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democracy, FTW

1 February 2011

A novel experiment is used to show that the effect of a policy on the level of cooperation is greater when it is chosen democratically by the subjects than when it is exogenously imposed. In contrast to the previous literature, our experimental design allows us to control for selection effects (e.g., those who choose the policy may be affected differently by it). Our finding implies that democratic institutions may affect behavior directly in addition to having effects through the choice of policies. Our findings have implications for the generalizability of the results of randomized policy interventions.

That is the abstract from an article (gated or previous ungated version) in the most recent American Economic Review by Pedro Dal Bó, Andrew Foster, and Louis Putterman. With all that’s going on in North Africa right now, I thought it might be interesting to read. Another tidbit:

Our findings suggest that democratic institutions may affect not only the types of policies adopted but also the impact of a given policy, so that a democratically selected policy will not have the same effect when imposed undemocratically.

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