Social and Financial Incentives for Overcoming Collective Action Problems

ABSTRACT

We study the effect of social and financial incentives on communities' ability to overcome collective action problems. Our specific context is a sample of 107 villages (approximately 19,000 households) in rural Bangladesh, and the collective action problem we study is investment in hygienic latrines and their subsequent maintenance and use. We randomized (1) whether and what type of incentive was provided ­ a financial reward or a non-financial "social recognition" reward, and (2) whether and what type of verbal commitment the households were encouraged to make ­ a private pledge vs. a public pledge. We measure short-term (3 months) and medium-term (12-15 months) effects, and investigate the mechanisms behind the effects.