AEA RC T Registr y

The American Economic Association's registry for randomized controlled trials

For the provision of healthcare, education, or road maintenance, society relies on the taxes paid by its members. Such services provided by governments are characterised by their non-excludability: once they are in place, all individuals, irrespective of whether they contributed towards it or not, will be able to use them. This leaves room for opportunistic behaviour that is widely studied in public good game studies and ways in which the free-rider problem can be overcome. What happens when citizens believe the government or administration responsible for collecting taxes is corrupt and may embezzle these funds? This would naturally reduce the provision of such services, as lower funds will be available from the governing body. Do taxpayers use this possibility as an ‘excuse’ to reduce even further their contributions towards public goods? We design an experiment to study the extent to which such moral wiggle room may re-inforce the inefficiencies of corruption. By contrasting public good games with or without embezzlement of contributions, we aim to identify whether individuals hide behind ignorance about the efficacy of the public good when choosing to contribute towards it. The experiment comprises of four treatments:

1. Baseline treatment of relatively higher certain returns from public good
2. Baseline treatment of relatively lower certain returns from public good
3. Uncertain returns treatment
4. Embezzlement of contributions treatment.

The design involves a monetary incentivised one-shot public good interaction, a monetary incentivised price list risk attitude elicitation and the social value orientation questionnaire and a brief demographics questionnaire.