Cameron: Distributional Coalitions and Other Sources of Economic Stagnation: On Olson's Rise and Decline of Nations

Cameron, D., 1988. Distributional Coalitions and Other Sources of Economic Stagnation: On Olson’s Rise and Decline of Nations. International Organization, 42(4), 561-603.

“During the last decade, the study of politics has been infused with a concern with economics” (561). “Yet, in spite of the proliferation of scholarship concerned with American, comparative, and international political economy, and important lacuna exists. Apparently accepting a disciplinary division of labor and willing to leave the subject to economists, most political scientists have neglected the systematic, theoretical and empirical analysis of why growth rates differ among nations and, within nations, over time. As a result, economic growth has been and remains, as Whiteley notes, ‘one of the most neglected topics in the emerging literature of modern political economy;” (561).

“In the first section, I question some of the major assumptions upon which Olson builds his ‘logic’ of collective action. The second section considers each of the nine ‘implications’ drawn from that ‘logic’ that Olson describes…Particular attention is given to those implications which are essential to an explanation of variations across time and space in rates of economic growth. In the third section, I review some of the empirical evidence that Olson claims supports his theory, especially his application of the theory to account for differences in growth rates among five nations…in the post-World War II era” (563).

Part of the claim is that, along with most literature that focuses on economic growth, Olson identifies the source of that growth domestically, while Cameron claims that it has much to do with the position of the country in the world economy, and the policy responses of countries in response to the relative of the country and the global economy.

“…Olson’s analysis of collective behavior rests on an apparent paradox: individuals, firms, or other units sharing a common interest that can be furthered by working together will decide rationally not to act as a group” (564).

For one thing, Olson’s analysis relies too heavily on a simplistic notion of society divided into groups, and these groups representing some kind of core societal function. Also, it also ignores the possibility of groups acting in the interest of other groups, or at least not acting in their own interest with rational maximizing being the predominant qualification. A second assumption of Olson’s analysis is that groups are able to achieve their objectives based entirely on whether or not they are internally structured to achieve these goals. There is not an emphasis on the relationship between groups, or of other more structural conditions that would hamper group action.

However, for Cameron, the weakest assumption of Olson can be drawn back to neoclassical economic assumptions: “Instead, the weakest assumption behind the ‘logic’ involves the nature of the costs and benefits obtained from group action. The logic is grounded, like the neo-classical economic theory from which It derives, on the assumptions that: 1) the relevant unit of analysis is the individual, 2) the costs and benefits of collective action are divisible and capable of being allocated among individuals, and 3) that individuals can, and do (assuming some form of rationality), determine the formation and behavior of groups through their calculations of cost and benefit” (566).

Cameron then goes through each of the 9 separate conclusions that Olson draws from his original logic and attempts to show how they are wrong-headed. I will not detail them here, though they represent a bulk of this article. Specifically, Cameron picks apart Olson’s account of different rates of growth of five key industrialized countries. Cameron concludes that the myopic focus on internal descriptions of different patterns of economic growth should be supplemented with an external, international perspective on different patterns of economic growth. “…I suggested that rather than reflecting only such internal, domestic characteristics as the structure and behavior of distributional collations, the variation among nations in growth rates may reflect the impact of external, international factors. In particular, the discussion of the German, Japanese, and British experiences suggested that a nation’s rate of economic growth may have less to do with the purely domestic social-organization characteristics and activities considered by Olson than with the nation’s historic an devolving position in the world economy, the policy responses through which government attempts to maintain or improve that position, and, finally, the constraints on (or, conversely, opportunities for) growth-orientated domestic economic policy that derive from that position” (603).