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Chapter 3 42Elite capture and Group Identity: Is Monitoring Effective Against Power Abuse? 423.1 regions. Our results point to a significant increase in Enrollment rates and Attendance among recipients. Furthermore, when different groups and regions are compared, we find that recipients in less developed regions benefited more from program participation than groups in less developed regions, indicating that the program was able to close the gap in education between more and less developed areas.Chapter 2 studies the effect of leader's identity on cooperation. Due to the increasing demands of more competitive markets traditional producer cooperative leaders often need to be replaced by managers with specialized skills. While managers can bring technical expertise that leads to Chapter 3 analyses a negative aspect of social identity. Small communities in developing countries (such as tribes, smallholders' association and cooperatives for example), who share language, ethnicity and culture, are often inclined to suffer from an abusive behavior from their local leaders. This abusive behavior often occurs during long periods of time becoming even close to be an accepted political norm. In Chapter 3 we question if the high social identity condition in the community can be the cause of abusive behavior being hence the trigger to a perpetuation mechanism of power abuse in the community. We investigate two channels of how such a perpetuation mechanism can occur: trust and willingness to monitor. We hypothesize that groups who share the same identity with the leader trust him more, and would hence be less willing to pay for a monitoring mechanism. As trust decreases scrutiny, leaders would feel free to increase embezzlement.To do that, we present a laboratory experiment where groups formed by three subjects playing a three-stages game. In stage one subjects solved a group task similar to the group task presented in Chapter 2. In stage two, one subject was randomly assigned as group leader and other two subjects as group members. To allow members' payoff to be dependent on leaders' performance, we implemented the effort task followed by a trust game. The effort task was to sum 5 two digit numbers during 30 seconds. A minimal performance of 1 correct sum by the leader generated a multiplier A which would take a value between 0.8 and 1.9. The non-achievement of the minimal performance would set A=0.8. Members received 20 points as endowment, which they could decide to keep, where it would be multiplied by 1, or to pass it to the leader, where it would be multiplied by A. Leaders received a fixed amount of 20 points plus the amount of points leaders decided to take from each group member. In stage three subjects played a lottery game. We use a 2X2 design combining in-and out-group treatments with monitoring and without monitoring possibility.

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