Collective action for public goods provision in lowincome groups: a model and evidence from Peru

Under what circumstances does collective action arise? What contributes to the likelihood that a particular collective initiative will succeed? To what extent are poor communities capable of organizing themselves to improve their quality of life? These questions are not new, and economic researchers have studied a number of models in rural settings. Yet the research on collective action in urban areas seems to be more in the political sciences, and an economic model is still lacking. The fundamental question remains: How are public goods produced and maintained by poor urban communities? This paper presents a set of hypotheses on collective action determinants. Collective action in poor neighborhoods faces three key barriers to success: the Olsonian free-rider problem, the Maslowian problem, and the exclusion problem. The empirical portion of this paper uses data collected in poor urban and peri-urban areas of Lima, Peru, in six types of community organizations.