Does public policy crowd out private contributions to public goods?

Abstract

Abstract: It is sometimes claimed that individuals’ contributions to public goods are not motivated by economic costs and benefits alone, but that people also have a moral or norm-based motivation. A number of studies indicate that such moral or norm-based motivation might be crowded out, or crowded in, by public policy. This paper discusses some models that can yield insight into the interplay between economic and moral or norm-based motivation for voluntary contributions to public goods, and compares their policy implications. We distinguish between four types of models: Altruism models, social norm models, models of commitment and the cognitive evaluation theory. Keywords: Private provision, altruism, social norms, commitment.