Published online by Cambridge University Press: 18 September 2017
Past research shows that ethnic diversity reduces the ability to sanction norm violators, ultimately undermining cooperation. We test this directly by experimentally varying the ethnic composition of groups playing a dictator game with third-party punishment among two ethnic groups along the Kenya–Tanzania border. We also implement a structurally identical game where the endowment division is randomly determined in order to isolate a punishment motivation from the motivation to rectify income inequality. While costly income adjustment in both games is driven primarily by norm violations and inequality aversion, the ethnic composition of groups also influences sharing and sanctioning behavior in Kenya but not Tanzania, consistent with documented differences in the strength of nationalism across the two countries. However, the way in which shared ethnicity affects sanctioning in Kenya—namely, increased punishment of out-group violations against in-group members—is at odds with theories that anticipate that costly sanctioning will primarily target coethnics.
Authors' names appear in alphabetical order to reflect their equal contributions. This research was conducted with generous support from the Russell Sage Small Grants Program in Behavioral Economics, the Global Underdevelopment Action Fund at the Freeman Spogli Institute for International Studies at Stanford University, and the Stanford Center for Philanthropy and Civil Society. Valuable research assistance was provided by Chacha Maroa, Daniel Merengo, Geoffrey Ochieng, and Wango Chaula Wango. The Shirati Health, Education, and Development group and Kenyatta University provided research affiliations for this work. The research also benefited from helpful feedback at the 2013 Midwest Group in African Political Economy meeting. The research received ethical approval from Stanford University, the Kenyan National Council for Science and Technology and the Tanzania Commission for Science and Technology.