nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2006‒04‒22
twenty papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Social Capital and Economic Development By Fabio Sabatini
  2. "Returns to Social Capital: Estimates Based on the Augmented Augmented-Solow Model" By Hirokazu Ishise; Yasuyuki Sawada
  3. Active Decisions and Pro-social Behavior: A Field Experiment on Blood Donation By Alois Stutzer; Lorenz Goette; Michael Zehnder
  4. Democratic capital: The nexus of political and economic change By Torsten Persson; Guido Tabellini
  5. Strong Ties in a Small World By Marco van der Leij; Sanjeev Goyal
  6. Social Ties and Coordination on Negative Reciprocity: The Role of Affect By Ernesto Reuben; Frans van Winden
  7. A Demand System with Social Interactions: Evidence from CEX By Giacomo Pasini
  8. Gift Exchange and the Separation of Ownership and Control By Sandra Maximiano; Randolph Sloof; Joep Sonnemans
  9. A Social Network Analysis of Occupational Segregation By Sebastian Buhai; Marco van der Leij
  10. Wages and Employment in a Random Social Network with Arbitrary Degree Distribution By Yannis M. Ioannides; Adriaan R. Soetevent
  11. The Importance of Emotions for the Effectiveness of Social Punishment By Astrid Hopfensitz; Ernesto Reuben
  12. Optimal Income Taxation and Social Norms in the Labor Market By Aronsson, Thomas; Sjögren, Tomas
  13. Promoting Helping Behavior with Framing in Dictator games. By Pablo Brañas-Garza
  14. Does Social Capital Improve Labour Productivity in Small and Medium Enterprises? By Fabio Sabatini
  15. Religions, secularity and democracy in Europe: for a new Kelsenian pact By Alessandro Ferrari
  16. Network Design in Games with Spillovers By Sergio Currarini
  17. EU Legitimacy and Social Affiliation: A study of Engineers in Europe By Jan Gunnarsson
  18. Fairness in the Family: Implications for Parent-Adult Child Interactions By John F. Ermisch
  19. Changing Social Institutions to Improve the Status of Women in Developing Countries By Johannes P. Jütting; Christian Morrisson
  20. Le micro-crédit, un contrat social ? By Michel Lelart

  1. By: Fabio Sabatini
    Abstract: This paper carries out an empirical assessment of the causal nexus connecting social capital's diverse aspects to the "quality" of economic development in Italy. The analysis accounts for three main social capital dimensions (i.e. bonding, bridging and linking social capital) and measures them through synthetic indicators built by means of principal component analyses performed on a dataset including multiple variables. The quality of development is measured through human development and indicators of the state of health of urban ecosystems, public services, social protection, gender equality, and labour markets. The causal relationship between social capital's and development's different dimensions is then assessed through structural equations models. The analysis in this paper provides a relevant proof of Putnam's claims on the positive role of civil society organizations in development processes.
    Keywords: Social capital, Social networks, Civil Society, Economic development, Social quality, Labour precariousness, Structural Equations Modelling
    JEL: C39 O15 O18 R11 Z13
    Date: 2006–04
  2. By: Hirokazu Ishise (Department of Economics, Boston University); Yasuyuki Sawada (Faculty of Economics, University of Tokyo)
    Abstract: This paper estimates the aggregate output elasticity of social capital that characterizes the aggregate returns to social capital. With this aim, we apply Nonneman and Vanhoudt's (1996) augmented version of the augmented Solow model of Mankiw et al. (1992) by including social capital as an additional production input. The estimated output elasticity of social capital is approximately 0.1. While our results largely indicate that social capital positively affects economic growth, the magnitude of the effects is smaller than that of physical and human capital as well as labor inputs. Moreover, the median value of the implied aggregate return of social capital is approximately 9.77% at the global level and, in OECD countries, it is likely to be considerably smaller than the individual returns, suggesting the fallacy of composition. As a by product, the depreciation rate of social capital is estimated to be approximately 10% per annum which is significantly higher than that of physical capital.
    Date: 2006–04
  3. By: Alois Stutzer (University of Zurich and IZA Bonn); Lorenz Goette (University of Zurich, CEPR and IZA Bonn); Michael Zehnder (University of Zurich)
    Abstract: In this paper, we propose a decision framework where people are individually asked to either actively consent or dissent to some pro-social behavior. We hypothesize that confronting individuals with the choice of engaging in a specific pro-social behavior contributes to the formation of issue-specific altruistic preferences while simultaneously involving a commitment. The hypothesis is tested in a large-scale field experiment on blood donation. We find that this "active-decision" intervention substantially increases the stated willingness to donate blood, as well as the actual donation behavior of people who have not fully formed preferences beforehand.
