Public goodsRefuting the Theory of Collective (Non-)action

Published 13 August 2019

The theory of collective action, which has been held for over 50 years, states that there is no incentive for individuals in large groups to participate in the provision of work for public benefit such as democracy, environmental protection, or peace. The main issue is the free-rider problem: Climate protection and the right to personal freedoms benefit all, regardless of whether everyone contributes to them or not. It is therefore a perfectly rational strategy for the individual solely to be a beneficiary.

Democracy, environmental protection, peace—the great issues of our time are collective goods that can only happen if many people make a voluntary contribution. However, the theory of collective action, which has been held for over 50 years, states that there is no incentive for individuals in large groups to participate in the provision of work for public benefit. Frankly speaking, individuals lack motivation because their contributions stand in no relation to the very small influence they can exert. With the largest laboratory experiment in economic research to date, a group of German experimental economists have now shaken this theory to the core and made an astonishing discovery. With considerable implications for the way participation is handled politically, our commitment is by no means only dependent on the influence we have. What is far more important is whether we really know what we are striving for.

World issues such as climate protection and the right to personal freedoms benefit all, regardless of whether everyone contributes to them or not. It is therefore a perfectly rational strategy for the individual solely to be a beneficiary. Conversely, this means that the state of affairs regarding issues impacting everyone is not in a good shape. This does indeed seem to correspond to our everyday experience: Why should I give up my car if millions of others don’t?

Flight Passenger Numbers Are Rising at the Same Rate As Environmental Awareness—a Contradiction?
Since Mancur Olson’s book The Logic of Collective Action: Public Goods and the Theory of Groups, published in 1965, science has invoked the theory that large groups are unable to make decisions benefitting the greater good. According to this, these groups fail on the grounds of a fundamental contradiction. Although all members of the group would be better off if the outcomes were made available, the incentive for individuals to actually contribute to them is infinitely small—their very minimal influence is offset by costs that are perceived to be too high.