Sanctioning and Trustworthiness across Ethnic Groups: Experimental Evidence from Afghanistan

62 Pages Posted: 2 Oct 2018

See all articles by Vojtech Bartos

Vojtech Bartos

Ludwig Maximilian University of Munich (LMU)

Ian Levely

Wageningen University

Date Written: August 08, 2018

Abstract

We show how sanctioning is more effective in increasing cooperation between groups than within groups. We study this using a trust game among ethnically diverse subjects in Afghanistan. In the experiment, we manipulate i) sanctioning and ii) ethnic identity. We find that sanctioning increases trustworthiness in cross-ethnic interactions, but not when applied by a co-ethnic. While we find higher in-group trustworthiness in the absence of sanctioning, the availability and use of the sanction closes this gap. This has important implications for understanding the effect of institutions in developing societies where ethnic identity is salient. Our results suggest that formal institutions for enforcing cooperation are more effective when applied between, rather than within, ethnic groups, due to behavioral differences in how individuals respond to sanctions.

Keywords: sanctions, cooperation, crowding out, moral incentives, ethnicity, Afghanistan

JEL Classification: D010, D020, C930, J410

Suggested Citation

Bartos, Vojtech and Levely, Ian, Sanctioning and Trustworthiness across Ethnic Groups: Experimental Evidence from Afghanistan (August 08, 2018). CESifo Working Paper Series No. 7179, Available at SSRN: https://ssrn.com/abstract=3254212 or http://dx.doi.org/10.2139/ssrn.3254212

Vojtech Bartos (Contact Author)

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Ian Levely

Wageningen University ( email )

Hollandseweg 1
Wageningen, 6706KN
Netherlands

HOME PAGE: http://www.IanLevely.com

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