    Keywords: active decision, pro-social behavior, field experiment, blood donation
    JEL: C93 D64 I18
    Date: 2006–04
  4. By: Torsten Persson; Guido Tabellini
    Abstract: We study the joint dynamics of economic and political change. Predictions of the simple model that we formulate in the paper get considerable support in a panel of data on political regimes and GDP per capita for about 150 countries over 150 years. Democratic capital — measured by a nation’s historical experience with democracy and by the incidence of democracy in its neighborhood — reduces the exit rate from democracy and raises the exit rate from autocracy. In democracies, a higher stock of democratic capital stimulates growth in an indirect way by decreasing the probability of a sucessful coup. Our results suggest a virtuous circle, where the accumulation of physical and democratic capital reinforce each other, promoting economic development jointly with the consolidation of democracy.
  5. By: Marco van der Leij (Erasmus Universiteit Rotterdam); Sanjeev Goyal (Erasmus Universiteit Rotterdam, and University of Essex)
    Abstract: In this paper we test the celebrated `Strength of weak ties' theory of Granovetter (1973). We test two hypotheses on the network structure in a data set of collaborating economists. While we find support for the hypothesis of transitivity of strong ties, we reject the hypothesis that weak ties reduce distance more than strong ties do. We relate this surprising result to two different views of society. Whereas the classical view has been that society consists of different communities with strong ties within communities and weak ties between, the community of economic researchers has an interlinked star structure with strong ties between the stars. In such a world, strong ties are more important than weak ties.
    Keywords: network structure; social network; social capital; economic sociology; coauthorship; research; collaboration
    JEL: A14 Z13
    Date: 2006–06–10
  6. By: Ernesto Reuben (Department of Economics, University of Copenhagen); Frans van Winden (University of Amsterdam)
    Abstract: This is an experimental study of a three-player power-to-take game where a proposer is matched with two responders. We compare a treatment in which subjects are anonymous to each other (strangers) with one in which responders know each other from outside the lab (friends). We focus on the responders’ decisions, beliefs, and emotions. We find that friends punish the proposer more than strangers, and that they are more likely to coordinate their punishment (without communication). Both punishment and coordination are explained by the responders’ emotional reactions. Furthermore, the responders’ expectations are better predictors of emotions and destruction than their fairness perceptions.
    JEL: Z13 D74 C92 D63
  7. By: Giacomo Pasini (Department of Economics, University Of Venice Cà Foscari; Economics and Organization, School for Advanced Studies in Venice)
    Abstract: A Quadratic Almost Ideal Demand System that allows for social interactions is described and then estimated on CEX data. Social interactions are introduced as mean budget shares and depend on peer membership and visibility. Peer identification is obtained by means of a similarity index which measures the probability of group membership. Reflection problem is tackled directly and therefore estimation is carried on with a Generalized Spatial 2SLS that deal with two types of endogeneity: the first due to contemporaneous choices of households, the second due to contemporaneous choice of goods. The results support the hypothesis that total expenditure allocation to budget shares depends both on social interaction and visibility.
    Keywords: Social Interactions, Demand System, Similarity, Endogeneity, Spatial Econometrics
    JEL: H31 C31 C49
    Date: 2006
  8. By: Sandra Maximiano (Faculty of Economics and Econometrics, Universiteit van Amsterdam); Randolph Sloof (Faculty of Economics and Econometrics, Universiteit van Amsterdam); Joep Sonnemans (Faculty of Economics and Econometrics, Universiteit van Amsterdam)
    Abstract: Numerous gift exchange experiments have found a positive relationship between employers' wage offers and workers' effort levels. In (almost) all these experiments the employer both owns and controls the firm. Yet in reality many firms are characterized by the separation of ownership and control. In this paper we explore to what extent this affects the wage-effort relationship observed. We compare the standard bilateral gift exchange game between an owner-manager and a worker with two trilateral ones where the firm is owned by a shareholder and controlled by a manager. The wage-effort relationship we observe is the same in all three situations. Most strikingly, workers still reward higher wages with higher effort levels, even when the manager responsible for choosing the wage does not share in the firm's profits at all. The results of a fourth treatment in which the wage is exogenously given suggest that workers feel reciprocal towards the firm as a whole; both ownership and control are important for the gift exchange relationship.
