Endowment Effect or Institutions? An Experimental Test of the Differential Accountability Hypothesis in Uganda

Study Background: 

The prevailing explanation for the differential willingness to sanction and monitor tax revenues is the existence of a psychological response to taxation, often called the endowment effect. Yet, when citizens are evaluating officials’ behavior and the welfare benefits of government

spending from different sources, their willingness to sanction and monitor may be driven by more than just a psychological aversion to loss and a desire to recover their taxed private revenue in the form of public goods provision. Revenues may differ not only in where they come from but also in how they are tracked, distributed, and managed. Existing studies have, in general, paid little attention to these institutional differences, nor attempted to distinguish between effects driven by such differences and those driven by psychological mechanisms such as the endowment effect.


Study Objective: 

This research program was designed to add to the knowledge about how members of a community interact with local leaders and service providers. In particular, it is concerned with whether citizens’ engagement in monitoring service providers improves when they have directly contributed resources to the services provided. While many policy makers and academics have assumed that this is the case, there is no rigorous evidence evaluating the claim. This study is important because without better information, there is a risk of wasting limited development resources on ineffective or harmful programs.

Study Approach: 

To evaluate the research question, a set of field-based behavioral simulations that mimicked interactions between citizens and their local-level leaders and service providers was developed. These simulations were based on similar activities conducted in over a dozen countries in the Americas, Europe, Africa, and Asia. In these simulations, individuals are placed into groups of 1 citizen and 1 “service provider” or “local leader”. The service provider is then given a group fund that in some cases comes from a contribution paid by the citizen, and in other cases, is simply given by the enumerators. The citizen must then decide which divisions of the money he would approve of. If the citizens ask for higher levels of “services” (represented by transfers from the service provider) when they are being taxed, it suggests that community contributions could help to improve service delivery in local areas.

Ignosi Research Role: 

Ignosi Research assumed primary responsibility for implementing all field activities for the Pilot, and data collection phases of the study. We are also currently in discussions to with Researchers at Princeton university to do a larger country wide study of the same starting in April 2018. Our responsibilities so far have included:

  • Project planning and management: obtaining relevant research approvals, budgeting, recruiting, training & supervising field teams, and ensuring adherence to the study’s experimental protocols.
  • Quantitative and qualitative data collection management: designing survey instruments, electronic survey programming, data cleaning, and preliminary analysis
  • Study Coordination: liaising between Principal Investigators at Princeton University; obtaining ethical clearance for the research, plus providing support on the development of research protocols.
Time line: 
November 2016 - August 2017
USD 60,000
Princeton University
Kampala District, Uganda
Sample Size: 
1200 particiapnts