Financial rewards do not stimulate coproduction: Evidence from two experiments

Abstract

Western governments are increasingly trying to stimulate citizens to coproduce public services by, among other strategies, offering them financial incentives. However, there are competing views on whether financial incentives stimulate coproduction. While some argue that financial incentives increase citizens ’ willingness to coproduce, others suggest that incentives decrease their willingness (i.e., crowding out). To test these competing expectations, the authors designed a set of experiments that offered subjects a financial incentive to assist municipalities in helping refugees integrate. The experiment was first conducted among university students within a laboratory setting. Then, the initial findings were replicated and extended among a general adult sample. Results suggest that small financial rewards have no effect: they neither increase nor decrease people’s willingness to coproduce. When the offered amount is increased substantially, willingness to coproduce increases only marginally. Hence, financial incentives are not a very costefficient instrument to stimulate coproduction