Full Agreement and the Provision of Threshold Public Goods

The experimental evidence suggests that groups are inefficient at providing threshold public goods. This inefficiency appears to reflect an inability to coordinate over how to distribute the cost of providing the good. So, why do groups not just split the cost equally? We offer an answer to this question by demonstrating that in a standard threshold public good game there is no collectively rational recommendation. We also demonstrate that if full agreement is required in order to provide the public good then there is a collectively rational recommendation, namely, to split the cost equally. Requiring full agreement may, therefore, increase efficiency in providing threshold public goods. We test this hypothesis experimentally and find support for it

Do cash transfers crowd out community investment in public goods? Lessons from a field experiment on health education

Contains fulltext : 102445.pdf (publisher's version ) (Closed access)This article discusses voluntary contributions to health education in Peru, using a new experimental setup to identify voluntary contributions to local public goods. The experiment enables individuals to contribute to a health education meeting facilitated by an NGO, which they know will only be organized if the cumulative investment level exceeds a certain threshold value. In contrast to expectations of aid distributors, individuals contributed a substantial amount of money, despite the supposed long-term nature of the benefits. The result suggests that donor paternalism, undermining the agency of beneficiaries to exercise control over funds, is not always necessary to guarantee investment in local public goods. We explore multiple interpretations, suggesting that "unaccounted for" short-term benefits from participation as well as liquidity and paternalistic altruism add to explaining the relatively high investment. More in general, the article shows the potential for using experimental research methods in the area of nonprofit management.25 p