Diversity and the provision of public goods: Experimental evidence from South Africa

Abstract

We report the results from a series of public goods games in which the racial composition of the group was exogenously varied. Contrary to predictions from social psychology, we find that visible racial homogeneity in a group does not uniformly predict higher contributions to the public account. Rather, our results suggest that in homogenous groups, observable racial identity may convey information about heterogeneity in other dimensions, especially where race is highly correlated with diversity in other dimensions, such as linguistic diversity, low intra-group trust and socio-economic need. Thus, racial identity loses its salience in the absence of any visibly identifiable out-group members, but other dimensions of identity increase their salience. Moreover, while communication has a large and significant positive effect on contributions to the public pool, patterns of communication are affected by the racial composition of the group.