Mancur Olson

1.1. Birth and Early Life

Mancur Lloyd Olson Jr. was born on January 22, 1932, in Grand Forks, North Dakota. He grew up on a farm located near Buxton, North Dakota, which is close to the state border with Climax, Minnesota. Olson stated that his given name, Mancur, was a common name in Scandinavian-immigrant communities across North America, believed to be a variation of the Arabic name Mansoor.

1.2. Education

Olson completed his undergraduate studies, graduating from North Dakota State University in 1954. Following this, he was awarded a Rhodes Scholarship, enabling him to study at University College, Oxford from 1954 to 1956. He later earned his PhD in economics from Harvard University in 1963. During his doctoral studies, he also served in the U.S. Air Force for two years, from 1961 to 1963.

2.1. Early Career and Public Service

While serving in the U.S. Air Force, Olson also held a position as a lecturer in the Economics Department of the United States Air Force Academy from 1961 to 1963. Following his academic and military service, he transitioned to a role in public administration, serving for two years as Deputy Assistant Secretary of Health, Education and Welfare in Washington, D.C..

2.2. Academic Career

In 1963, Olson began his academic career as an assistant professor at Princeton University. He later joined the economics department of the University of Maryland, College Park in 1969, where he remained a prominent faculty member until his death in 1998. Throughout his extensive tenure at the University of Maryland, he continued to develop and refine his influential theories in economics and political science.

3.1. Theory of Collective Action

Olson's foundational theory on collective action is primarily articulated in his first book, The Logic of Collective Action: Public Goods and the Theory of Groups, published in 1965. In this work, he posited that incentives are the primary drivers of group behavior. He theorized that members of large groups, unlike small groups, do not naturally act in accordance with a common interest unless they are motivated by personal gain, which can be economic, social, or otherwise. While small groups might effectively work towards shared objectives based on mutual interest alone, larger groups require individual members to be sufficiently motivated by distinct personal benefits to contribute to a common goal. This perspective significantly influenced the development of public choice theory.

3.2. Theory of Economic Growth and Decline

In 1982, Olson expanded upon his earlier work in The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities. In this book, he argued that various special interest groups, such as cotton farmers, steel producers, and labor unions, are incentivized to form lobby groups to influence government policies in their favor. He contended that these policies often tend to be protectionist in nature, which ultimately harms broader economic growth. However, because the benefits of such policies are concentrated among the specific interest groups, while their costs are diffused throughout the entire population, there is typically little public resistance to them. Olson concluded that as these "distributional coalitions" accumulate over time, the nations burdened by them will inevitably experience economic decline. His insights from this work were influential in the formulation of the Calmfors-Driffill hypothesis concerning collective bargaining.

3.3. Theory of Government Forms and Prosperity

Olson's final major work, Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships, published posthumously in 2000, explored the economic effects of different types of government, specifically tyranny, anarchy, and democracy. Olson argued that under a state of anarchy, a "roving bandit" has an incentive only to steal and destroy, as they have no long-term stake in the productivity of the territory. In contrast, a "stationary bandit"-which he conceptualized as a tyrant-has an incentive to encourage a certain degree of economic success because they expect to remain in power long enough to benefit from the ongoing prosperity. This stationary bandit thus begins to assume governmental functions, such as protecting citizens and their property from other roving bandits. Olson viewed this transition from roving to stationary bandits as laying the "seeds of civilization", eventually paving the way for democracy. He argued that democracy, by granting power to those whose interests align with the wishes of the population, fundamentally improves the incentives for good governance. Olson's work on the distinction between roving and stationary bandits has been particularly influential in the analysis of political and economic order in warlord states and societies.

4.1. Establishment and Activities of the IRIS Center

To bridge the gap between his theoretical insights and practical policy, Olson founded the Center for Institutional Reform in the Informal Sector, commonly known as the IRIS Center. Based at the University of Maryland, the IRIS Center received funding from USAID (United States Agency for International Development). Its primary purpose was to provide an intellectual foundation for legal and economic reform projects undertaken by USAID, especially in formerly communist states that were in the process of transitioning to market-driven democratic governments governed by the rule of law. The Center was particularly active in East and Central Europe and the former Soviet Union. Its work expanded to include projects in South America, Africa, and Asia, where it became a notable proponent of judicial independence. In the 1990s, the IRIS Center notably sponsored the first conference on corruption in francophone Africa, addressing a subject that was highly sensitive at the time. The Center continued its operations even after Olson's death, eventually being integrated into other programs at the University of Maryland.

4.2. Broader Policy Influence

Mancur Olson's theoretical and practical work had a widespread influence on global economic and political policy discussions. His emphasis on the importance of strong institutions, secure property rights, and effective governance for economic prosperity informed debates on institutional reform in transitional economies. His advocacy for concepts such as judicial independence and his early efforts to tackle corruption laid important groundwork for subsequent international development initiatives and governance reforms worldwide.

5.1. Personal Life

In 1959, Mancur Olson married Alison. Together, they had three children. At the time of his death, he resided in College Park, Maryland, where he had been a professor for many years.

5.2. Death

Mancur Olson died on February 19, 1998, at the age of 66. He suddenly collapsed outside his office at the University of Maryland after returning from lunch. He never regained consciousness and passed away on the same day. The cause of his death was determined to be a heart attack. Olson is buried alongside his infant son in the cemetery of his childhood church, Grue Norwegian Lutheran, near his family's farm and hometown of Buxton, Traill County, North Dakota.

6.1. Academic Legacy and Influence

Olson's theories, particularly those detailed in The Logic of Collective Action, The Rise and Decline of Nations, and Power and Prosperity, have had an enduring and significant influence on new institutional economics, political science, and related disciplines. His work on collective action and the formation of interest groups fundamentally reshaped the understanding of how groups operate and influence policy. The distinction he drew between "roving bandits" and "stationary bandits" remains a powerful analytical tool for understanding political and economic order, especially in the context of warlord states and fragile societies. His research is widely cited and continues to serve as a foundational text for scholars examining economic growth, institutional design, and the dynamics of governance.

6.2. Awards and Commemorations

To honor Mancur Olson's numerous contributions to political economy, the American Political Science Association established the Mancur Olson Award, which recognizes the best PhD dissertation in the field. Further recognizing his legacy, the University of Maryland announced in 2013 the creation of a new endowed professorship, the Mancur Olson Professor of Economics. Peter Murrell, a professor of economics at the University of Maryland, was the first scholar to be appointed to this distinguished professorship.

7.1. Books

• The Economics of the Wartime Shortage: A History of British Food Supplies in the Napoleonic War and in World Wars I and II (1963)
• The Logic of Collective Action: Public Goods and the Theory of Groups (1965)
• The No-Growth Society, co-edited with Hans H. Landsberg (1974)
• A New Approach to the Economics of Health Care, edited (1981)
• The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities (1982)
• A Not-so-dismal Science: A Broader View of Economies and Societies, co-edited with Satu Kahkonen (2000)
• Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships (2000)
• A New Institutional Approach to Economic Development, co-edited with Satu Kahkonen (2001)

7.2. Articles

• "Towards a Mature Social Science" (March 1983)
• "Space, Agriculture, and Organization" (December 1985)
• "Dictatorship, Democracy, and Development" (September 1993)
• "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force" (with Martin C. McGuire) (March 1996)