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Dr. Will HolmesAssistant Professor of Economics Dr. William Holmes traveled to Washington, D.C. in November to discuss his research on government vs. private assistance before the Annual Meetings of the Southern Economics Association.

Holmes presented "Contribute...or let the Government Provide" along with his co-author, High Point University's Daniel T. Hall.

In the paper, the two researchers describe the results of an experiment that evaluated the efficiency of both government and voluntary sources in the provision of needed public goods. While Holmes and Hall conclude that further research is indicated to fully examine the question, their inquiry did result in some interesting findings:

"Many worthy experiments have been conducted to examine voluntary provision as an alternative to government provision of public goods. Successful voluntary provision reduces the need for an increasingly large government role in the economy. Economics students are taught that when voluntary provision fails because of the free-rider problem then government provision is the default backup. Seldom is it mentioned that the potential for government provision may give rise to moral hazard among contributors, thereby reducing the likelihood of voluntary provision. We design a public goods experiment with a provision-point mechanism to investigate these institutional and environmental aspects of voluntary provision.  Treatments incorporate different levels of return on contributions (MPCR), inefficiency in provision by the government, and framing of the decision task. In the government framing treatments, the government provides the public good when voluntary contributions fall short of a threshold. In the trade framing treatments, participants must engage in costly trade with a neighbor if voluntary provision fails. We find no evidence of an average framing effect, indicating that participants respond only to the payoff structure rather than from bias for or against government provision of goods and services. Results from treatments with a high inefficiency level and MPCR show an increasing rate of voluntary contributions over time, indicating that the incidence of successful voluntary provision increases as government inefficiency increases and also as the value of the public good increases. Comparing our results with other experiments in the literature, we find evidence that moral hazard causes government provision to crowd out voluntary contributions when there is a high expectation of a government backstop, however further analyses using experimental treatments and empirical data are warranted."