Public Goods and Minimum Provision Levels: Does the Institutional Formation Affect Cooperation?. (10th April 2019)

• Record Type: Journal Article
• Authors: Martinsson, Peter; Persson, Emil
• Is Part Of: Scandinavian journal of economics. Volume 121:Number 4(2019)
• Page Start: 1473
• Page End: 1499
• Publication Date: 2019-04-10
• Subjects: Experiment -- minimum level -- public goods -- voting; Economics -- Periodicals; 330.05
• DOI: 10.1111/sjoe.12321
• Languages: English
• ISSNs: 0347-0520

Abstract

Abstract: We investigate experimentally the role of institutional formation on the implementation of a binding minimum contribution level to a public good. Groups either face the minimum level exogenously imposed by a central authority, or are allowed to decide for themselves by means of a group vote whether a minimum level should be implemented. We find that a binding minimum contribution level has a positive and substantially significant effect on cooperation. Interestingly, we do not find an additional positive effect of democracy in the context of our experiment; the minimum‐level intervention is as effective when exogenously implemented as when endogenously chosen.