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The Long-Run Advantages of Centralization for Collective Action: A Comment on Bendor and Mookherjee

Published online by Cambridge University Press:  01 August 2014

Edward P. Schwartz  and
Michael R. Tomz
Edward P. Schwartz
Affiliation:
Harvard University
Michael R. Tomz
Affiliation:
Harvard University
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Abstract

Institutional design can affect the logic of ongoing collective action in groups with heterogeneous members. This article corrects a mathematical error in a seminal article by Bendor and Mookherjee (1987) and shows how the amended result strengthens the case for centralized monitoring and enforcement mechanisms. In solving their original model, Bendor and Mookherjee neglected that groups under centralized control will become increasingly talented over time, as headquarters detects and replaces untalented members. Expected improvements in the talent of the group should heighten the incentive for its members to work and curtail the incidence of costly free riding, as well as reduce the average per-worker cost of production. These gains in efficiency will not materialize in decentralized regimes, where the fraction of talented members will remain constant over time. Depending on the effectiveness of monitoring in the centralized group and the level of patience and talent in society as a whole, centralized regimes can produce greater group welfare than decentralized ones, even when decentralized institutions operate flawlessly.

Type
Forum
Information
American Political Science Review , Volume 91 , Issue 3 , September 1997 , pp. 685 - 693
Copyright
Copyright © American Political Science Association 1997

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