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Bridging the Great Divide in South Africa: Inequality and Punishment in the Provision of Public Goods

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Author Info
Visser, Martine () (Department of Economics, School of Business, Economics and Law, Göteborg University)
Burns, Justine (University of Cape Town, Private Bag,)

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Abstract

We explore the effect of income inequality and peer punishment on voluntary provision of public goods in an experimental context. Our sample draws from nine fishing communities in South-Africa where high levels of inequality prevail. We find that aggregate cooperation is higher in both the voluntary contribution mechanism (VCM) and punishment treatments for unequal groups. Once peer sanctioning is introduced over-contribution by low relative to high endowment players observed in the VCM treatment is significantly enhanced. Demand for punishment by low and high endowment players are similar, irrespective of differences in relative costs, and in unequal groups free-riding is punished more, specifically by low endowment players. We observe inequality aversion both in endowments and with respect to the interaction of endowments and contributions: high endowment players receive more punishment, but also receive more punishment for negative deviation from the group mean share.

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File URL: http://hdl.handle.net/2077/2694
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Publisher Info
Paper provided by Göteborg University, Department of Economics in its series Working Papers in Economics with number 219.

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Length: 29 pages
Date of creation: 31 Aug 2006
Date of revision:
Handle: RePEc:hhs:gunwpe:0219

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Postal: Department of Economics, School of Business, Economics and Law, Göteborg University Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Related research
Keywords: Inequality; cooperation; punishment; public goods experiments;

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Find related papers by JEL classification:
C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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