ABSTRACT
Neo-institutionalists argue that at the heart of the dilemmas of collective action lies incentive. The economic approach of institutions, which is largely based on the assumption of bounded rationality, suggests that individuals are selfish and calculating, and the temptation of free-riding is so strong that co-operation between individuals is impossible. To enforce collective action, the right institutional framework needs to be designed, so that individual incentives are aligned to be consistent with the desirable collective outcomes (World Bank 2003).
