Devesh Rustagi - Behavioral Origins of Institutions: Evidence from Ethiopia (Aula H)

Speaker:  Devesh Rustagi - Goethe University Frankfurt
  Monday, February 17, 2014 at 12:30 PM Aula H
This paper examines the effect of other regarding preferences (conditional cooperation) on the formation of institutions by groups engaged in commons management in Ethiopia. Conditional cooperation is measured using a public goods game with 720 individuals from 52 groups. Owing to the plausible endogeneity of conditional cooperation, I use distances to mosque and market as instruments. Mosque and market locations were determined by historical events and are thus exogenous to groups. The further a group is located from a mosque and a market, the lower is its conditional cooperation. Groups with higher conditional cooperation are significantly more likely to form commons management institutions. These institutions have a large positive effect on group performance which persists over time.

Programme Director
Marcella Veronesi

Publication date
January 23, 2014