Redistribution and Group Participation: Experimental Evidence from Africa and the UK

44 Pages Posted: 6 Feb 2018

See all articles by Marcel Fafchamps

Marcel Fafchamps

Stanford University - Freeman Spogli Institute for International Studies

Ruth Vargas Hill

World Bank

Date Written: February 5, 2018

Abstract

This paper investigates whether the prospect of redistribution hinders the formation of efficiency-enhancing groups. An experiment is conducted in a Kenyan slum, Ugandan villages, and a UK university town and used to test, in an anonymous setting with no feedback, whether subjects join a group that increases their endowment but exposes them to one of three redistributive actions: stealing, giving, or burning. Exposure to redistributive options among group members operates as a disincentive to join a group. This finding obtains under all three treatments -- including when the pressure to redistribute is intrinsic. However, the nature of the redistribution affects the magnitude of the impact. Giving has the least impact on the decision to join a group, whilst forced redistribution through stealing or burning acts as a much larger deterrent to group membership. These findings are common across all three subject pools, but African subjects are particularly reluctant to join a group in the burning treatment, indicating strong reluctance to expose themselves to destruction by others.

Suggested Citation

Fafchamps, Marcel and Hill, Ruth Vargas, Redistribution and Group Participation: Experimental Evidence from Africa and the UK (February 5, 2018). World Bank Policy Research Working Paper No. 8330, Available at SSRN: https://ssrn.com/abstract=3118716

Marcel Fafchamps (Contact Author)

Stanford University - Freeman Spogli Institute for International Studies ( email )

Stanford, CA 94305
United States

Ruth Vargas Hill

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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