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We examine whether electoral preferences depend on a community's population size by studying post-Second World War Baden-Württemberg in Southwest Germany. Our identification strategy exploits the fact that the French administration zone prohibited German expellees from entering, contrary to the contiguous American zone. Population size positively predicts voting for the Social Democrats (the party advocating substantial government involvement in practically all domains) and negatively for the Christian Democrats (the small-government party advocating free-market policies). Results are neither driven by pre-existing voting patterns, religious compositions, and location- and time-specific unobservables, nor other measurable cultural, demographic, economic, or political characteristics. Alternative explanations pertaining to expellee voting behaviour or a backlash of natives against expellees appear unlikely – population size prevails as a predominant voting predictor. [ABSTRACT FROM AUTHOR]

The inequity aversion model is fundamental to explaining the motivation of voluntary contribution behavior. Yet, the empirical studies limit the research on the inequity-aversion to small groups due to the difficulty of accounting for each individual's payoff in the decision-making process for large group sizes. To overcome the technical barrier of estimating expected payoffs with large group sizes and various marginal returns, we adopt the Quantal Response Equilibrium estimation method that allows for an individual's contribution to be impacted by their social preferences, i.e., inequality aversion, altruism, and bounded rationality. Our theoretical model identifies the equilibrium strategy of contribution. Using Bayesian inference via Markov Chain Monte Carlo, the experimental results show people are significantly worse off when they contribute more or less than others, meaning social equality promotes public good provisions. We find that marginal per capita return and group size play important roles in people's contribution decisions, and the effect of marginal per capita return on contributions is stronger than that of group size. [ABSTRACT FROM AUTHOR]

We consider ultimatum bargaining over the provision of a public good. Offer‐maker and responder can delegate their decisions to agents whose actual decision rules are opaque. We show that the responder will benefit from strategic opacity, even with bilateral delegation. The incomplete information created by strategic opacity choices does not lead to inefficient negotiation failure in equilibrium. Inefficiencies arise from an inefficient provision level. While an agreement will always be reached, the public good provision will fall short of the socially desirable level. Compared with unilateral delegation, bilateral delegation is never worse from a welfare perspective. [ABSTRACT FROM AUTHOR]

Remittances are an important source of income for the very countries afflicted by high levels of corruption. However, corruption undermines the development potential of remittances. With this in mind, we propose policy reforms that harness the potential of remittances while mitigating corruption. Unlike previous studies, we point to two channels: (1) the corrupt government's trade‐off between its financial interests (corruption), the provision of a public good, and the gains from a higher inflow of remittances; and (2) the household's consumption of the public good relative to that of the privately obtained substitute of the public good. [ABSTRACT FROM AUTHOR]

A common claim in the policy discourse is that a government wishing to achieve equality of opportunity should use public provision of education for equalisation of opportunities rather than income taxation, which only equalizes incomes. We develop a framework in which the tax and education provision rules in the welfarist and non-welfarist/equality of opportunity cases can be transparently compared. We show that in addition to education policies, progressive taxation also plays a role in achieving equality of opportunity, and illustrate how its use may differ under the two objectives. We also show how the provision of public education depends on how private education choices respond, potentially differentially by higher- and lower-income families. [ABSTRACT FROM AUTHOR]

Peaceful coexistence and trade among human groups can be fragile and intergroup relations frequently transition to violent exchange and conflict. Here we specify how exogenous changes in groups' environment and ensuing carrying-capacity stress can increase individual participation in intergroup conflict, and out-group aggression in particular. In two intergroup contest experiments, individuals could contribute private resources to out-group aggression (versus in-group defense). Environmental unpredictability, induced by making non-invested resources subject to risk of destruction (versus not), created psychological stress and increased participation in and coordination of out-group attacks. Archival analyses of interstate conflicts showed, likewise, that sovereign states engage in revisionist warfare more when their pre-conflict economic and climatic environment were more volatile and unpredictable. Given that participation in conflict is wasteful, environmental unpredictability not only made groups more often victorious but also less wealthy. Macro-level changes in the natural and economic environment can be a root cause of out-group aggression and turn benign intergroup relations violent. This article is part of the theme issue 'Intergroup conflict across taxa'. [ABSTRACT FROM AUTHOR]

