One of the wonderful things about economic science is that it is the science of incentives. It analyzes how humans respond to incentives and, despite evidence from other social sciences, how these responses tend to be rational. There is a lot of well documented circumstantial evidence that illustrates this rational behavior. Perhaps the best known collections of references are the books Freakonomics and Super Freakonomics and their associated blog, which present everyday life situations where people act according to incentives and behave rationally.
Not surprisingly, Bolivia is no exception. Bolivians have also proven themselves to be economically rational beings who act according to the incentives they face. A friend of mine, Mario Duran, recently wrote an article about the synthetic grass courts that Bolivia’s President, Evo Morales, is giving throughout the country as part of the “Evo Cumple” program. Interestingly, the article pointed out that even though these courts are given and built by the government, most of them have become private property. Throughout Bolivia, Neighborhood Councils, Sportive Leagues and other kinds of social organization now charge between 100 to 250 Bolivianos per game for the use of the fields.
The question that arises then is: Why, if synthetic grass courts are public goods, since they are funded with either Venezuelan or General Treasury funds, have they become private property whose use is restricted to those who can pay these amounts? The answer is simple and lies in the economically rational response of “entrepreneurs” to an easy incentive that comes from the synthetic grass. The only justifiable reason for paying for the use of these fields would be to fund their regular maintenance; however, unlike other public goods, such as highways and zoos, synthetic grass needs minimal maintenance work.
Synthetic grass courts are made precisely to avoid the high maintenance costs of natural grass courts. For instance, in high altitude cities like La Paz synthetic grass can withstand the heat of the sun, which is so strong that it burns natural grass. It would therefore be logical to think that their use should not cost anything, and surely that is the idea that the government has in giving synthetic grass courts rather than natural grass courts. However, members of neighborhood organizations, in their rational instinct to maximize profits have realized that people have internalized that they have to pay for using sports fields and do not distinguish between synthetic and real grass fields. In the eyes of local entrepreneurs this widespread internalization hands them a fantastically easy and profitable business opportunity. Since synthetic grass has no visible wear, managing these fields is a minimum input and maximum output business.
Normally, public goods display visible signs of wear and tear. Such physical displays of degradation not only allow users to mentally justify paying user fees but also to monitor the use of the money they are paying. If repairs are obviously not being made, users will complain and become increasingly disgruntled over having to pay an entry fee. However, synthetic grass does not permit this efficient means of social control. It is distinct from other public goods in that there is no way that users can verify the use of the financial resources that the general public are providing for the field’s “maintenance.”
This is just one example of rational behavior in response to economic incentives. A lesson that should be learnt is that if the government really wants to provide a “real” public good that promotes soccer playing in Bolivia, it needs to consider peoples tendency to take advantage of economic incentives. In this case, maybe the solution is that the president should stop gifting synthetic grass courts and instead gift natural grass courts or instruct public servants to control for the charges of synthetic grass courts.
Carlos Gustavo Machicado is a senior researcher at the Institute for Advanced Development Studies (INESAD) in La Paz.
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