Institutions and Behavior: Experimental Evidence on the Effects of Democracy

• Published in: The American economic review Vol. 100; no. 5; pp. 2205 - 2229
• Main Authors: Bó, Pedro Dal, Foster, Andrew, Putterman, Louis
• Format: Journal Article
• Language: English
• Published: United States American Economic Association 01.12.2010; American Economic Assoc
• Subjects: Beauty pageants; Cooperation; Coordination games; Democracy; Economic models; Economic policy; Economic theory; Economics; Empirical research; Experiment design; Experiments; Games; Impact analysis; Institutionalism; Institutionenökonomik; Kooperation; Mathematical beauty; Numbers; Participation; Policy making; Political behaviour; Political economy; Politisches System; Preferences; Prisoners dilemma; Standardized tests; Statistical significance; Studies; Theorie; Verhaltensökonomik; Voting; Voting behavior
• ISSN: 0002-8282; 1944-7981
• DOI: 10.1257/aer.100.5.2205

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.