The Effect of Social Fragmentation on Public Good Provision: an Experimental Study
Paper number: 12/07
Paper Category: Discussion Paper
Surajeet Chakravarty and Miguel A. Fonseca
We study the role of social identity in determining the impact of social frag- mentation on public good provision using laboratory experiments. We nd that as long as there is some degree of social fragmentation, increasing it leads to lower public good provision. This is mainly because the share of those who contribute fully to the public good diminishes with social fragmentation, while the share of free-riders is unchanged, which suggests social identity preferences drive our re- sult, as opposed to self-interest. Importantly, socially homogeneous groups do not generate the highest contributions: some social diversity is actually welfare- improving. Finally, social fragmentation is felt dierently for visible minorities, whose contributions are higher than minority groups whose actions are not iden- tifiable.