Local Leadership and the Voluntary Provision of Public Goods: Field Evidence from Bolivia
Abstract: We conduct a controlled field experiment in 52 communities in rural Bolivia to investigate the effect that local authorities have on voluntary public good provision. In our study, community members pool resources to provide environmental education material for local schools. We find that voluntary contributions increase when democratically elected local authorities lead by example. The results are driven by two factors: (1) individuals give more when they are called upon to lead than when they give in private, and (2) high leader contributions increase the contributions of others. Both effects are stronger when authorities, as compared to randomly selected community members, lead by example. We explore two underlying channels of leadership influence. First, we show that leaders signal information about the quality of the public good through their contribution decisions. Second, we explore how leader characteristics affect the likelihood that others follow. Specifically, our study shows that randomly selected community members are more influential the more they resemble authorities on observable characteristics.
