Water Scarcity and Support for Costly Institutions in Public Goods:  Experimental Evidence from Cambodia

28 Pages Posted: 19 Oct 2022

See all articles by Tum Nhim

Tum Nhim

Wageningen University and Research (WUR)

Esther Schuch

affiliation not provided to SSRN

Andries Richter

Wageningen University and Research (WUR)

Abstract

Voluntary contributions to public goods are vulnerable to free riding. A potential solution is the implementation of a costly institutional arrangement that deters free riding behavior. In this paper, we analyze to what extent resource users are willing to bear those costs and vote in favor of costly institutions. We carried out lab-in-the-field experiments with Cambodian farmers in the Kampong Chhnang province. In the first experiment, the subjects played public goods games, with an option to vote for a costly institution with a minimum contribution level. In the second experiment, subjects voted between a costless weak enforcement mechanism and a costly strict enforcement mechanism. We find broad support for both costly institutions, and even more so if players had been exposed to resource scarcity in the past. Also, we find that many users support the costly institutions even when the implementation costs outweigh the benefits and the institutions are not necessarily welfare enhancing. This highlights the importance of institutional settings that are fair, even if this comes at efficiency costs.

Keywords: cooperation, Voluntary contribution mechanism, Water management, Institutional choice

Suggested Citation

Nhim, Tum and Schuch, Esther and Richter, Andries, Water Scarcity and Support for Costly Institutions in Public Goods:  Experimental Evidence from Cambodia. Available at SSRN: https://ssrn.com/abstract=4252187 or http://dx.doi.org/10.2139/ssrn.4252187

Tum Nhim

Wageningen University and Research (WUR) ( email )

Netherlands

Esther Schuch

affiliation not provided to SSRN

Andries Richter (Contact Author)

Wageningen University and Research (WUR) ( email )

Netherlands

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