A new study, led by the University of Nottingham and conducted by a team of 72 economists and psychologists across the world, has identified a potential 'private solution trap' in problems requiring international co-operation such as climate change.
Dr Eugene Malthouse, Research Fellow in the university's School of Economics, led the international team of researchers, who invited participants from 34 countries to play a climate change game in small groups.
Participants were given either a high or low budget that they could contribute towards a 'public solution' that benefited all group members or towards a 'private solution' that benefited only themselves. This choice was designed to represent the dilemma faced by governments between investing in reducing greenhouse gas emissions (a public solution) and investing in local adaptation measures like flood protections (a private solution).
The findings, which have been published in the Proceedings of the National Academy of Sciences (PNAS), revealed that participants given higher budgets (representing wealthier nations) consistently contributed more to private solutions than those given lower budgets across all 34 countries, while they also contributed proportionally less to public solutions. Inequality within groups therefore dramatically increased over the course of the game.
Our results highlight the potential consequences of the private solution trap whereby the existence and widespread adoption of private solutions undermine the provision of public solutions, while also increasing wealth inequality and leaving less-wealthy individuals and nations unprotected against collective risks."
The study, which was jointly funded by the University of Warwick's Global Research Priorities, the European Research Council, the Spanish Ministry of Science and Innovation, and local universities in every country, also found that differences in cultural values helped to explain contributions towards private and public solutions across countries. For example, participants in countries like Italy and Germany, in which living in harmony with the natural world is encouraged, were more likely to invest in public solutions and less likely to invest in private solutions.
At the same time, the authors identified certain patterns of behaviour that enabled groups to achieve public solutions across cultures. Groups in which people initially contributed more to public solutions were more likely to be successful, and so were groups in which people reciprocated the contributions of their fellow group members.
While the primary focus of the study was climate change, the findings apply to any collective problem in which private and public solutions are available – from education, to healthcare, to security.
Private solutions are a great form of insurance for those who can afford them. But their mere existence destabilises public goods (think about people hiring private fire trucks for their burning homes in LA). This makes those goods more expensive for everyone and completely out of reach for the poor. We can see similar problems with public transportation, which in many places is completely under-developed, and many other issues."
"The data shows clearly this is a problem that exists above culture. Some countries do better than others, but they all fall prey to the private solution trap. Perhaps the key optimistic point is that we can do better, by investing in public solutions more often and more quickly. Then private solutions lose their appeal."
