In this dissertation, I analyze two public good experiments that I designed and conducted in coastal areas of Colombia. The first set of experiments was conducted on two islands in the Caribbean, the second set was done on the Pacific Coast. The participants in these experiments were fishermen and mollusk harvesters—people who, in their daily lives, face the same kind of dilemmas posed in the experiments. I am motivated by the wide variety of institutional arrangements that communities use to manage local natural resource and to confront other similar social dilemmas. Thus, I study four types of institutional arrangements: external regulations, informal sanctions, internal formal sanctions, and the combination of external regulations and informal sanctions.

In the first essay of this dissertation, Comparing the Effectiveness of Regulation and Individual Emotions to Enhance Cooperation: Experimental Evidence from Fishing Communities in Colombia, I present the results from a comparison of external regulations and informal sanctioning systems. More explicitly I compare the effects of random revelation of individual behavior, both in private and to the remaining group members, to external regulatory pressure. I find that the random public revelation of individual choices and the consequences of these choices on the welfare of the rest of the group promotes more cooperation and leads to higher payoffs than regulations that are backed by random financial sanctions, even when these regulations are designed to be fully efficient. My results suggest that in communities where there are mechanisms for triggering pro-social emotions, governments might be better advised to leave the management of the local natural resources to the community.

In the second essay, Internal Punishment Systems and External Regulation: Complementarities in the Field, I first investigate the differences between two internal sanctioning systems in which it is costly to sanction someone in the group. The difference between the sanctioning systems is that one involves monetary punishment, while the other involves non-monetary punishment. Following this, I explore the possible complementarities between the two different internal sanctioning systems and external regulations. I observe that allowing both internal sanctioning systems and external regulations results in higher welfare than with the internal sanctioning systems alone. Thus, I conclude that internal sanctioning and external regulations can be complementary institutions.