Conservation of Natural Resources: Which Matters – Having a Regulation or the Size of the Penalty Imposed?
In this chapter, I investigate through a public good in rural Colombia how different institutional arrangements, particularly different external regulations, with a common characteristic—an external regulator with a weak enforcement capacity—derive into different contributions and compliances. I tested two monetary regulations and found that high penalties very often do more harm than good. I also found that low penalties and public and private reminders were very effective at increasing cooperation and rule compliance.
KeywordsInstitutional Arrangement Regulation Treatment Group Project External Regulation Social Optimum
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