Does reducing inequality increase cooperation?

Abhijit Ramalingam and Brock Stoddard

Journal of Economic Behavior & Organization, 2024, vol. 217, issue C, 170-183

Abstract: Inequality reduces the ability of communities to work together. Recent policy proposals seem to presume that reducing inequality may allow groups to improve outcomes. We experimentally test if, after experiencing inequality, pure redistribution to eliminate inequality increases contributions to public goods. It does not; it fails to raise cooperation even to levels observed in groups that were always equal. The former rich continue to keep most of their resources for private consumption. An analysis of group members’ beliefs about others’ contributions reveals that, after receiving additional resources, the poor mimic the contribution behaviour of the rich. This shift towards private consumption renders redistribution ineffective in raising cooperation.

Keywords: Redistribution; Inequality reduction; Income transfers; Cooperation; Public goods; Experiment (search for similar items in EconPapers)
JEL-codes: C91 C92 D31 D63 H41 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:217:y:2024:i:c:p:170-183

DOI: 10.1016/j.jebo.2023.10.029

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