nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2005‒11‒12
fifteen papers chosen by
Fabio Sabatini
Universitá degli Studi di Roma, La Sapienza

  1. On the economic value of repeated interactions under adverse selection By Ottorino Chillemi; Benedetto Gui; Lorenzo Rocco
  2. Social Capital in Central and Eastern Europe. A Critical Assessment and Literature Review By Dimitrina Mihaylova
  3. Economic Returns to Social Capital in the Urban Informal Sector in Developing Countries: Micro Evidence from Small Textile Producers in Bolivia By Kurt Annen
  4. Determinants of Total Factor Productivity in the Italian Regions By Guido Ascari; Valeria Di Cosmo
  5. The Socioeconomics of Consumption: Solutions to the Problems of Interest, Knowledge, and Identity By Metin Cosgel
  6. Consumption growth and spatial poverty traps: an analysis of the effect of social services and community infrastructures on living standards in rural Peru By Philippe De Vreyer; Javier Herrera
  7. Capabilities, the self, and well-being: a research in psycho-economics By Maurizio Pugno
  8. Social Conflict and Gradual Political Succession: An Illustrative Model By William Jack; Roger Lagunoff
  9. Oppositional Identities and the Labor Market By Battu, Harminder; Mwale, McDonald; Zenou, Yves
  10. Interconnected networks By Bijl,P.W.J. de; Brunekreeft,G.; Damme,E.E.C. van
  11. Network effects and regulatory competition By Vermeulen,E.P.M.
  12. Bridging Structure and Agency: Processes of Institutional Change By Dolfsma, W.; Verburg, R.
  13. Individual preferences and the distribution of wealth. By Luc Arrondel; André Masson
  14. Strategic interactions in the labor market, self-esteem motivations and socio-demographic disparities. By Olivier Baguelin
  15. Role of Alternative Dispute Resolution Methods in Development of Society: `Lok Adalat ’ in India By Agarwal Anurag K

  1. By: Ottorino Chillemi (University of Padua); Benedetto Gui (University of Padua); Lorenzo Rocco (University of Padua)
    Abstract: The paper studies, in a repeated interaction setting, how the presence of cooperative agents in a heterogeneous community organized in groups, affects group efficiency and stability. The paper extends the literature by assuming that each type can profitably mimic other types. It is shown that such enlargement of profitable options prevents group stabilization in the single group case. Stabilization can be obtained with many groups, but its driver is not the efficiency gain due to the presence of cooperative individuals. Instead stabilization is the result of free riding opportunities.
    JEL: D64 D71 D82
    Date: 2005–10
  2. By: Dimitrina Mihaylova (Center for Policy Studies, Central European University)
    Abstract: Ever since the 1990s, social capital has attracted attention from social science researchers. With its focus on the importance of intangible resources such as trust, social capital appeared to supplement existing theories of social and economic change. For its early proponents such as Bourdieu, Coleman and more famously, Putnam, social capital could be understood as a critical component in social reproduction, educational achievement and administrative efficiency. Social capital seems especially relevant in Central and Eastern Europe and the countries of the former Soviet Union. Not only does it direct attention to informal networks as ways of getting things done, it also explores how strong ties of personal trust co-exist with low levels of general trust and how this can affect economic and political reform. In terms of its actual policy implications, the conclusions of social capital research have not always been clear and it may be fair to say that expectations have been scaled down since the World Bank declared that social capital to be the missing link. This study offers a critical review of over seventy studies that have applied social capital to developments in Central and Eastern Europe and the former Soviet Union. The author draws from a variety of social science disciplines as well as including several reports from international organisations. The review investigates five principal fields in which social capital has been used to date and to provides a series of suggestions as to how such research can help encourage institutional and policy innovation.
    JEL: O P
    Date: 2005–11–02
  3. By: Kurt Annen (University of Guelph, Department of Economics)
    Abstract: The paper uses micro-level data obtained from surveying informal and formal small textile producers in Bolivia to estimate the economic returns to social capital. Social capital is defined as being linked to other individuals. The paper studies forms of social links that vary with respect to their inclusiveness and their ability to enforce cooperation. The paper shows, first, that social capital has an economic return for informal firms but not for formal ones. Informal firms operate without the shadow of courts in an environment that is characterized by a lack of anonymous trust which makes self-enforcing social links valuable. Second, more inclusive social capital generates a higher return as long as the self-enforcement constraint is met. The evidence supports the hypothesis that the “strength of weak ties”- argument advanced by scholars such as Granovetter, Putnam, and Fukuyama has to be complemented by the game-theoretic condition requiring exchange among linked players to be (self)-enforceable.
    Keywords: Social Capital, Anonymous Trust, Informal Sector, Small Firms.
