Inequality, institutions, and their impacts on social cooperation
with Smriti Sharma and Saurabh Singhal
We examine the effects of randomly introduced economic inequality on voluntary cooperation, and whether this relationship is influenced by the quality of local institutions, as proxied by corruption. We use representative data from a large-scale lab-in-the-field public goods experiment with over 1,300 participants across rural Vietnam.
Our results show that inequality adversely affects aggregate contributions, and this is on account of high endowment individuals contributing a significantly smaller share than those with low endowments. This negative effect of inequality on cooperation is exacerbated in high corruption environments.
We find that corruption leads to more pessimistic beliefs about others’ contributions in heterogeneous groups, and this is an important mechanism explaining our results. In doing so, we highlight the indirect costs of corruption that are understudied in the literature. These findings have implications for public policies aimed at resolving local collective action problems.
About the speakers
Smriti Sharma is a Lecturer (Assistant Professor) in Economics at Newcastle University, England. Her research specialization is in development economics, labour economics, and behavioural economics. Within these fields, her work spans the following three areas: (i) education, skills and labour markets; (ii) political economy of development; and (iii) caste and gender-based disadvantage and discrimination. She works with both secondary data and primary data collected using surveys and experiments.
Saurabh Singhal is a Senior Lecturer in Economics at Lancaster University Management School. He holds a PhD in Economics from the University of Southern California, and has previously worked at UNU-WIDER and at the University of Delhi. His research interests include human capital accumulation and labour market issues in developing countries, political economy, and experimental economics.
WIDER Seminar Series
The WIDER Seminar Series showcases the latest research on key topics in development economics. It provides a forum for senior and early-career researchers, both inhouse and external, to present recent and ongoing work related to UNU-WIDER’s current work programme.
In addition to providing a forum for both academic debate and training, the series presents an opportunity for policy makers and others interested in development to learn about the latest research methods and findings.
In autumn 2021, the Seminar Series events take place on Wednesdays from 16:00–17:00. All those interested are invited to register and attend via Zoom. Presentations will be available after the event here.