infonet-economy

How effectively do democratic institutions provide public goods? Despite the incentives an elected leader has to free ride or impose majority tyranny, our experiment demonstrates that electoral delegation results in full provision of the public good. Analysis of the experimental data suggests that the result is primarily due to electoral selection: groups elect prosocial leaders and replace those who do not implement full contribution outcomes. However, we also observe outcomes in which a minimum winning coalition exploits the contributions of the remaining players. A second experiment demonstrates that when electoral delegation must be endogenously implemented, individuals voluntarily cede authority to an elected agent only when preplay communication is permitted. Our combined results demonstrate that democratic delegation helps groups overcome the free-rider problem and generally leads to outcomes that are often both efficient and equitable.