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Public Goods and Minimum Provision Levels: Does the Institutional Formation Affect Cooperation?

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  • Peter Martinsson
  • Emil Persson

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.

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  • Peter Martinsson & Emil Persson, 2019. "Public Goods and Minimum Provision Levels: Does the Institutional Formation Affect Cooperation?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(4), pages 1473-1499, October.
  • Handle: RePEc:bla:scandj:v:121:y:2019:i:4:p:1473-1499
    DOI: 10.1111/sjoe.12321
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    Cited by:

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    3. Chan, Nathan W. & Wolk, Leonard, 2020. "Cost-effective giving with multiple public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 130-145.
    4. Bouma, J.A. & Nguyen, Binh & van der Heijden, Eline & Dijk, J.J., 2018. "Analysing Group Contract Design Using a Lab and a Lab-in-the-Field Threshold Public Good Experiment," Discussion Paper 2018-049, Tilburg University, Center for Economic Research.
    5. Astrid Dannenberg & Carlo Gallier, 2019. "The Choice of Institutions to Solve Cooperation Problems: A Survey of Experimental Research," MAGKS Papers on Economics 201911, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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