Providing Global Public Goods: Electoral Delegation and Cooperation

54 Pages Posted: 27 Jul 2014 Last revised: 7 Oct 2014

See all articles by Martin G. Kocher

Martin G. Kocher

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics; Institute for Advanced Studies (IHS) - Department of Economics & Finance; Göteborg University - School of Business, Economics and Law; Queensland University of Technology - School of Economics and Finance

Fangfang Tan

Max Planck Institute for Tax Law and Public Finance

Jing Yu

Ludwig Maximilian University of Munich (LMU)

Multiple version iconThere are 2 versions of this paper

Date Written: July 25, 2014

Abstract

This paper experimentally examines the effect of electoral delegation on providing global public goods shared by several groups. Each group elects a delegate who can freely decide on each group member’s contribution to the global public good. Our results show that people mostly vote for delegates who assign equal contributions for every group member. However, in contrast to standard theoretical predictions, unequal contributions across groups drive cooperation down over time, and it decreases efficiency by almost 50% compared to the benchmark. This pattern is not driven by delegates trying to exploit their fellow group members, as indicated by the theory – quite to the opposite, other-regarding preferences and a re-election incentives guarantee that delegates assign equal contributions for all group members. It is driven by conditional cooperation of delegates across groups. Since the source of the resulting inefficiency is the polycentric nature of global public goods provision together with other-regarding preferences, we use the term Pinefficiency to describe our finding.

Keywords: Global Public Goods, Delegation, Cooperation, Experiment

JEL Classification: C92, D72, H41

Suggested Citation

Kocher, Martin G. and Tan, Fangfang and Yu, Jing, Providing Global Public Goods: Electoral Delegation and Cooperation (July 25, 2014). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2014-12. Available at SSRN: https://ssrn.com/abstract=2471511 or http://dx.doi.org/10.2139/ssrn.2471511

Martin G. Kocher

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

Institute for Advanced Studies (IHS) - Department of Economics & Finance ( email )

Stumpergasse 56
A-1060 Vienna, A-1060
Austria

Göteborg University - School of Business, Economics and Law ( email )

Vasagatan 1
Goteborg, 40530
Sweden

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

Fangfang Tan (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/public_economics/public_economics_people/fangfang_tan.cfm

Jing Yu

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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