or supporting the institution. This famous problem is known as the second-orderdilemma, or second-order public good (Oliver 1980; Bates 1988).From experiments and casual observations in reality, however, we have evidencethatpunishmentsystemsareindeedeffectivetoolstopromotecooperation.Asaresultof field studies, Elinor Ostrom (1990) worked out seven design principles, which arecrucial to the success or failure of a group or society facing a social dilemma. One of themissanctioning.
FehrandGächter(2000)showedexperimentallythatcostlypun-ishment opportunities, despite their dilemma characteristics, are used by the partici-pants and are able to raise and stabilize cooperation in a public good environment. Intheir experiment, they introduced a sanctioning system in which each participant hadto decide individually whether and to what extent he or she wants to punish anotherperson. The leverage, however, was rather high. The cost for imposing a fine onsomebody else was only one-third of the fine.Ifthecostsforpunishmentarehigh,however,membersofagroupprobablywishtodecidetogetheronthepotentialpunishmentoffreeriderssharingtheassociatedcosts.Ostrom(1990) reportscasesinwhichthedecisiononpunishmentwasfound inajointandorganizedway(e.g.,inavote).Anotherexample,theso-calledGrowthandStabil-ity Pact, contains a sanctioning system in which the members of the European Eco-nomic and Monetary Union (EMU) decide together on the punishment of countriesendangeringthestabilityoftheEuro.Acollectivesanctioningsystemmaybeusefulif the very structure of individual punishment bears strong incentives to abstain frompunishment (Weesie and Franzen 1998) or is likely to escalate and cause heavydamages.Two crucial questions may arise when designs of collective rules are considered:
1. Isitfeasiblethatpeopleacceptthecollectivedecisionwithallitsimplications,althoughthey favor a lower or higher punishment?2. Givenapositiveanswertoquestion1,whyisitnotfeasibletodirectlyenforceafullcon-tribution at the public good stage?
With respect to the first question, we argue that an institution, such as a collectivepunishment rule, issetup to continually gain benefitsfrom it.Opposing itin one casecouldputthewholeinstitutionatrisk.So,oncepeoplehaveerectedaninstitution,theywill probably continue to obey it for their long-term benefit. Moreover, it is conceiv-able that the enforcement of the institution is backed by an authority, which waserected by the people in advance and is out of control in the current situation. Ostrom(1990) reports on successful cases where people designed sophisticated systems toensurethatpunishmentcostsareshared.
Whetherpeopleareindeedwillingtosubmitthemselves to an institution, such as a collective punishment rule, is one of thequestions we seek to answer in this study.
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1. Although Ostrom’s main field of study is common pool resources (CPR), she argues that “giventhesimilaritybetweenmanyCPR problemsandtheproblemsofprovidingsmallscalecollectivegoods,thefindingsof this volumeshouldcontribute an understandingof . . . the capabilities of individualsto organizecollective action related to providing local public goods” (Ostrom 1990, 27).2. Shereports,forexample,onirrigationsystemsinSpainwhereguardsandso-called“ditchriders”werepaidformonitoring,reportingviolations,andbringingchargesagainstfarmers(Ostrom1990,69-78).