We investigate how different sanctioning regimes and the quality of
local leaders affects public goods provision in Liberian villages. We
conduct a public goods experiment where leaders act as third-party
punishers under one of two exogenously imposed sanctioning regimes.
Under the first "flat fee" regime leaders receive a flat fee as
compensation but do not receive any monetary gains from punishment.
Under the second, "incentivised" regime leaders receive the punishment
(tokens taken from the game participants) as compensation. We use
villagers' perceived measures of corruption of their leader as our
preferred measure for leadership quality. To empirically distinguish
between sanctioning itself and the identity of the person sanctioning we
have a treatment variation where a random villager acts as the third
party punisher. We find that real village leaders elicit higher
contributions than random villagers or groups without sanctioning. We
also report that the effectiveness of sanctioning is attenuated by
chiefs that are perceived to be of low-quality, especially when the
sanctioner has no material incentive to punish. This suggests that
low-quality chiefs are less likely to exert effort for public goods if
they do not also privately benefit from it. Finally we find that
people's preferred regime choice seems to depend on their real-life
experiences in the village rather than their individual characteristics.
Current development programmes heavily rely on community self-management
and local institutions. Our paper supports the idea that a programme's
success is likely to depend on whether villagers deem their leader to be
credible norm enforcers.
Keywords: Corruption, Public goods, Monitoring, Sanctioning, Field Experiment
JEL Classification: C9, K42, O17, O12