Collective Action And Free Riding

Collective Action and Free Riding

Collective action problems exist when people have a disincentive to take action. In his classic work, The Logic of Collective Action, economist Mancur Olson discussed the conditions under which collective actions problems would exist, and he noted that they were prevalent among organized interests. People tend not to act when the perceived benefit is insufficient to justify the costs associated with engaging in the action. Many citizens may have concerns about the appropriate level of taxation, gun control, or environmental protection, but these concerns are not necessarily strong enough for them to become politically active. In fact, most people take no action on most issues, either because they do not feel strongly enough or because their action will likely have little bearing on whether a given policy is adopted. Thus, there is a disincentive to call your member of Congress, because rarely will a single phone call sway a politician on an issue.

Why do some students elect to do little on a group project? The answer is that they likely prefer to do something else and realize they can receive the same grade as the rest of the group without contributing to the effort. This result is often termed the free rider problem, because some individuals can receive benefits (get a free ride) without helping to bear the cost. When National Public Radio (NPR) engages in a fund-raising effort to help maintain the station, many listeners will not contribute. Since it is unlikely that any one listener’s donation will be decisive in whether NPR has adequate funding to continue to operate, most listeners will not contribute to the costs but instead will free ride and continue to receive the benefits of listening.

Collective action problems and free riding occur in many other situations as well. If union membership is optional and all workers will receive a salary increase regardless of whether they make the time and money commitment to join, some workers may free ride. The benefits sought by unions, such as higher wages, collective bargaining rights, and safer working conditions, are often enjoyed by all workers regardless of whether they are members. Therefore, free riders can receive the benefit of the pay increase without helping defray the cost by paying dues, attending meetings or rallies, or joining protests.

In February 2009, in protest over the “union-busting” efforts of the Rite-Aid Corporation, members of the AFL-CIO demonstrated at the drugstore chain’s corporate headquarters in Camp Hill, Pennsylvania. (credit: Amy Niehouse)

If free riding is so prevalent, why are there so many interest groups and why is interest group membership so high in the United States? One reason is that free riding can be overcome in a variety of ways. Olson argued, for instance, that some groups are better able than others to surmount collective action problems. They can sometimes maintain themselves by obtaining financial support from patrons outside the group.

Groups with financial resources have an advantage in mobilizing in that they can offer incentives or hire a lobbyist. Smaller, well-organized groups also have an advantage. For one thing, opinions within smaller groups may be more similar, making it easier to reach consensus. It is also more difficult for members to free ride in a smaller group. In comparison, larger groups have a greater number of individuals and therefore more viewpoints to consider, making consensus more difficult. It may also be easier to free ride because it is less obvious in a large group when any single person does not contribute. However, if people do not lobby for their own interests, they may find that they are ignored, especially if smaller but more active groups with interests opposed to theirs lobby on behalf of themselves. Even though the United States is a democracy, policy is often made to suit the interests of the few instead of the needs of the many.

Group leaders also play an important role in overcoming collective action problems. For instance, political scientist Robert Salisbury suggests that group leaders will offer incentives to induce activity among individuals. Some offer material incentives, which are tangible benefits of joining a group. AARP, for example, offers discounts on hotel accommodations and insurance rates for its members, while dues are very low, so they can actually save money by joining. Group leaders may also offer solidary incentives, which provide the benefit of joining with others who have the same concerns or are similar in other ways. Some scholars suggest that people are naturally drawn to others with similar concerns. The NAACP is a civil rights groups concerned with promoting equality and eliminating discrimination based on race, and members may join to associate with others who have dealt with issues of inequality.

Similarly, purposive incentives focus on the issues or causes promoted by the group. Someone concerned about protecting individual rights might join a group like the American Civil Liberties Union (ACLU) because it supports the liberties guaranteed in the U.S. Constitution, even the free expression of unpopular views. Members of the ACLU sometimes find the messages of those they defend (including Nazis and the Ku Klux Klan) deplorable, but they argue that the principle of protecting civil liberties is critical to U.S. democracy. In many ways, the organization’s stance is analogous to James Madison’s defense of factions mentioned earlier in this chapter. A commitment to protecting rights and liberties can serve as an incentive in overcoming collective action problems, because members or potential members care enough about the issues to join or participate. Thus, interest groups and their leadership will use whatever incentives they have at their disposal to overcome collective action problems and mobilize their members.

Finally, sometimes collective action problems are overcome because there is little choice about whether to join an organization. For example, some organizations may require membership in order to participate in a profession. To practice law, individuals may be required to join the American Bar Association or a state bar association. In the past, union membership could be required of workers, particularly in urban areas controlled by political machines consisting of a combination of parties, elected representatives, and interest groups.