Alex Armand (Nova SBE)

Public Service Delivery and Free Riding: Experimental Evidence from India

This paper provides novel evidence on the mechanisms driving the combination of poor-quality public services and high prevalence of non-payment (free riding) in low- and middle-income countries. We implement a field experiment in the slums of two major Indian cities and in the context of a fee-funded public service provided by community toilets. Collecting original surveys, behavioral and objective measurements, we show that an exogenous boost in the main- tenance quality of the service improves delivery and reduces free riding in a static and dynamic way, but excludes a share of residents from using the service. Providers react strategically to ex-ternal rewards by shifting their efforts towards monitoring activities. Excluded users are forced to dispose human waste in common-property, generating large health externalities. Residents demand more public intervention in the service provision.