Distributional coalitions and other sources of economic stagnation: on Olson'sRise and Decline of Nations

Abstract

One of the most important recent contributions to the field of comparative political economy is Mancur Olson'sThe Rise and Decline of Nations. In that work, Olson deduces, from his logic of collective action, a series of implications regarding the impact of social organizations—in particular, “distributional coalitions”—on economic growth that can explain variations in national growth rates across a wide range of time and space. This article considers the assumptions upon which that logic is founded, the plausibility of the several implications drawn from that logic, and the application of the theory to account for differences among five nations in rates of economic growth in the post-World War II era. The analysis suggests that the characteristics of group activity emphasized by Olson represent, at best, only a small— perhaps negligible—part of the explanation of cross-national differences in growth. Instead, it suggests that an important source of the variation among nations in growth rates is the international political and economic system. In particular, the discussion of the German, Japanese, and British cases suggests that stagnation (or growth) is, to a considerable extent, the product of a nation's position in the world economy, the policy responses through which governments seek to perpetuate or improve that position, and the constraints upon (or opportunities for) growth-oriented domestic economic policy posed by that position.