An important part of the debate about self versus state-governance involves a discussion about enforcement mechanisms. While some scholars argue that private enforcement mechanisms work sufficiently well in supporting cooperation, others cite the downfalls of private mechanisms so as to legitimize government enforcement. This paper focuses on the interplay between government and private enforcement mechanisms. Using an experimental approach, we demonstrate two results. First, we show that government enforcement, in the form of a centralized monetary punishment in our experiment, can be useful if aligned with and implemented after a private form of enforcement, namely peer disapproval. However, our second result suggests that the removal of government enforcement leads to a substantial decrease in overall cooperation levels—cooperation levels are higher under private enforcement when subjects had never experienced government enforcement compared to when they had been exposed to government enforcement. Specifically, the removal of government enforcement undermines the power of the remaining private enforcement mechanism to affect the behavior of free-riders.
KeywordsSelf-governance Private enforcement Peer control Government enforcement Public goods
JEL ClassificationC92 D70 H41 K42
We thank Christoph Engel, Yuval Feldman, Remi Gaultier, Sven Hoeppner, David Masclet, David Rand and Jeroen van de Ven for their helpful comments at various stages of this work. This paper also benefited from comments by the associate editor Peter T. Leeson, two anonymous referees, and participants at the ETH Workshop on Social Norms and Institutions, the Montpellier Experimental Economics Workshop, the 2015 French Association for Experimental Economics meeting (PSE), and the MetaLawEcon Workshop at the Amsterdam Center for Law and Economics. We thank Dimitri Dubois for programming the experiment. We are grateful to the French Agency for the Energy and Environmental Management (ADEME) for its financial support.
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