This paper presents and solves a model of ethnically motivated warfare which treats annexations as the explicit outcomes of secessions. An ethnic group within one country may want to engage in a secession in order to join its ethnic peers in the annexing country. The annexing country decides whether or not to support the separatist ethnic group in the conflict. I use this model to discuss how equilibrium behavior depends on economies of scale in the public good provision, ethnic heterogeneity, and sanctions. Among others, I find that sanctions can have the seemingly paradoxical effect of increasing conflict intensity [ABSTRACT FROM AUTHOR]

We develop a two‐stage model to study the strategic interaction between a politician (the principal) and a bureaucrat (the agent) over the level of infrastructure provision with uncertainty about possible weather shocks. The bureaucrat chooses how much effort to contribute to infrastructure maintenance and the politician offers either a lump‐sum wage (non‐corrupt) contract or proportional bribe (corrupt) contract to induce effort. The degree of uncertainty about weather shocks, the size of the fixed wage, and the level of external monitoring to detect corruption all interact to affect (a) the politician's choice of contract and (b) whether this choice improves infrastructure outcomes. Our results suggest that curbing corruption is most likely to yield improvements in infrastructure provision when climate uncertainty is low and when bureaucratic wages are relatively high. If climate uncertainty is high, increasing monitoring has an unambiguous negative effect on infrastructure provision. Previous literature has focused either on public goods provision but not corruption or on bribery in a regulatory context that lacks public goods provision. We extend both literatures by analyzing how bribes between government officials affect a principal's ability to more effectively incentivize public goods provision by her agent. [ABSTRACT FROM AUTHOR]

Two types of social policy instruments — making group behavior public to the individual and making individual behavior public to the group — are used by charities to encourage giving and by policymakers to incentivize other prosocial behaviors. However, models of social norms suggest that the effects of such interventions are theoretically ambiguous and may even backfire in low-compliance environments. We examine these questions in the context of a public good game. Exploiting a unique experimental design, we show that initial contributors' giving decisions are sensitive to the behavior of the group while initial non-contributors' decisions are not. In contrast, making own behavior public to the group increases contributions for all group types, even those comprised entirely of initial non-contributors. These findings suggest that publicizing contributions causes individuals to respond to a common understanding of prosocial behavior that is not defined solely by the initial group norm. [ABSTRACT FROM AUTHOR]

Whereas experimental studies of common pool resource (CPR) dilemmas are frequently terminated with collapse of the resource, there is considerable evidence in real-world settings that challenges this finding. To reconcile this difference, we propose a two-stage model that links appropriation of the CPR and provision of public goods in an attempt to explain the emergence of cooperation in the management of CPRs under environmental uncertainty. Benchmark predictions are derived from the model, and subsequently tested experimentally under different marginal cost-benefit structures concerning the voluntary contribution to the provision of the good. Our results suggest that the severity of the appropriation problem may significantly be mitigated by the presence of an option for voluntarily contributing a fraction of the income surplus from the appropriation phase to the provision of the public good.

