A Dividend of Democracy
- Author(s)
- Thomas Markussen, Jean-Robert Tyran
- Abstract
Do democratically chosen rules lead to more cooperation and, hence, higher efficiency, than imposed rules? To discuss when such a “dividend of democracy” obtains, we review experimental studies in which material incentives remain stacked against cooperation (i.e., free-riding incentives prevail) despite adoption of cooperation-improving policies. While many studies find positive dividends of democracy across a broad range of cooperation settings, we also report on studies that find no dividend. We conclude that the existence of a dividend of democracy cannot be considered a stylized fact. We discuss three channels through which democracy can produce such a dividend: selection, signaling, and motivation. The evidence points to the role of “culture” in conditioning the operation of these channels. Accepting a policy in a vote seems to increase the legitimacy of a cooperation-inducing policy in some cultures but not in others.
- Organisation(s)
- Department of Economics, Vienna Center for Experimental Economics
- External organisation(s)
- University of Copenhagen
- Pages
- 235-243
- No. of pages
- 9
- DOI
- https://doi.org/10.4337/9781802207750.00039
- Publication date
- 11-2025
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502027 Political economy, 502057 Experimental economics
- Keywords
- Portal url
- https://ucrisportal.univie.ac.at/en/publications/1c5135c1-86ad-4f49-a69f-88e01a1f8cbe