Group Incentives for the Public Good: A Field Experiment on Improving the Urban Environment

Abstract

How to effectively maintain communal spaces is an important concern in many developing countries, particularly in urban environments. But what strategies can communities use to overcome the public goods problems involved in maintaining their local environment? In this paper, we investigate whether changing the incentives for a subset of the community to contribute to the public good can lead to a shift to a more efficient equilibrium for the community as a whole. We use a randomized controlled trial to test the effectiveness of a program called “Operation Clean Neighborhood”, which targets established Community Based Organizations and encourages them, through social recognition and low-value in-kind incentives, to work towards keeping their neighborhoods clean, with the ultimate goal of also reducing flooding in these areas. After one year, we find that our intervention is effective in engaging communities and in improving the cleanliness of the neighborhood and also find evidence that this leads to reduced levels of flooding. We uncover important differences in the effectiveness of the program between areas which have had increased investment in drainage infrastructure and those which have not. In our analysis we also address the issue of spillovers, an important consideration in densely populated urban centers.