    JEL: O12 L14 O17
    Date: 2005–11–08
  4. By: Guido Ascari (University of Pavia); Valeria Di Cosmo (University of Pavia)
    Abstract: This paper investigates the determinants of TFP for Italian regions. We find strong evidence in favour of the factors commonly suggested by the theoretical literature. In particular, R&D expenditures and the number of researchers are positively related to regional TFP. Moreover, human capital is an important determinant of TFP. Finally, we find a strong difference between Northern and Southern regions, particularly regarding the effect of research activity and social capital. Our results are robust across different estimation methods.
    Keywords: Total factor productivity, Italian regions, panel data, human capital, social capital
    JEL: O47 C23 R11
    Date: 2005–11–08
  5. By: Metin Cosgel (University of Connecticut)
    Abstract: This paper is a review of the socio-economic literature on consumption. Considering consumption as a social activity, it examines how consumption solves the problems of interest, knowledge, and identity. It also discusses the main themes and important contributions in each category and offers suggestions for further research.
    Keywords: consumption, socio-economics, interest, knowledge, identity
    JEL: A12 A13 A14 D1 D8
    Date: 2005–10
  6. By: Philippe De Vreyer (DIAL, Paris); Javier Herrera (DIAL, Paris)
    Abstract: We test the effect of local geographic endowment of capital on household growth in living standards in rural Peru, using a four years unbalanced panel data set. Our theoretical model of household consumption growth allows for the effect of community variables to modify the returns to augmented capital in the household production function. Three different sources of data are used: the ENAHO 1997-2000 household surveys, the population census of 1993 and the district infrastructure census of 1997. Altogether the addition of these different data sources makes an unusually rich data set, at least when considered with developing country standards. As in Jalan and Ravallion (2002), we use a quasi-differencing method to identify the impact of locally determined geographic and socioeconomic variables, while removing unobserved household and community level fixed effects. GMM are then used to estimate the model parameters. Several significant interesting results appear, confirming that private consumption growth depends on local geographic variables.
    JEL: C33 H23 I18 I32 I38
    Date: 2005–10–21
  7. By: Maurizio Pugno
    Abstract: Sen’s capability approach to the assessment of individual well-being and welfare policies, and to the search for theoretical foundations of a paradigm of human development, is challenged by a puzzling fact. In rich countries where material wealth and liberties are at high levels, a significant fraction of the population exhibit malaise in the form of depression, anxiety, addiction, conflicts within the family and among adolescent peers. This evidence suggests that consideration should be made of an additional functioning which is neglected by the capability approach: that of the mind in humans, i.e. the self. This addition is crucial because the self also evaluates well-being, and regulates the capability of choosing. Contributions from psychology, neuroscience, and psychiatry point out that the self is a construct built up by accumulating beliefs based on new and recalled information as a largely non-conscious process. This activity is self-serving, and may inflate or deflate the self-image, thus impairing the functioning of the self in its relation with the world. This problem seems to begin when primary close relationships thwart the feeling of the non-conscious self during infancy, although material care may be guaranteed. Policy implications for the educational and mental health system are briefly drawn.
    Keywords: capability approach,well-being,self,relatedness,unconscious,attachment,intrinsic motivations
    JEL: A12 D81 I31
    Date: 2005
  8. By: William Jack; Roger Lagunoff
    Date: 2005–11–04
  9. By: Battu, Harminder (Department o Economics); Mwale, McDonald (Health Economics Research Unit (HERU)); Zenou, Yves (The Research Institute of Industrial Economics)
    Abstract: We develop a model in which non-white individuals are defined with respect to their social environment (family, friends, neighbors) and their attachments to their culture of origin (religion, language), and in which jobs are mainly found through social networks. We find that, depending on how strong peer pressures are, non-whites choose to adopt "oppositional" identities since some individuals may identify with the dominant culture and others may reject that culture, even if it implies adverse labor market outcomes.
    Keywords: Ethnic Minorities; Identity; Social Networks; White's Norm; Multiple Equilibria
    JEL: A14 J15
    Date: 2005–10–19
  10. By: Bijl,P.W.J. de; Brunekreeft,G.; Damme,E.E.C. van (TILEC (Tilburg Law and Economics Center))
    Date: 2005
  11. By: Vermeulen,E.P.M. (TILEC (Tilburg Law and Economics Center))
    Date: 2005
  12. By: Dolfsma, W.; Verburg, R. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The tension between (social) order and change, or, alternatively formulated, between structure and agency, has a long history in the social sciences (e.g. Verburg 1991). The discussion has substantial philosophical overtones. In this article we recount the history of the discussion. We both acknowledge the more recent admonition that the agent may have been given short shrift in previous eras (Davis 2003), but at the same time argue that one should not negate the reality of social structure or institutions (Hodgson 1999, 2004). In this article we argue, however, that these recent contributions, from the fields of economics, sociology, political science and management, do not provide a much needed account of how the tension between structure and agency may be resolved conceptually. Accounts seem to emphasize either structure or agency, and fail to capture their interrelationships. We submit that that the process of institutionalization does resolve the tension conceptually, focusing on the role of the agent in reproducing institutional setting, but also in instigating institutional change. We provide a theoretical account of the conditions under which institutions change, and the likely direction of such change. In doing so we emphasize the relation between socio-cultural values subscribed to in a society or community and institutional settings and practices (Dolfsma 2004). As institutions should be conceptualized to have both structural as well as ?cultural? aspects (Neale 1987), in many but not all cases irrevocably related, agents can re-interpret or re-define a given institutional structure in the light of a differing perspective, giving rise to tensions felt and possilbly setting in motion a process of institutional change.
