A new working paper has been added to the NOVAFRICA Working Paper Series, written by Alex Armand, Britta Augsburg, and Antonella Bancalari.
Title: “Coordination and the Poor Maintenance Trap: an Experiment on Public Infrastructure in India”
Alex Armand – (Nova School of Business and Economics and NOVAFRICA)
Britta Augsburg – (Institute for Fiscal Studies)
Antonella Bancalari – (School of Economics and Finance, University of St. Andrews, and Institute for
Poorly maintained public infrastructure is common in poorer countries, but very little
is known about the obstacles leading to such equilibrium. By experimentally identifying
the impact of incentives for maintenance for both providers and potential users, this paper
provides one of the first economic analyses of provider–user dynamics in the presence of
local coordination failure. We randomly allocate shared sanitation facilities in two major
Indian cities to either a control or two treatments: the first incentivizes maintenance
among providers, while the second adds a sensitization campaign about the returns of a
well-maintained facility among potential users. Using a wide range of survey, behavioral
and objective measurements, we show that maintenance does not favor collective action.
The treatments raise the quality of facilities and reduce free riding, but at the cost of user
selection, with consequences for public health. While potential users’ willingness to pay
and cooperation are unaffected, their demand for public intervention increases. Sensitization
raises awareness among potential users but does not alter their behavior.
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