Rise and decline of nations : economic growth, stagflation, and Social rigidities.

The years since World War II have seen rapid shifts in the relative positions of different countries and re gions. Some have enjoyed spectacular growth while others have declined. Leading political economist Mancur Olson offers here a new and powerful theory to explain these shifts in fortune and then tests his theory against evidence from many periods of history and many parts of the world.

Olson's theory builds on arguments advanced in his classic, The Logic of Collective Action. His thesis is that the behavior of individuals and firms in stable societies leads to the formation of dense networks of collusive, cartelistic, and lobbying organizations that make economies less efficient and dynamic and polities less governable. The longer a society goes without an upheaval, the more powerful such organi zations become-and the more they slow down eco nomic expansion. Societies in which these narrow interest groups have been destroyed-by war or revo lution, for example-enjoy the greatest gains in growth.

Olson emphasizes the complexity of historical change and wams against using his theory as a mon ocausal explanation. The theory does, however, shed new light on the reasons for a wide variety of histori cal phenomena that have never before been satisfac torily explained.

Mancur Olson is Distinguished Professor of Economics at the University of Maryland. He is past president of the Public Choice Society and of the Southern Eco nomic Association