How special interests tank effective government
City leaders are increasingly complaining about how San Jose's government decision-making is too slow and cumbersome. Edward Glaeser, author of Triumph of the City, provides some academic context to these' concerns in a recent speech to the Manhattan Institute. In the speech, Glaeser summarizes Mancur Olson's groundbreaking thesis from The Logic of Collective Action: Public Goods and the Theory of Groups (1965) about how special interests undermine organizational effectiveness by creating barriers to innovation and privileging existing stakeholders.
"Mancur Olson offered these ideas in a grand theory, about how all organizations—cities, nations, and so on—accrete special interests and regulations over time that contribute to their decline. These organizations develop rules that stymie the entrepreneurship and the new innovations that actually makes them great to begin with.
"Olson puts it like this: Stable societies with unchanged boundaries tend to accumulate more collusions and organizations for collection action over time. Unbalanced special interest organizations and collusions reduce efficiency and aggregate income in the societies in which they operate and make political life more divisive. Distributional coalitions slow down a society's capacity to adopt new technologies, and to reallocate new resources, and respond to changing conditions, and thereby reduce the rate of economic growth. The accumulation of distributional coalitions, again that's Mancur's cumbersome phrase, increases the complexity of regulation, the role of government, and the complexity of understandings and the changes in direction of social evolution. Put simply, this view suggests that a stable society sews the seeds of its own demise, and without some form of radical change to break open the barriers that make it increasingly difficult to move, to start a new business, that we will look forward to a society that will constantly be looking over its shoulder and thinking that it's best days are behind it.
The full text of Glaeser's presentation can be heard on Manhattan Institutes Ten Blocks podcast here.