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Does redistribution affect cooperation and trust?

Author

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  • Ranehill, Eva
  • Weber, Roberto A.
  • Wu, Keyu

Abstract

We experimentally investigate the degree to which redistribution, the act of taking money from some individuals and giving it to others, affects social capital in groups. We measure social capital as the degree to which group members exhibit cooperativeness, trust and trustworthiness toward one another. Our experiment involves several rounds of real-effort production, in which we vary the degree to which individual income is redistributed at the end of each round according to either progressive or regressive redistributive policies. We find no statistically significant impacts of such experience with redistribution on any of our primary measures of social capital. Exploratory work considering heterogeneous impacts by relative income positions and using alternative measures of social capital also yields no reliable impacts. We observe some impacts of redistribution on productivity.

Suggested Citation

  • Ranehill, Eva & Weber, Roberto A. & Wu, Keyu, 2024. "Does redistribution affect cooperation and trust?," Journal of Economic Behavior & Organization, Elsevier, vol. 226(C).
    • Handle: RePEc:eee:jeborg:v:226:y:2024:i:c:s0167268124003007
    DOI: 10.1016/j.jebo.2024.106694
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    Keywords

    Social capital; Redistribution; Trust; Cooperation; Experiment;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other

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