The Problem of Collective Action: A Critical Examination of Olson’s Solution of ‘Selective Benefits’

Abstract

Olson’s (1965) ‘theory of groups’ suggests that the collective action problem is associated with large groups, as their members are more prone not to act in the group's common interest unless motivated by personal gains. Olson proposes the solution of ‘selective benefits’, which is based on the argument that, “only a separate and ‘selective’ incentive will stimulate a rational individual in a latent group to act in a group-oriented way.” Individuals will, in other words, only choose to join a group if the private benefits offered exceed the costs and thus the collective action problem will be overcome. This paper seeks to critically examine this highly controversial theory. By analysing the criticisms levelled against Olson’s solution, and the state of the debate, it is assessed whether the private benefits theory should be revisited. It is argued that the ‘selective benefits’ theory is based on over-simplistic assumptions, which are nonetheless inevitable when one appreciated the scientific motivations underlying Olson’s attempt to offer a solution to the collective action problem.