Group behaviour and development

A very large amount of activity occurs within groups (that is within families, firms, co-operatives, communities or governments). Yet mosteconomic analysis focuses on market transactions between these agents. The purpose of the study is to analyse within group behaviour.Evidence suggests some groups perform well from the perspective of efficiency, equity and well-being, while others perform poorly. The studyaims to identify the main causes for these different outcomes, developing a preliminary analysis of modes of group behaviour, and influenceson them.The study identifies three modes of group behaviour: one which secures members' adherence to the group objectives via power and control, ina hierarchical way; one which operates by the use of financial incentives; and one which operates through co-operation among members toachieve the often shared objectives. It is suggested that external norms, and other conditions in the society in which the group is located, arean important influence on mode of behaviour. A review of some existing empirical literature of behaviour in firms, in local government andhealth services, and in co-operatives and community organizations found a variety of modes of operation and also outcomes within eachcategory. However, groups rarely fall completely into one category or another but frequently combine elements. Co-operative modes ofbehaviour are often as efficient as the alternatives, because they save on transactions/supervisory costs; but although groups operating in aco-operative mode are often associated with more equity among their members, and sometimes also have a more equitable impact on theeconomy, this is not always the case. External conditions-not only prevailing norms, but also the distribution of assets and income-seem to bean important influence on group behaviour, and, in particular, on the equity of within group relationships. These suppositions are beingexamined further in the research project that is underway.A very large amount of activity occurs within groups (that is within families, firms, co-operatives, communities or governments). Yet mosteconomic analysis focuses on market transactions between these agents. The purpose of the study is to analyse within group behaviour.Evidence suggests some groups perform well from the perspective of efficiency, equity and well-being, while others perform poorly. The studyaims to identify the main causes for these different outcomes, developing a preliminary analysis of modes of group behaviour, and influenceson them.

The study identifies three modes of group behaviour:

• one which secures members' adherence to the group objectives via power and control, in a hierarchical way
• one which operates by the use of financial incentives
• one which operates through co-operation among members to achieve the often shared objectives.

It is suggested that external norms, and other conditions in the society in which the group is located, are an important influence on mode of behaviour. A review of some existing empirical literature of behaviour in firms, in local government and health services, and in co-operatives and community organizations found a variety of modes of operation and also outcomes within each category.

However, groups rarely fall completely into one category or another but frequently combine elements. Co-operative modes of behaviour are often as efficient as the alternatives, because they save on transactions/supervisory costs; but although groups operating in a co-operative mode are often associated with more equity among their members, and sometimes also have a more equitable impact on the economy, this is not always the case.

External conditions-not only prevailing norms, but also the distribution of assets and income-seem to be an important influence on group behaviour, and, in particular, on the equity of within group relationships. These suppositions are being examined further in the research project that is underway. [author]