Coalitions strengthen a nation, and then strangle it whole.
Or so it’s been argued. In his influential 1982 political treatise called The Rise and Decline of Nations, political scientist Mancur Olson (1932-1998) builds on his earlier work on collective action to argue that stable societies tend to accumulate powerful special-interest groups over time, which in turn create institutional sclerosis.
These groups—unions, industry associations and other lobbying blocs—develop to protect their members’ economic rents, but their growing influence eventually stifles innovation, efficiency and long-term economic growth. Olson argues that this “accumulation of distributional coalitions” explains why some rich nations stagnate while others surge ahead. Post-war Germany and Japan, having lost these entrenched coalitions due to military defeat, grew rapidly in contrast to countries like the UK or the US, which retained their institutional inertia. I share notes from the book below.
Continue reading The Rise and Decline of Nations