Recent decades have seen a surge in women occupying positions of political power. This has been welcomed in part as a means of achieving better policy outcomes for women. We interrogate this proposition, developing a "gendered accountability" framework to explain when and how female representation promotes the implementation of policies that women prioritize. Our empirical analysis applies this framework to sub-Saharan Africa, home to the largest recent expansion in women's political representation. We find that increased female representation in the legislature is robustly associated with reduced infant and child mortality as well as greater spending on health. Effects are magnified when women are more active in civil society and appear primarily in countries that have gender quotas and proportional electoral systems. Thus, while female representation can lead to improved policy outcomes for women, the process is not automatic and is unlikely to occur absent key institutional and societal conditions. [ABSTRACT FROM AUTHOR]

This paper explores how wars make nations, above and beyond their need to raise the fiscal capacity to finance warfare. As army size increases, states change the conduct of war, switching from mercenaries to mass conscript armies. In order for the population to accept fighting and enduring wars, the government elites provide public goods, reduce rent-extraction, and adopt policies to build a nation – i.e., homogenize the culture of the population. Governments can instill "positive" national sentiment, in the sense of emphasizing the benefit of the nation, but they also can instill "negative" sentiment, in terms of aggressive propaganda against the opponent. We analyze these two types of nation-building and study their implications. [ABSTRACT FROM AUTHOR]

Sanctions restrict or terminate economic relations between two or more countries, directly and negatively influencing sanctioned countries' companies. We argue that sanctions are similar to recessions—both reduce economic activity in affected countries. Less economic activity results in a lower accident risk as companies use their productive facilities less. Reduced revenues also force companies to adjust by cutting costs, which includes spending on safety. Hence, accident damage should increase under sanctions. Governments can intervene by enforcing safety regulations, and their incentives to do so are stronger in democracies, where citizens can more easily remove politicians from office. Therefore, accident damage increases only in nondemocratic countries, while democracies succeed in maintaining technological safety and hence sanctions do not affect accident damage. [ABSTRACT FROM AUTHOR]

In this work, we theoretically approach optimal taxing in a public good provision context in a society where wealth is Pareto distributed. Our main result shows that high levels of wealth inequality yield lower levels of tax compliance and, consequently, lower provision of public goods. [ABSTRACT FROM AUTHOR]

The allocation of a government budget between a public good and transfers is modeled under different systems of government. The relatively even distribution of political power among groups in a democracy favors spending on nonexclusive public goods. The more concentrated pattern of political power in a dictatorship favors spending on transfers targeted to powerful groups. The hypothesis on public good provision is examined using cross-country data on public good provision and empirical indicators of political regime. Dictatorial governments are found to provide public schooling, roads, safe water, public sanitation, and pollution control at levels far below democracies.

This paper reconsiders the classic issue of whether provision of a public good should be undertaken directly by the government or through private contracting (Hart, Andrei, & Robert, 1997). We consider a third alternative of provision by a mixed ownership firm. We assume that this mixed ownership firm provides the government principal with a combination of the contracting problems it faces in the two more extreme alternatives. We show that full government ownership and provision is never optimal and that frequently the mixed firm undertakes intermediate investments that also prove welfare superior to fully private contracting. These results carry over to an extension in which the agent is presumed to be a foreigner. [ABSTRACT FROM AUTHOR]

We examine optimal taxation and public good provision by a government that considers reduction of envy as a constraint. We adopt the extended envy-freeness proposed by Diamantaras and Thomson (1990. "A Refinement and Extension of the No-Envy Concept." Economics Letters 33: 217–22), called λ-equitability. We derive the modified Samuelson rule under an optimal nonlinear income tax and show, using a constant elasticity of substitution utility function, that the direction of distorting the original Samuelson rule to relax the λ envy-free constraint is crucially determined by the elasticity of substitution. Furthermore, we numerically show that the optimal level of provision increases (decreases) in the degree of envy-freeness when the original Samuelson rule is upwardly (downwardly) distorted. [ABSTRACT FROM AUTHOR]