    Keywords: Gift exchange; multi-level hierarchy; reciprocity; experimental economics
    JEL: J41 C91 M52
    Date: 2006–04–06
  9. By: Sebastian Buhai (Erasmus Universiteit Rotterdam, and Aarhus School of Business); Marco van der Leij (Erasmus Universiteit Rotterdam)
    Abstract: This paper proposes a simple social network model of occupational segregation, generated by the existence of inbreeding bias among individuals of the same social group. If network referrals are important in getting a job, then expected inbreeding bias in the social structure results in different career choices for individuals from different social groups, which further translates into stable occupational segregation equilibria within the labour market. Our framework can be regarded as complementary to existing discrimination or rational bias theories used to explain persistent observed occupational disparities between various social groups.
    Keywords: Social Networks; Occupational Segregation; Labour Market
    JEL: A14 J31 J70 Z13
    Date: 2006–02–01
  10. By: Yannis M. Ioannides (Tufts University, Medford, MA); Adriaan R. Soetevent (Faculty of Economics and Econometrics, University of Amsterdam)
    Abstract: Empirical studies of labor markets show that social contacts are an important source of job-related information [Ioannides and Loury (2004)]. At the same time, wage differences among workers may be explained only in part by differences in individual background characteristics. Such findings motivate our model in which differences in "social connectedness" among otherwise identical workers result in wage inequality and differences in unemployment rates. The paper is related to theoretical contributions by Calvo- Armengol and Jackson (2004) and Calvo-Armengol and Zenou (2005) and builds on the Pissarides (2000) model. Workers may hear about job openings directly from employers or through their social contacts. We go further by introducing heterogeneity in the number of contacts each worker has with others, i.e. in the workers' degree. We utilize results from the technical literature on random graphs with arbitrary degree distributions [Newman, (2003a)] to account for a consequence of workers' receiving information about job openings from their social contacts: they compete with their social contacts' other contacts. For social networks with arbitrary degree distributions we show that people who are better connected receive a higher wage on average and face a lower unemployment rate. Numerical computations for the specific case in which connections follow a Poisson distribution show that variability in connections can result in substantial variation in the above labor market outcomes.
    Keywords: job search; social networks; arbitrary degree distribution; wage inequality; incidence of unemployment
    JEL: D83 J31 J64
    Date: 2006–01–26
  11. By: Astrid Hopfensitz (University of Geneva); Ernesto Reuben (Department of Economics, University of Copenhagen)
    Abstract: This paper experimentally explores how the enforcement of cooperative behavior in a social dilemma is facilitated through institutional as well as emotional mechanisms. Recent studies emphasize the importance of anger and its role in motivating individuals to punish free riders. However, we find that anger also triggers retaliatory behavior by the punished individuals. This makes the enforcement of a cooperative norm more costly. We show that in addition to anger, ‘social’ emotions like guilt need to be present for punishment to be an effective deterrent of uncooperative actions. They play a key role by subduing the desire of punished individuals to retaliate and by motivating them to behave more cooperatively in the future.
    JEL: Z13 C92 D74 H41
    Date: 2005–07
  12. By: Aronsson, Thomas (Department of Economics, Umeå University); Sjögren, Tomas (Department of Economics, Umeå University)
    Abstract: This paper concerns optimal income taxation in a two-type model extended to allow for social interaction and social norms in the labor market. One type of norm relates to the hours of work among the employed, and we assume that there is a cost associated with deviating from 'normal behavior' (defined in terms of the average hours of work). Another type of norm refers to the pressure of earning one's living by working, where social interaction means that the perceived cost of being out of employment depends on the share of nonworkers in the population. The results show how, and why, the existence of social norms may modify results derived in earlier literature. Under reasonable assumptions, the norm referring to normal behavior in term of work hours provides an incentive for the government to increase the hours of work supplied by the high-ability type relative to the hours of work supplied by the low-ability type, whereas the norm of 'earning one's living by working' strengthens the employment-motive behind tax policy.
    Keywords: Optimal Taxation; Social Interaction; Norms
    JEL: D60 H21 H53
    Date: 2006–03–13
  13. By: Pablo Brañas-Garza (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: A number of recent papers on double-blind dictator games have obtained significant generous behavior when information regarding the recipient or any other social context is provided. In contrast, the lack of information discourages other-regarding behavior and the subject’s behavior closely approximates the game-theoretic prediction based on the selfishness assumption. This paper uses framing to explore the role of helping—behavior in dictator games. The whole experiment includes both classroom and regular experiments for the baseline and the framing treatment. To promote these motivations we included a “non—neutral” sentence at the end of the instructions, which reads “Note that he relies on you”. Our baseline and framed DG are statistically different from each other, indicating that the additional sentence promotes generous-regarding behavior.
