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Profesores Principal
Juan Camilo Cárdenas
Local Environmental Control and Institutional Crowding-Out
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  • Local Environmental Control and Institutional Crowding-Out

World Development Vol. 28, No. 10, pp. 1719±1733, 2000

Regulations that are designed to improve social welfare typically begin with the premise that individuals are purely self-interested. Experimental evidence shows, however, that individuals do not typically behave this way; instead, they tend to strike a balance between self and group interests. From experiments performed in rural Colombia, we found that a regulatory solution for an environmental dilemma that standard theory predicts would improve social welfare clearly did not. This occurred because individuals confronted with the regulation began to exhibit less other-regarding behavior and made choices that were more self-interested; that is, the regulation appeared to crowd out other-regarding behavior.

 Cardenas etal WD.pdf 1,08 MB