John R. Hamman
Economics and Decision ScienceAn Experimental Investigation of Delegation, Voting, and the Provision of Public Goods
with Roberto Weber and Jonathan Woon
Decentralized, voluntary institutions such as markets will often fail to provide public goods because of the well-known free rider problem. One justification for government is that it solves this problem and provides public goods by using its coercive power. Although theoretical and experimental social scientists have been interested in political mechanisms for providing public goods, the existing literature is largely confined to direct democracy in which citizens make and vote directly on proposals. We conduct a series of laboratory experiments to investigate the public good decisions made in a representative democracy. That is, our political environment is closer to real world political institutions in which citizens delegate decision making to a subset of the population. In our experiments, subjects play a repeated public goods game under alternative institutional conditions. We compare a decentralized institution (voluntary contributions) with the election (prior to each period) of a single executive who chooses each individuals contribution level. We find that under the centralized political institutions, groups provide significantly higher levels of the public good and often provide the socially efficient level. However, we also find instances of majority tyranny in which minimum winning coalitions form in order to free ride off of the remaining group members. Communication appears to increase coordination in voting behavior but only has small effects on public good outcomes.
