Democracy and resilient pro-social behavioral change: an experimental study

Soc Choice Welf (2016) 47:359–378 DOI 10.1007/s00355-016-0967-y ORIGINAL PAPER Democracy and resilient pro-social behavioral change: an experimental study Kenju Kamei1 Received: 28 December 2015 / Accepted: 5 May 2016 / Published online: 26 May 2016 © The Author(s) 2016. This article is published with open access at Springerlink.com Abstract Both experimental and empirical studies have shown that democratically imposing a policy that encourages cooperation may increase its effectiveness by enhancing the voters’ cooperation behavior. But, do those involved in the democratic decision-making process change their behavior when faced with an exogenously implemented rule? This paper experimentally shows that the voters that are involved in a successful democratic selection of a policy behave more pro-socially as consistent with recent studies. My experiment moreover shows that such a successful democratic imposition of the policy may increase the voters’ level of cooperation even when the policy is undemocratically imposed. I am grateful to Pedro Dal Bó for invaluable guidance, discussions, encouragement, and making NSF grant SES-0720753 available for this experiment. I am also grateful to Louis Putterman for continuous advice, discussions and constant support, and to Brian Knight for insightful suggestions and discussions, and seminar audiences at Brown University, George Mason University, University of Vienna, the 81st Annual Meetings of the Southern Economic Association and 2011 Annual International Meeting of the Economic Science Association for helpful suggestions. I thank Urs Fischbacher for sharing his z-tree file used in Falk et al. (2013) with me. I thank the editor, Maggie Penn, and two anonymous referees for their helpful comments. Electronic supplementary material The online version of this article (doi:10.1007/s00355-016-0967-y) contains supplementary material, which is available to authorized users. B Kenju Kamei ; 1 Department of Economics, University of Durham, Durham, UK 123 360 K. Kamei 1 Introduction Democratic decision processes, in which rules are collectively selected by voting, are used in most societies and organizations today. Both empirical and experimental research suggests that the process by which a policy is implemented may change its outcome by affecting people’s level of cooperation on the relevant voted issue through various channels. There are three effects, among others, that democratic processes are known to have: the effects of a selection bias through the endogenous processes (i.e., selection effects), the effects of signals sent through the voting processes, and the democracy premium, which is an effect directly influencing people’s behavior (i.e, the residual that cannot be explained by the selection or signaling effects). The literature suggests that the third residual effect may be non-negligible (e.g., Bardhan 2000; Dal Bó et al. 2010; Frey 1997; Sutter et al. 2010, and Tyran and Feld 2006).1 Especially, Dal Bó et al. (2010) and Tyran and Feld (2006) find that the democracy premium may be substantial when a policy that can resolve or mitigate a problem is successfully implemented democratically. Another possible effect that democratic policy selections may have, related to the democracy premium, is changing people’s behavior outside the democratic environment. There is large literature on spill-over or transfer of institutional effects on people’s behavior from perspectives of other behavioral theories. First, according to the behavioral game theory, there is the so-called behavioral spill-over phenomenon. This refers to the situation where subjects’ decisions in an environment can be influenced by their own other decisions made in different environments (e.g., Bednar et al. 2012; Cason et al. 2012). Second, other studies have demonstrated that the negative effect of the use of monetary incentives in a task—motivation crowding-out—can be transferred to areas indirectly related to the incentivized task such as tasks without it (e.g., Frey 1993; Frey and Benz 2001; Osterloh and Frey 2000; Frey and Jegen 2001).2 An indirect institutional effect in the context of democratic decision-making would be one that changes the voters’ behavior as a policy intends to even when the policy is undemocratically imposed, if they have experienced a successful democratic implementation of a policy in one area. This is a transfer of motivation crowding-in. For example, imagine a situation where students collectively imposed a No Smoking Policy, an ordinance whose violation is not punishable, into your school by voting. In this example, the students might be more likely to comply with the No Smoking Policy, compared with when the university exogenously imposed it without reflecting their votes or voices; but not only that, they might also become more likely to comply with the No Smoking Policy in public libraries where the rule was autocratically implemented if intrinsic motivations are crowded in among the students. Apart from these behavioral or institutional theories, income inequality-averse models, such as the prominent Fehr and Schmidt (1999), also predict such positive spill-over effects. Suppose that an inequality-averse person sees that her group 1 See Dal Bó (2010) for a summary of experimental evidence. 2 Also see Gneezy and Rustichini (2000). 123 Democracy and resilient pro-social behavioral. . . 361 collectively imposed a policy by voting. Suppose also that she expects that her group members are more likely to respond to the incentive change and behave more cooperatively because it was democratically chosen; and that accordingly mutual cooperation would be more easily attained. In this circumstance, she may raise her compliance, that is, increase her level of cooperation, also in her other group where a policy is autocratically imposed, as her income inequality with the others in the undemocratic environment would increase otherwise. Despite its possibility, such a spill-over effect on the voters’ behavior has not received attention in experimental research. We conduct a laboratory experiment in order to explore a possibility of a spillover effect on the voters’ behavior triggered by democratic decision-making. The specific question asked in this paper is: Does succeeding in democratically imposing a non-deterrent sanction policy in a cooperation dilemma raise the voters’ level of cooperation even with an undemocratically imposed policy? Our experiment is based on the framework of a standard linear public goods game. The key design feature is that each subject belongs to two groups with distinct partners and simultaneously plays two public goods games. Each subject is given a fixed endowment for each group and makes an allocation decision between the private account and the public account in that group. Experimental parameters are set so that contributing zero points to the public account in each group is privately optim (...truncated)