Working Paper: CEPR ID: DP16284
Authors: Alex Armand; Britta Augsburg; Antonella Bancalari
Abstract: This paper provides novel evidence on the trade-off between public service delivery and free riding in low- and middle-income countries. We implement a field experiment in the slums of two major Indian cities, where inadequate access to sanitation restricts residents to either free ride, by disposing human waste in common-property areas, or use a fee-funded public service provided by community toilets. Using original survey, behavioral and objective measurements, we show that top-down incentives for the quality of service provision improves delivery and reduces non-payment of fees, but excludes a share of residents from using the service, forcing them into free riding. Willingness to pay for the service is unaffected, but demand for public intervention in the quality of delivery increases, replacing the demand to address free riding. Adding a campaign sensitizing the consequences of free riding among residents raises awareness, but does not induce any behavioral change. Supplementing reduced form estimates with structural estimates, we show that eliminating free riding requires subsidizing use beyond free basic services.
Keywords: public service; basic services; infrastructure maintenance; free riding; willingness to pay; water and sanitation; information; health
JEL Codes: C93; H40; I15; Q53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| top-down incentives for service quality (L15) | improvements in the delivery of public services (H40) |
| top-down incentives for service quality (L15) | reduction in non-payment of fees (G33) |
| top-down incentives for service quality (L15) | exclusion of a subset of residents from accessing the service (R28) |
| improvements in the delivery of public services (H40) | increase in free riding (H40) |
| maintenance treatment (E63) | reduction in non-payment (G33) |
| maintenance treatment (E63) | no increase in overall number of users (F69) |
| maintenance treatment (E63) | increase in average share of respondents practicing open defecation (C83) |
| maintenance intervention (R42) | increase in demand for public intervention regarding service cleanliness (H40) |
| maintenance intervention (R42) | decrease in demand to address free riding (H40) |