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The nal publication is available at Springer via http://dx.doi.org/10.1007/s10683-014-9405-0Additional information: Use policyThe full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. AbstractWe investigate the endogenous formation of sanctioning institutions supposed to improve efficiency in the voluntary provision of public goods. Our paper parallels Markussen et al.(forthcoming) in that our experimental subjects vote over formal vs. informal sanctions, but it goes beyond that paper by endogenizing the formal sanction scheme. We find that self-determined formal sanctions schemes are popular and efficient when they carry no upfront cost, but as in Markussen et al., informal sanctions are more popular and efficient than formal sanctions when adopting the latter entails such a cost. Practice improves the performance of sanction schemes: they become more targeted and deterrent with learning.

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Both experimental and empirical studies have shown that democratically imposing a policy that encourages cooperation may increase its effectiveness by enhancing the voters' cooperation behavior. But, do those involved in the democratic decision-making process change their behavior when faced with an exogenously implemented rule? This paper experimentally shows that the voters that are involved in a successful democratic selection of a policy behave more pro-socially as consistent with recent studies. My experiment moreover shows that such a successful democratic imposition of the policy may increase the voters' level of cooperation even when the policy is undemocratically imposed.