Solidarity through punishment: An experiment on the merits of centralized enforcement in generalized exchange

Solidarity and punishment are both central to maintaining social order, but their interaction remains poorly understood. A number of studies report that punishment undermines solidarity in domains of generalized exchange, whereas other studies find that punishment furthers norm-compliant behavior and thereby promotes solidarity in the realm of public goods. Using a laboratory experiment, this study is the first to directly compare the effect of centralized punishment on solidarity between generalized exchange and public good settings. The results reveal that it is generalized exchange where centralized punishment induces solidarity, whereas in the public good setting the effect of punishment is negligible. The paper concludes that the structure of generalized exchange alone is insufficient to induce solidarity. In addition, generalized exchange systems require external stabilization, as provided by centralized punishment.