• I find asking subjects about their demand for a public good can raise contributions. • Participants are more willing to free-ride if they don't have to misreport to do so. • In a game where message decides contribution, contributions initially exceed VCM. • Contributions are higher and sustained when subjects just report to their group. • This positive effect of sharing information is undermined by peer punishment. This paper studies the extent to which simply asking group members to report their demand-type promotes cooperation in a public goods experiment with private, unobservable incentives. The design uses a simple public goods game, in which group members differ in both their dominant strategy contributions and socially optimal contributions. Treatments are conducted in which individuals either do not report their private payoff information, report only to group members, report to group members who can punish them, or report to a binding mechanism that charges them the socially optimal contribution for someone of their reported type. In all cases, messages are non-verifiable and participants are told that they are free to lie. When participants are able to report their type, either to their group members or to a binding mechanism, they contribute more. When reporting to a mechanism, there is a positive effect initially that fades with repetition, while reporting to group members is particularly effective at sustaining cooperation over time. Further, the misreporting of type is less frequent, considered more dishonest, and punished more harshly than free-riding. Consistent with work showing that weak punishment can backfire, the punishment mechanism is underutilized in this environment and its presence negates the positive effect of sharing information. [ABSTRACT FROM AUTHOR]

• Incidence of turn-taking is limited to environment with homogeneous costs. • Individuals do not engage in turn-taking when the perfect turn-taking path is at odds with efficiency. • The timed contribution protocol limits the frequency of mis-coordinated outcomes. Cooperation can take several forms when a group of people interact repeatedly over time. Turn-taking is one such form of intertemporal cooperation that is observed in various daily activities, but at the same time, remains under-studied in the economics literature. We report results from experiments designed to investigate the path of intertemporal cooperation in three-person finitely repeated public good games without communication. Each round, only a subset of individuals is needed to contribute in order to generate a public benefit to all group members. Incidence of perfect turn-taking is limited to settings where the costs are homogeneous. When the perfect turn-taking path is at odds with efficiency, players seldom engage in taking turns. Private information about costs changes the timing of individual decisions within each round. A timed contribution protocol limits the frequency of miscoordinated outcomes every round. [ABSTRACT FROM AUTHOR]

Incomplete information exacerbates the problems inherent in collective action. Participants cannot efficiently coordinate their actions if they do not know each other's preferences. I investigate when ordinary communication, or cheap talk, may resolve mutual uncertainty in collective action problems. I find that the efficacy of communication depends critically on the relationship between contributions and the value of the joint project. The incentive barriers to honesty are highest when every contribution increases the project's value. Participants then have a strict incentive to say whatever would induce others to contribute the most, so cheap talk lacks credibility. By contrast, when contributions may be marginally worthless, such as when the project has no value unless contributions hit a certain threshold, communication may help participants avoid wasted effort. Using these findings, I identify which collective action problems in politics might benefit from communication and which require more expensive solutions to overcome uncertainty. [ABSTRACT FROM AUTHOR]

In many ethnically segregated countries, policy is directly linked to ethnicity, and thus, nonruling ethnic groups may suffer from the implemented policy. For these groups, a secession is one instrument to eliminate ethnic heterogeneity costs by implementing their own policy. However, leaving the country reduces economies of scale in the public good provision. Therefore, separatist ethnic groups face a trade-off between eliminating ethnic heterogeneity costs and losing economies of scale in the provision of public goods. I present a model for unraveling secessions in an ethnically segregated country. I use this model to derive conditions for the breakup of countries and to compare equilibrium behavior with and without the possibility of a consecutive secession. Among others, I find that a secessionist conflict will be more likely if there is a previous secession. Furthermore, aggregated conflict spending is larger in secessions with the possibility of a consecutive conflict. [ABSTRACT FROM AUTHOR]

Leadership (sequential choice) and political delegation are two mechanisms suggested to restrict "race-to-the-bottom" in tax competition. In this article, we analyze whether these two mechanisms when combined together would lead to unilaterally higher taxation or not. We show that political delegation with leadership in tax competition not only restricts race-to-the-bottom but also mitigates the possibility of overprovision of public good. In sequential choice game, only the follower region delegates taxation power to the policy maker but not the leader region. This puts a check on intensity of tax competition and restricts the under provision of public good. [ABSTRACT FROM AUTHOR]