Distributional Consequences of Voluntary Contributions to Public Goods: Self-Serving Philanthropy in Ottoman Istanbul
Posted: 24 Oct 2019 Last revised: 24 Mar 2021
Date Written: April 12, 2020
While philanthropy is seen as a critical instrument for wealth redistribution in countries with low state capacity or weak welfare institutions, there is little empirical evidence of its distributional consequences. How does philanthropic public good provision affect inequalities in access to services across ethnic and social groups? Can altruistic motives trump personal benefit considerations? I answer these questions by exploiting the fact that fountains in Ottoman Istanbul, a city with rigid religious and social cleavages, were built by the private initiatives of the Muslim elite through the waqf system. Using a dataset on water provision from 1868, I find significant evidence that elites used philanthropy to disproportionately benefit themselves and their co-ethnics. Elite neighborhoods were more likely to have water access and had more fountains. Also, Muslim neighborhoods were philanthropically better endowed than non-Muslim neighborhoods. I conclude that philanthropy can reproduce or even exacerbate inequalities in access to essential services.
Keywords: Public Goods, Elites, Ottoman Empire, Waqfs, Ethnic Diversity
JEL Classification: N95, R53, R12, I31, Z13
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