Study uncovers wealth bias in group decision-making on public projects

A new study published in the Journal of Public Economics reveals how wealth shapes public decision-making, particularly when funding collective social projects or charity initiatives.

The study, by Dr Tommaso Reggiani of Cardiff Business School and co-authors, uncovers a ‘wealthy-interest bias,’ showing that even without political manipulation, wealthier individuals often have a disproportionate influence over which projects move forward, regardless of the group’s collective preferences.

The research highlights that wealthy members effectively set the agenda by pledging large contributions to preferred projects, often leading other group members to align with these choices to ensure project success. This dynamic is particularly significant in public goods initiatives, like community projects or charitable campaigns, where consensus is essential.

The study also found that wealthier individuals are likely to contribute more financially, which partially eases the burden on less wealthy members. This voluntary cost-sharing can help balance the influence gap, but it doesn’t fully address the underlying bias in decision-making which leaves the preferences of lower-income group members in the background.

In lab experiments, groups consistently gravitated towards projects matching wealthy members’ preferences, showing that while financial support from the wealthy can mitigate inequality, their decision-making power remains unchecked.

Implications for policy and public goods

This research offers insights to ensure fairer decision-making for policymakers, charitable organisations, and crowdfunding platforms.

Policymakers could consider ways to ensure that the interests of lower-income individuals are adequately represented in collective decisions, especially when it comes to selecting which public goods to fund.

Charitable organisations could consider ways to democratise their decision-making processes, ensuring that the voices of lower-income donors are heard alongside those of wealthier benefactors.

Crowdfunding platforms could consider mechanisms that level the playing field, ensuring that projects are selected based on broader community interest rather than the financial power of a few.

Read the full paper: Coordinated selection of collective action: Wealthy-interest bias and inequality

Co-authors: Corazzini L. , Cotton C., Longo E., Reggiani T.