The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Collective Action

  • Mancur Olson
Reference work entry


The logic of collective action undermines the assumption that common interests are always promoted by their beneficiaries. Where the number of beneficiaries is large, the benefits of collective action are a public good: beneficiaries will gain whether or not they participate in promoting them, while their individual efforts cannot secure them. Small groups can use selective incentives to ensure that their members contribute to promoting their common interests. This typically results in the paradoxical ‘exploitation of the great by the small’. The logic of collective action helps explain many notable examples of economic growth and stagnation since the Middle Ages.


Anarchy Bargaining Cartels Class conflict Collective action Collective bargaining Collusion Common interests Countervailing power Encompassing organizations Excess burden Exploitation Galbraith, K. Group theory Industrial revolution Invisible hand Latent groups Lobbying Mercantilism Non-excludability Olson, M. Patronage dividends Public choice Public goods Revelation of preferences Samuelson, P. Selective incentives Smith, A. Strategic behaviour Technical progress Trade unions Wicksell, J. 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Mancur Olson
    • 1
  1. 1.