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A theory of revolutionary organizations

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  • Mario Ferrero

    (University of Eastern Piedmont)

Abstract

This paper models a revolutionary organization committed to a project of radical social change over a long time horizon, and therefore, engaged in selling promises to both customers and workers in exchange for current effort and support. To build customer trust and provide members incentives, the organization structures itself as a producer cooperative and sets up a parallel sector that yields cash revenues and provides short-term benefits. This parallel activity, if successful, may represent a temptation away from revolution, but it is subject to competition from other providers or from the state. The main result is that, unlike a profit-maximizing firm, the cooperative reacts to increased competition by shrinking the parallel sector and specializing in revolution; hence, reform expands at the expense of revolution only if the parallel sector approaches monopoly. We find supportive historical evidence in a survey of socialist revolutions and social democracies, nationalist movements, and Islamist insurgencies.

Suggested Citation

  • Mario Ferrero, 2020. "A theory of revolutionary organizations," Economics of Governance, Springer, vol. 21(3), pages 245-273, September.
    • Handle: RePEc:spr:ecogov:v:21:y:2020:i:3:d:10.1007_s10101-020-00238-3
    DOI: 10.1007/s10101-020-00238-3
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    References listed on IDEAS

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    1. Ben-ner, Avner, 1984. "On the stability of the cooperative type of organization," Journal of Comparative Economics, Elsevier, vol. 8(3), pages 247-260, September.
    2. Berman, Eli & Laitin, David D., 2008. "Religion, terrorism and public goods: Testing the club model," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 1942-1967, October.
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    9. Mario Ferrero, 2005. "Radicalization as a reaction to failure: An economic model of Islamic extremism," Public Choice, Springer, vol. 122(1), pages 199-220, January.
    10. Jean-Paul Azam, 2006. "On thugs and heroes: Why warlords victimize their own civilians," Economics of Governance, Springer, vol. 7(1), pages 53-73, January.
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    14. Pierre-Emmanuel Ly, 2007. "The charitable activities of terrorist organizations," Public Choice, Springer, vol. 131(1), pages 177-195, April.
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    Cited by:

    1. Mario Ferrero, 2025. "Women, political violence and economics," Journal of Peace Research, Peace Research Institute Oslo, vol. 62(2), pages 402-415, March.
    2. Mario Ferrero, 2024. "Left, right, or neither? Islamism as social blueprint," Constitutional Political Economy, Springer, vol. 35(4), pages 500-522, December.
    3. Mario Ferrero, 2024. "The political economy of rights," Public Choice, Springer, vol. 198(3), pages 297-316, March.

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    Keywords

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    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms

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