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The perils of government enforcement

Listed author(s):
  • Rustam Romaniuc

    ()

    (Lille Catholic University, Maison des Chercheurs
    University of Montpellier, UMR 1135 LAMETA
    University of Turin - IEL)

  • Katherine Farrow

    ()

    (University of Montpellier, UMR 1135 LAMETA)

  • Lisette Ibanez

    ()

    (INRA, UMR 1135 LAMETA)

  • Alain Marciano

    ()

    (University of Montpellier, UMR 1135 LAMETA)

Abstract An important part of the debate about self versus state-governance involves a discussion about enforcement mechanisms. While some scholars argue that private enforcement mechanisms work sufficiently well in supporting cooperation, others cite the downfalls of private mechanisms so as to legitimize government enforcement. This paper focuses on the interplay between government and private enforcement mechanisms. Using an experimental approach, we demonstrate two results. First, we show that government enforcement, in the form of a centralized monetary punishment in our experiment, can be useful if aligned with and implemented after a private form of enforcement, namely peer disapproval. However, our second result suggests that the removal of government enforcement leads to a substantial decrease in overall cooperation levels—cooperation levels are higher under private enforcement when subjects had never experienced government enforcement compared to when they had been exposed to government enforcement. Specifically, the removal of government enforcement undermines the power of the remaining private enforcement mechanism to affect the behavior of free-riders.

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File URL: http://link.springer.com/10.1007/s11127-016-0319-6
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Article provided by Springer in its journal Public Choice.

Volume (Year): 166 (2016)
Issue (Month): 1 (January)
Pages: 161-182

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Handle: RePEc:kap:pubcho:v:166:y:2016:i:1:d:10.1007_s11127-016-0319-6
DOI: 10.1007/s11127-016-0319-6
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/public+finance/journal/11127/PS2

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