EconPapers    
Economics at your fingertips  
 

Inequality, institutions and cooperation

Thomas Markussen, Smriti Sharma, Saurabh Singhal and Finn Tarp
Additional contact information
Smriti Sharma: Department of Economics, Newcastle University

No 20-03, DERG working paper series from University of Copenhagen. Department of Economics. Development Economics Research Group (DERG)

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. This negative effect of inequality on cooperation is exacerbated in high corruption environments. We find that corruption leads to more pessimistic beliefs about others' contributions in heterogeneous groups, and this is an important mechanism explaining our results. In doing so, we highlight the indirect costs of corruption that are understudied in the literature. These findings have implications for public policies aimed at resolving local collective action problems.

Keywords: inequality; institutions; corruption; public goods; lab-in-field experiment (search for similar items in EconPapers)
JEL-codes: D73 D90 H41 O12 (search for similar items in EconPapers)
Pages: 11
Date: 2020-02-11
New Economics Papers: this item is included in nep-exp and nep-sea
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.econ.ku.dk/derg/wps/03-2020.pdf (application/pdf)

Related works:
Journal Article: Inequality, institutions and cooperation (2021) Downloads
Working Paper: Inequality, Institutions and Cooperation (2020) Downloads
Working Paper: Inequality, institutions and cooperation (2020) Downloads
Working Paper: Inequality, institutions, and cooperation (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kud:kuderg:2003

Access Statistics for this paper

More papers in DERG working paper series from University of Copenhagen. Department of Economics. Development Economics Research Group (DERG) Oester Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Hoffmann (thho@kb.dk).

 
Page updated 2024-12-28
Handle: RePEc:kud:kuderg:2003