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American Economic Review: Vol. 100 No. 5 (December 2010)

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Institutions and Behavior: Experimental Evidence on the Effects of Democracy

Article Citation

Dal Bó, Pedro, Andrew Foster, and Louis Putterman. 2010. "Institutions and Behavior: Experimental Evidence on the Effects of Democracy." American Economic Review, 100(5): 2205-29.

DOI: 10.1257/aer.100.5.2205

Abstract

A novel experiment is used to show that the effect of a policy on the level of cooperation is greater when it is chosen democratically by the subjects than when it is exogenously imposed. In contrast to the previous literature, our experimental design allows us to control for selection effects (e.g., those who choose the policy may be affected differently by it). Our finding implies that democratic institutions may affect behavior directly in addition to having effects through the choice of policies. Our findings have implications for the generalizability of the results of randomized policy interventions. (JEL C91, D02, D12, D72)

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Authors

Dal Bó, Pedro (Brown U)
Foster, Andrew (Brown U)
Putterman, Louis (Brown U)

JEL Classifications

C91: Design of Experiments: Laboratory, Individual
D02: Institutions: Design, Formation, and Operations
D12: Consumer Economics: Empirical Analysis
D72: Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior


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