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Inequality, institutions, and cooperation

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  • Thomas Markussen
  • Smriti Sharma
  • Saurabh Singhal
  • Finn Tarp

Abstract

We examine the effects of randomly introduced economic inequality on voluntary cooperation, and whether this relationship is influenced by the quality of local institutions, as proxied by corruption. We use representative data from a large-scale lab-in-the-field public goods experiment with over 1,300 participants across rural Vietnam. Our results show that inequality adversely affects aggregate contributions, and this is on account of high endowment individuals contributing a significantly smaller share than those with low endowments.

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  • Thomas Markussen & Smriti Sharma & Saurabh Singhal & Finn Tarp, 2020. "Inequality, institutions, and cooperation," WIDER Working Paper Series wp-2020-127, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2020-127
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    1. Sharma, Smriti & Singhal, Saurabh & Tarp, Finn, 2021. "Corruption and mental health: Evidence from Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 125-137.
    2. Alexandra Baier & Loukas Balafoutas & Tarek Jaber-Lopez, 2023. "Ostracism and theft in heterogeneous groups," Experimental Economics, Springer;Economic Science Association, vol. 26(1), pages 193-222, March.

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    More about this item

    Keywords

    Inequality; Institutions; Corruption; Public goods; Lab-in-field experiment;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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