THE RISE AND DECLINE OF NATIONS: Economic Growth, Stagflation, and Social Rigidities.
The Logic: * Mancur Lloyd Olson, (* 22.12.1932 in Grand Forks (USA); † 19.02.1998) * "The Logic of Collective Action" in 1965. * "The Rise and Decline of Nations" in 1982. * "Power and Prosperity" in 2000. * Primary concern: provision of public goods e.g. law and order, defense or pollution abatement that is provided by the government goes to everyone. * Assumption: If individuals in some category or class had a sufficient degree of self-interest and if they all agreed on some common interest, then the group would to some extent also act in a self-interested or group-interested manner. * Paradox: The paradox is that large groups, if composed of rational individuals, will not act in their group interest * Free riding * Individual incentives. When the cost of individual contributions to collective actions is very small, the individual has little incentive to investigate whether or not to make a contribution or even to exercise intuition. * Deficit of public goods. * Size of groups; * Small groups. * Large groups. * ‘‘exploitation of the great by the small.’’ * Compulsory Taxation * Why Compulsory taxation? Something other than collective goods must be provided by governments and other organizations to account for their existence. * Selective Incentive. “only a separate and ‘selective’ incentive will stimulate a rational individual in a latent group to act in a group-oriented way” * Negative selective incentives * Tax payment * Labor unions which are mostly obtained through union shop, closed shop or agency shop arrangements. * Picketing (informal arrangement) * Solitary confinement. (The harshest legal punishment. The censure of those who fail to bear a share of the burdens of