Leading-by-example and the voluntary provision of public goods in rural areas: Experimental evidence from China

Abstract

Comparing randomly selected and real-world political leaders, this paper investigates the effect of leading-by-example on voluntary contributions in a linear contribution mechanism public goods game experiment with 550 residents in rural China. This setting provides a unique social structure, shaping people’s responses to leadership. We find that leading-by-example set by political leaders and randomly selected leaders increases participants’ contribution by 1.432 and 1.162 Chinese Yuan, which is an increase of approximately 22 and 18 per cent of average contributions in the control group. The difference in the effects of leading-by-example set by political leaders and randomly selected leaders is small and statistically insignificant. Contributions under the leading-by-example treatments are driven by increased contributions from leaders and mimicking behaviour of followers, although following political leaders is weaker. Our findings highlight the crucial role of leading-by-example and strong village-level institutions in the provision of public goods.