Strong institutions reduce in-group favoritism

May 5, 2014

Ineffective social and political institutions make people more likely to favour their family and own local social group, while good institutions make them more likely to follow impersonal rules that are fair to everyone, suggests a forthcoming study in the journal Human Nature.

A series of experiments found that people in societies with supportive government services, and institutions that meet their basic needs were very likely to follow impartial rules about how to give out money. By contrast, those without effective, reliable institutions showed favouritism toward members of their .

"If you don't have well-functioning governments then you need these kinds of motivations, because then you're doing what's best for your group and for your local community," says CIFAR (Canadian Institute for Advanced Research) Senior Fellow Joseph Henrich (University of British Columbia), the co-principal investigator on the study.

"You're just trying to survive in a world where there's no a higher-level governmental institutions you can depend on," says Henrich, a member of the Institutions, Organizations & Growth (IOG) program.

The study, done in Bangladesh, Bolivia, Fiji, China, Iceland and the United States, tested motivations using a game. Researchers gave subjects half a day's wages in cash and placed them before two cups.

They told the subjects that the money placed in one cup would go to an unspecified member of their community or group at the end of the game, while the money in the other cup would go to an outsider.

Played fairly, the game would result in both cups having the same amount of money at the end. Researchers made sure individual players knew that no one could see them cheating while the game was being played. But statistical analysis after the game was over detected whether allocation biases or "cheating" had taken place.

The study found that people from countries with effective institutions followed the rules, while people from countries with poor institutions were biased in in favour of community members.

From the government deemed least effective, Bangladesh, to the one deemed most effective, the United States, participants showed a significant decline in favouritism toward their own group. In a Bangladeshi village, the subjects allotted 55.7 per cent of the to their fellow villagers. At a U.S. church, the congregation ended up with 50.1 per cent of the share.

"In a world with well-functioning institutions, this gets inside of people and actually affects their basic motivations, even when they're in a situation when no one is watching," Henrich says.

Henrich says the research ties into the themes of the IOG program, as it demonstrates the complex social and psychological effects of institutions on societies.

Explore further: Economists find in large groups, money facilitates cooperation

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