    Keywords: Structure;Agency;Institutions;Institutional change;Process;Tensions;
    Date: 2005–11–01
  13. By: Luc Arrondel; André Masson
    Abstract: For a sub-sample of French households of an Insee wealth survey, we obtain new and relative measures of 5 individual preference parameters : the risk "attitude" (aversion, prudence...), the rate of time depreciation over the life-cycle, the degree of short-term impatience, and the degrees of family and non family altruism. Short-term impatience and non family altruism are found no to affect wealth but, contrarily to recent results of behavioural analysis, the three other parameters have significant effects on wealth (financial, gross or net), which are consistent with theoretical predictions : wealth accumulation increases with the degree of prudence (precautionary saving), falls with time preference (life-cycle saving) and rises with the degree of family altruism (wealth intended for bequests). The way preferences are measured allows to get rid of potential causality problems and the joint explanatory power of the three parameters appears sizeable, although less important than the one of classic explanatory variables (age, income, social class and inheritance).
    Date: 2005
  14. By: Olivier Baguelin (EUREQua)
    Abstract: In a previous work, we have developed a model in which agents choose whether to achieve self-esteem through work. When they do, they develop an intrinsic motivation to effort. The analysis was restricted to an employment relation (employers were monopsons). In the present study, we analyze the consequences of this model on labor outcomes. The model can give an account of many important traits of socio-demographic disparities in the labor market (notably of vertical occupational segregation). We consider how the structure of the labor market conditions this account.
    Keywords: Self-esteem motivations, intrinsic motivation, selective hiring, occupational segregation, socio-demographic earnings gaps, oligopsony.
    JEL: J42 J43
    Date: 2005–09
  15. By: Agarwal Anurag K
    Abstract: Peace is the sine qua non for development. Disputes and conflicts dissipate valuable time, effort and money of the society. It is of utmost importance that there should not be any conflict in the society. But, in a realistic sense, this is not possible. So, the next best solution is that any conflict which raises its head is nipped in the bud. With the judicial system in most of the countries being burdened with cases, any new case takes a long time to be decided. And, till the time the final decision comes, there is a state of uncertainty, which makes any activity almost impossible. Commerce, business, development work, administration, etc., all suffer because of long time taken in resolving disputes through litigation. To get out of this maze of litigation, courts and lawyers’ chambers; most of the countries encourage alternative methods of dispute resolution. India has a long tradition and history of such methods being practiced in the society at grass roots level. These are called panchayat and in the legal terminology, these are called arbitration. These are widely used in India for resolution of disputes – both commercial and non-commercial. Other alternative methods being used are Lok Adalat (People’s Court), where justice is dispensed summarily without too much emphasis on legal technicalities. Methods like negotiation, mediation and conciliation are being increasingly used to resolve disputes instead of going for litigation. There have been recent amendments in the procedural law of India to incorporate these methods so that people get justice in a speedy manner and there is lesser conflict in the society. This paper examines the role of methods of alternative dispute resolution, particularly Lok Adalat in making inexpensive, efficacious and speedy justice accessible to the public. The Constitution of India guarantees ‘Right to Constitutional Remedies’ as a fundamental right. The government provides free legal aid to the needy. However, in a country of continental dimensions and with population more than a billion, it becomes very difficult to provide free legal aid to everyone. The National Legal Services Authority (NALSA) is trying to spread ‘legal literacy’ which is a step more than ‘literacy’. People care about their rights much more when they are aware and are ‘legal literate’. Efforts are also being done at provincial level. The paper particularly examines the role of NALSA and other State Legal Services Authority which are the key institutions in bridging the gap between public and judicial system. The author has personal experiences regarding the same. All these efforts seem to be a small drop in the ocean, but small drops make mighty oceans. How can these be replicated in other parts of India and similar models developed and adopted in Asia-Pacific countries is a good research area. Such models shall curb conflicts and bring more peace in society – not only in domestic sense but also internationally.
    Keywords: Arbitration, Conciliation, Dispute resolution, Legal Aid, Lok Adalat (People’s Court)
    Date: 2005–11–03

This nep-soc issue is ©2005 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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