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Democracy Premium – A Cross-Cultural Comparison of Effects of Democratic Choice in China and Germany

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  • Tontrup, Stephan
  • Gaissmaier, Wolfgang

Abstract

Recent experiments in the lab and the field have shown evidence for a democracy premium: cooperation in social dilemmas is stronger when policies are chosen by vote instead of being imposed. What is driving this democratic effect? Some studies suggest that selecting cooperation friendly institutions sends a positive signal, others suggest the premium might be limited to those, who won the vote. Our study contributes to the evidence in two important ways: first we show that the democracy premium can be driven by participation alone. Even more so, we show already the mere entitlement with voting rights fosters cooperation. Second, we demonstrate the cultural dependence of the democracy effect. Running our study at different locations in China, does not suggest any cooperative advantage of democratically chosen rules over imposed ones. We conclude that while our evidence ties the premium to participation and the mere entitlement with voting rights, the effect is not universal. Our results open the debate of what the (cultural) preconditions may be that can bring up a democracy premium.

Suggested Citation

  • Tontrup, Stephan & Gaissmaier, Wolfgang, 2023. "Democracy Premium – A Cross-Cultural Comparison of Effects of Democratic Choice in China and Germany," EconStor Preprints 335551, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:335551
    DOI: 10.2139/ssrn.4547585
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    References listed on IDEAS

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    3. Bardhan, Pranab, 2000. "Irrigation and Cooperation: An Empirical Analysis of 48 Irrigation Communities in South India," Economic Development and Cultural Change, University of Chicago Press, vol. 48(4), pages 847-865, July.
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    More about this item

    Keywords

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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