Working Paper

2015-05-28

Southern Africa Labour and Development Research Unit

University of Cape Town

We explore the effect of income inequality and social attitudes on the cooperation and sanctioning in nine South African fishing communities where allocation of fishing rights have been unequal and controversial. In the Punishment treatment aggregate contributions towards the public good are significantly higher amongst unequal groups, with low endowment players contributing the greatest endowment share. Sanctioning is significantly lower in unequal groups but demand for punishment is similar, irrespective of differences in relative costs. Free-riding drives punishment, but retaliation is another important motivator (specifically in unequal groups). In equal groups "antisocial" punishment of co-operators is more common. The effect of real wealth and inequality on contributions and punishment is less salient possibly due to real wealth not being discernible in the experimental context. Interestingly, social attitudes are important in explaining sanctioning behaviour, indicating that distrust in formal institutions and specifically in the top-down quota allocation process may have a significant impact on behavioural outcomes and the effectiveness of community sanctioning mechanisms.

JEL Classification: C9,D63,H41,Q2

Martine Visser is Associate Professor within School of Economics at the University of Cape Town. She is on the Executive Committees of the Environmental–Economics Policy Research Unit (EPRU) and the Research Unit for Behavioral Economics and Neuroeconomics (RUBEN) and a research associate of the South African Labour and Development Research Unit (SALDRU). She is also on the Steering Committee for the African Climate Development Initiative (ACDI).

Justine is an Associate Professor in the School of Economics, and a research associate of the Southern African Labour and Development Research Unit.