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The Appeal of the Political Entrepreneur

Published online by Cambridge University Press:  27 January 2009

Philip Jones
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Extract

In its purest form a collective good is said to possess the characteristics of non-rivalness in consumption and non-price exclusion. Non-rivalness implies that consumption to the full by one person in no way impedes the consumption of that same quantity by others. This does not mean that the same subjective benefit is derived by each individual, but simply that consumption by one individual does not interfere with the benefits derived by another. The characteristic of non-exclusion requires that if the good is provided to one then it is provided to all. It is this attribute in particular which casts doubt on the likelihood that, in a large group, individuals will voluntarily reveal their preferences for the good. Goods which are not perfectly rival but which are price exclusive may be provided in the market by clubs. However, when an individual's consumption of a good is not dependent on his making a contribution to its provision the individual utility maximizer may be inclined to ‘free ride’, in the hope of enjoying the good at no personal expense. It is clear that if all individuals act in the same manner this good is not likely to be provided in the private market.

Type
Notes and Comments
Information
British Journal of Political Science , Volume 8 , Issue 4 , October 1978 , pp. 498 - 504
Copyright
Copyright © Cambridge University Press 1978

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References

1 See Peston, M., Public Goods and the Public Sector (London: Macmillan, 1972), p. 12.CrossRefGoogle Scholar

2 Buchanan, J. M., ‘An Economic Theory of Clubs’, Economica, XXXII (1965), 1–14.CrossRefGoogle Scholar

3 Olson, M. Jr., The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge, Mass.: Harvard University Press, 1971).Google Scholar

4 Jones, P. R., ‘Why Doctors Join the BMA’, Social and Economic Administration, VII (1973), 196–218CrossRefGoogle Scholar. It was clear that goods such as journals, invitations to social functions or to branch meetings and cheap insurance rates, which the individual doctor received only through membership, were not of great significance. However, it is also the case that coercion did not appear to explain the high proportionate membership the BMA has attained. See Jones, P. R., ‘The British Medical Association and the Closed Shop’, industrial Relations, V (1974), 36–45CrossRefGoogle Scholar. The same conclusion is clear when one considers membership by firms of the Confederation of British Industry. Marsh, David, ‘On Joining Interest Groups: An Empirical Consideration of the Work of Mancur Olson Jr.’, British Journal of Political Science, VI (1976), 257–71CrossRefGoogle Scholar, argues ‘It is difficult to see how Olson's notion of the importance of coercion or negative sanctions has any significance when one considers the CBI [and] many companies join the CBI because of the collective goods it offers rather than for any selective benefits’ (p. 263).

5 Frohlich, Norman, Oppenheimer, Joe A. and Young, Oran R., Political Leadership and Collective Goods (Princeton, N.J.: Princeton University Press, 1971).Google Scholar

6 Here the demand curves are drawn under the assumptions of constant real income and can be viewed as ‘marginal valuation curves’. See Hicks, J. R., A Revision of Demand Theory (Oxford: Oxford University Press, 1959), p. 86.Google Scholar

7 Sharp, Ansel M. and Escarraz, Donald R., ‘A Reconsideration of the Price or Exchange Theory of Public Finance’, Southern Economic Journal, XXXI (1964), 132–9CrossRefGoogle Scholar, argue that individuals will reveal preferences rather than go without the good because they are better off by so doing. They directly challenge the argument that preferences will not be revealed in the large group case. Escarraz, Donald, The Price Theory of Value in Public Finance (Gainesville, Florida: University of Florida Press, 1966)Google Scholar, pursues this argument. He takes as an example the work of Tiebout, Charles M., ‘A Pure Theory of Social Expenditures’, Journal of Political Economy, LXIV (1956), 416–24CrossRefGoogle Scholar who contended that individuals would move from a low rateable value area to one which had higher rates but improved amenities. Thus they are guided by the value which they derived from rates rather than a straightforward desire to keep rates low. As such, individuals would seem prepared to choose to pay more if the quantity of collective goods were increased.

8 Typical of this literature is Marris, R., The Economic Theory of ‘Managerial’ Capitalism (London: Macmillan, 1964)CrossRefGoogle Scholar and Baumol, W. J., Business Behaviour, Value and Growth (New York: Macmillan, 1959).Google Scholar

9 In groups where this probability is extremely low it is clear that the ne! expected benefit of donating is unlikely to be positive. If it were zero then no matter how much consumer surplus the individual would enjoy from increased output, he simply will not donate. Richelson, Jeffrey, ‘A Note on Collective Goods and the Theory of Political Entrepreneurship’, Public Choice, XVI (1973), 73–5CrossRefGoogle Scholar, argues that Olson assumes this probability to be zero in large groups and hence his conclusions hold.

10 Peston, , Public Goods and the Public Sector, p. 33.Google Scholar

11 Bazel, Y. and Silberberg, E., ‘Is the Act of Voting Rational?’, Public Choice, XVI (1973), 51–8CrossRefGoogle Scholar, found that closeness of the election helped explained turn-out in the USA. Silberman, J. and Durden, G., ‘The Rational Behaviour Theory of Voter Participation’, Public Choice, XXII (1975), 101–8CrossRefGoogle Scholar, confirmed this with respect to congressional elections in the USA.