This paper presents an experimental test of the proposition that government contributions to
public goods, funded by lump-sum taxation, will completely crowd out voluntary
contributions. It is found that crowding-out is incomplete and that subjects who are taxed are
significantly more cooperative. This is true even though the tax does not affect the Nash
equilibrium prediction. This result is taken as evidence for alternative models that assume
people experience some private benefit from contributing to public goods.

Andreoni (1993) has shown in an experimental study that crowding out is incomplete when
an involuntary lump-sum tax is levied exogenously on individuals to finance the provision of
a public good. In this paper, we (i) replicate Andreoni's experimental conditions, and (ii)
introduce treatments where subjects vote on a tax, which is (iii) either below or above the
Nash equilibrium. We find almost complete crowding out with exogenous taxation. Voting
behavior with respect to the tax in the endogenous treatment has high predictive power for …