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Institutions and Behavior: Experimental Evidence on the Effects of Democracy

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  • Pedro Dal Bo
  • Andrew Foster
  • Louis Putterman

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)

Suggested Citation

  • Pedro Dal Bo & Andrew Foster & Louis Putterman, 2010. "Institutions and Behavior: Experimental Evidence on the Effects of Democracy," American Economic Review, American Economic Association, vol. 100(5), pages 2205-2229, December.
    • Handle: RePEc:aea:aecrev:v:100:y:2010:i:5:p:2205-29
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    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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