Source: EconLog
by Max Molden
“Mancur Olson’s The Rise and Decline of Nations doesn’t provide a particularly optimistic picture: once your nation has been stable for a while, and may even have risen to wealth, it becomes more and more vulnerable to ‘institutional sclerosis.’ This happens because small groups are better able to overcome free-riding, resulting in their ability to effectively skew the system towards their own interests. As more and more of these groups emerge, survive and are able to reap their rents—protected from that competition which makes for general progress and growth—the overall system deteriorates. If you take Olson’s work to its logical conclusion, a very effective cure for economic stagnation is a catastrophic war. That is obviously not a desirable solution. But Olson was pointing to a real issue: the longer a society remains stable, the more it gets choked by special interest groups.” (04/23/26)