Working Paper: CEPR ID: DP13985
Authors: Kenju Kamei; Louis Putterman; Jean-Robert Tyran
Abstract: Effective states provide public goods by taxing their citizens and imposing penalties for non-compliance. However, accountable government requires that enough citizens are civically engaged. We study the voluntary cooperative underpinnings of the accountable state by conducting a two-level public goods experiment in which civic engagement can build a sanction scheme to solve the first-order public goods dilemma. We find that civic engagement can be sustained at high levels when costs are low relative to the benefits of public good provision. This cost-to-benefit differential yields what we call a “leverage effect” because it transforms modest willingness to cooperate into the larger social dividend from the power of taxation. In addition, we find that local social interaction among subgroups of participants also boosts cooperation.
Keywords: civic engagement; public goods provision; experiment; cooperation
JEL Codes: C92; D02; D72; H41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| civic engagement (K16) | public goods provision (H41) |
| low costs of engagement (D26) | civic engagement (K16) |
| civic engagement (K16) | leverage effect (G41) |
| leverage effect (G41) | social dividends (D63) |
| local social interactions (Z13) | civic engagement (K16) |
| civic engagement (K16) | effectiveness of taxation (H26) |