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

Peter Martinsson and Emil Persson

Scandinavian Journal of Economics, 2019, vol. 121, issue 4, 1473-1499

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.

Date: 2019
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https://doi.org/10.1111/sjoe.12321

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Working Paper: Public Goods and Minimum Provision Levels: Does the institutional formation affect cooperation? (2016) Downloads
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Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten

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