in existence now, br these lab an ongantzatons do no ge: that seppet because of che Hire ‘chiorements The mom powerful lbbying organizations now obtain ‘hed fond and ei following for be eons, ater pat of his ‘idyll how ‘Soe tice may argue that the raonal pecton with indeed, “apport large gunization ike 3Tebbying organization that weet BiEriiceres because he knows that he dows nat, fer wil 0 {do so cider, and then the ogasiation wil fail sod be wil be ‘pihout the bent tha the organization could fave provided. This ‘rfumenr shows the eed forte analogy wit he petal compete 2 rarkee For ie woul be gue resonable ro argue tha prices Sh neve fall below the levels a moaoply would have charged in pera conapentine rane, because i one frm jcrered out other firs woul alo atthe pie woud fall; but each Gem PO Loree this oie would net arta chain of picedestoying rae eure cy doer nt work out this way 1D 2 Cnpentive market; nor ia ge oegaizatin, Whea the sorbet SE hoo raved ie large, no ane wil ace the elles om price it he frm inereses its oui and sno one will change his plane tecaue of Simla, in lage orgaizain, che los of one dt oper all nee notably factese the burden for aay ether one Sus payers and 4 rtioal psson would not believe that i he Sree wihdeaw fromm an organization he would drive others so tow. “The foregoing argument muse tthe least have sme relevance 10 cecoonaic engantzatons that are manly means srough which ia ‘Shuts seerp eo bean the sane cings they obtain shrough thee ‘Waves in he market Labor unica, for example, ate organizations ‘ugh which workers seve to ge the sme things dey ge with ‘hdr nivale in the markeshigher wage, beer working ‘Madions and the ike Tt wood be aang indeed if he workers Sor coniont some ofthe sme problems inthe union tht hey thew in he marker since thi ers in both pees have some ofthe ‘me purse. owerersinilae the purprer may be cites may cet chat a nse in organizations a oral He those in makes. I ora ‘Peto anemonl or idelogeal clement i often alo involved Boar this make the argument offered ere practically irelevast? A Thamy of Groep and Orpnomions 8 mao pore rp of rezone atonal tell sere tot ejecton. Paani poaby te ge a Coons neo ieee dep ere Se Ts Stein mie cle thy age of ssa, Many ton rr See iin me poet gy a eco commie, wel ahem rage. func: an! ets Tee toys ey ach ovil wore of mgr a ey import enol. ‘mo aay governs namely Eee ee cen hace vad ona prove ree of I ceed ‘anomie th fro poo, the appa of ‘ttc! toy he bond fa conaten clad ie ‘Een hess of aw an ed no se ate in skin hirry hay ben ale o oppor ol though roknaty A mos Plane a mt ce Shui oreo em fons sete Tom cane ESOT een a thr cy i a erin death ok TE ey wih all of he eal vues 2 command cin oe ba i a rath cmp it would sem Ole pve raining Se cig gee te aie i te ps wae invert steno arabe to make the nee crbaons velo “Theron hse canst ii uty do payment send See Tae Beso rt ae pe Dk Loe tomas ae 1 REL smi oem reaped on swine ba os ed ie Se Bim neers Eos Sane aaeess ceca rycen. mem em eee eesSe BI ry ‘The Logis of Colleive Action ve rly ca ons to sagen rn a ef one impor ree fe he ger i a nan oh ee Pon scoaic renee alte onary AP USee TRU Geen eEE LE en open cds gn eal 2 yee bem Se tie inked tere pole, t deny Se ce te io ear be STE TSO Py See ee oe Seay ie on a Scere! a teary el pe eA SRe AE SeeEEA EEE Se eso esa A Se oer tht gr Tn ete fers tacoma Sane ean ds oben on ff mn ar ccnp sabotage ee ‘See gnats pow: cc ay et i wale mr tel eben Mare cy fe ay ce min pt se vn eeting Se ple mame Sead eh tutctaraaes woe cos font ae Shee Mie re ed Gene else pnts roduc rpmieton o l Bs Tian net Bh pene ‘aire avon denny he ale nen este eee eden ls Fein if ‘ns “ on aie aed TN SS ane te Sella ot bee, oon ak # mY Seni oe eee icra wos Sane ame wrt nr cma ee auied here dopey» bay sce of a A ey pees af be ge fe © Hd A Theory of Groups and Organisations 6 cer words, those who do not purchase or pay for any ofthe pic ‘or coletive goed cant be excluded or kept from sharing fa the ‘onnumptin of the good, they ean where nonelstve goods ate concerned Sale heated a eee ares ine eg pa a oped aoa re Fear harepeare emai oye ni Spel mecaerh niet cee at bea aterm et Soe a Sagmeister nei en eed eg eee eet Simei, caine scsi nee init fpetochsiabymrapuels sam ack iiiatcacbicwarstrgteecs me ine ptt Scr geome ee pi ma ela een ii ireiampanpe teeta Spun pote emer asses See eae pee pi ol rapes yay an og eter at he ae SPSL nie a pg ea Eee pene ial Sede," ey of Pic Eon” "amma Be Bai Thee ree Seamer eee Sia coe oe eee Broun es “Theory of Pin Expeniurn" vat af the Ameren Aude of Pace end ‘Soy tat muh nt tomer fhe deol oe pd ‘BUS Maer Eoyrp ote Sa oe,6 ‘The Logie of Colecive Action spanner pink hak sesh tent rm ect eet SNe eerie ees SE OES hoe cine Series eae eso Enrarcauiivncaames fred abe ity rer Seance ante eee wan rv i ede satan ems cee te conti Seberaihsatraas arama eteis Sneed geiarogine foo al acer pepe rear mucha tfanee: sic Serehiaahtinc mnths kre saree bee ahi pare pareesn nena js 2 traditional theory of group behavior that implicitly seetoez ten ae tat Srimetianiitesaaeh ii ee tartare son carnanat ames nono Nee eta eee come pte Fost hatind et ao one ee Cer dard es paren ca Tapas Gaus Nga oe wae amma nua ete po Bg din Oyen of “ma Sothern td Bog, Pree of acer eae oe eT eta dy te ys meal rc mes. Repel SE tae a nl ru we A Theory of Groupe and Organisations v treme thee dilercatvews. Sil. he varios exponent ofthe ‘alto! undernnding of gous do have x comin ron “roach de ne po sy oe Xe ompeat here ina laa way oa gle ona ey, er dininina eew bpetn tet ae aan the cava ara and the focal rain a father view tha pve organ pare whiguious sed th Gr ehay ido 8 popes toler ad jan anton Aa the tog and hog whee ea ‘Thi "nsna to Spies he ene ed Gn et ‘shdvises. hts within ages ad scat ard tod, emis phelyeafics”™ Arete may have hed se sind when hed th man wey hn dcr sed in Cenaay by Gong Sina in cae he dic of soll Hecate td a Aes Ahr Beye ct Xterra scene!" Thani joing Node or prepenty fe the haere i ight enaly i re "he tral vt he elo so copes nivel of groups, bot dcr ne ‘eden tof poop tad Ss and group Baton of te proce freien of modem inde wees Sei the preceded them begs wih ngropeso ual hat exch the yy 2220 spec of the of the “primitive” fact cat "primary Pee cera 3 Mae Sepa, Docaray in dma Oe Yat ee