Social and financial incentives for overcoming a collective action problem

M. Mehrab Bakhtiar, Raymond Guiteras, James Levinsohn and Ahmed Mushfiq Mobarak

Journal of Development Economics, 2023, vol. 162, issue C

Abstract: Addressing public health externalities often requires community-level collective action. Due to social norms, each person’s sanitation investment decisions may depend on the decisions of neighbors. We report on a cluster randomized controlled trial conducted with 19,000 households in rural Bangladesh where we grouped neighboring households and introduced (either financial or social recognition) rewards with a joint liability component for the group, or asked each group member to make a private or public pledge to maintain a hygienic latrine. The group financial reward has the strongest impact in the short term (3 months), inducing a 7.5–12.5 percentage point increase in hygienic latrine ownership, but this effect dissipates in the medium term (15 months). In contrast, the public commitment induced a 4.2–6.3 percentage point increase in hygienic latrine ownership in the short term, but this effect persists in the medium term. Non-financial social recognition or a private pledge has no detectable effect on sanitation investments.

Keywords: Development; Environment; Sanitation; Collective action problems (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Social and Financial Incentives for Overcoming a Collective Action Problem (2022)
Working Paper: Social and Financial Incentives for Overcoming a Collective Action Problem (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:162:y:2023:i:c:s0304387823000275

DOI: 10.1016/j.jdeveco.2023.103072

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