The Logic of Collective Action and its Implications on Economic Development and Policy; an Explanation of Olson’s Theory

Mancur Olson’s groundbreaking work, the Logic of Collective Action, has been influential in economics, political science, and sociology since its publication in 1965. Although starting from the public choice’s assumptions especially methodological individualism, he takes into account the impact of institutional factors on individual behaviors and actions. Thus, group action should be analyzed as the resultant of the relations between individuals and institutions. The Logic of Collective Action is the basic theory of Olson’s further comparative works on the different economic development experiences. Success or failure in economic development and policy in a certain society, from his viewpoint, is partly dependent on the relations between state and interest groups. In this paper, Olson’s theory and its implications on public policy and development are discussed.