The Impact of Transfers on Citizen Cooperation: Theory and a Lab-In-The-Field Test in Mexico

Abstract

Governments commonly use aid and social programs to garner citizen support during conflict, garner electoral support in democracies, and thwart collective action in autocracies. I explore whether monetary transfers increase citizens' cooperation with an authority. To do so, I develop a game-theoretic model of citizen contribution to a public good from which an authority benefits. I test the model's implications by setting up a lab-in-the-field in Mexico. The model and the empirical test are designed to analyze variations in both of citizens' intrinsic and extrinsic motivations to cooperate with the authority. The results show that citizens reduce their cooperation rates when an authority can spend money but does not. The results are consistent with a reduction in citizens' intrinsic motivation when the authority actively chooses not to spend.