    Keywords: dictator game, framing effects, helping behavior, altruism.
    JEL: D63 D64 C91
    Date: 2006–04–08
  14. By: Fabio Sabatini
    Abstract: This paper carries out an empirical assessment of the relationship between social capital and labour productivity in small and medium enterprises in Italy. By means of structural equations models, the analysis investigates the effect of different aspects of the multifaceted concept of social capital. The bonding social capital of strong family ties and the bridging social capital shaped by informal ties connecting friends and acquaintances are proved to exert a negative effect on labour productivity, the economic performance, and human development. On the contrary, the linking social capital of voluntary organizations positively influences such outcomes.
    Keywords: Labour productivity, Small and medium enterprises, Social capital, Social networks, Structural equations models
    JEL: J24 R11 O15 O18 Z13
    Date: 2006–02
  15. By: Alessandro Ferrari
    Abstract: Abstract: In Europe the public role of the religions appears to be directly proportional to the fall in trust in the procedural mechanisms at the basis of the liberal democracies. Compared to the strong identities attributed to the United States and to the Islamic world Europe is accused of having a weak identity, the fruit of its prescriptive relativism. In this context God returns onto the scene. Nevertheless, a European civil religion risks becoming an instrument of closure of the system rather than responding to the challenges of pluralist societies and it could become a further factor of secularisation of society.
    Keywords: christian democracy; civil society; deliberative democracy; democracy; democratization; democratization; diversity/homogeneity; European identity; European public space; governance; ideas; identity; interest intermediation; interest representation; lobbying; minorities; Nation-state; participation; pluralism; public opinion; social democracy; EU Charter of Fundamental Rights; subsidiarity; Amsterdam Treaty; Constitution for Europe; France; Germany; Italy; history; political science; sociology
    Date: 2005–06–27
  16. By: Sergio Currarini (Department of Economics, University Of Venice Cà Foscari)
    Abstract: How should an organization be designed in order to provide its members with minimal incentives to defect? And how does the optimal design depend on the type of strategic interaction between defectors and remaining organizational members? This paper addresses such issues in a game theoretic model of cooperation, in which an organization is formally represented by a connected network, and where gains from cooperation are given by a partition function. We show that critical structural features of the organization depend in a clear-cut way on the sign of spillovers. In particular, positive spillovers favor the adoption of dispersed and centralized forms, while negative spillovers favor cohesive and horizontal ones. Moreover, if the organizational form determines all the communication possibilities of members, a highly centralized organization - the star - emerges under positive spillovers, whereas two horizontal architectures - the circle and the complete - emerge under negative spillovers.
    Keywords: Organizational design, networks, group stability, spillovers.
    JEL: C7 C71 D20
    Date: 2006
  17. By: Jan Gunnarsson (Department of Economics, University of Copenhagen)
    Abstract: Analyses of European governance usually bring the member states into the fore placing the citizens in the background. By means of economic analysis, this paper brings explanations of EU legitimacy down to the level of individuals. A method will be suggested that combines explanations based on individual interests and a sociological approach to identity. The paper investigates how work organizations become levers for a European outlook that may release legitimizing from its national context. The individual level analysis will be carried out for one particular occupational group (engineers) and the research questions are elucidated by a small number of interviews with Danish engineers concerning their experience of policies and actions with technological knowledge.
    Keywords: legitimacy; social capital; transaction costs; social identity; multi-level governance
    JEL: H70 L50
  18. By: John F. Ermisch (Institute for Social and Economic Research)
    Abstract: This paper advances the hypothesis that transfers of contact/in-kind help and money between parents and an adult child reflect concerns for fairness and reciprocity, and may be interpreted as a ‘gift exchange’. It is inspired by recent evidence from experiments that suggests that even strangers behave in accordance with concerns for fairness and reciprocity. The implications of this hypothesis for the relationship between parents’ resources and frequency of contact/in-kind are contrasted with those of efficient exchange and family constitution models of intergenerational transfers. Empirical evidence from the British Household Panel Study provides stronger support for the gift exchange model than the efficient exchange or binding constitution models.
    Keywords: aging, family, intergenerational links
    Date: 2006–04
  19. By: Johannes P. Jütting; Christian Morrisson
    Abstract: . Deeply rooted social institutions – societal norms, codes of conduct, laws and tradition – cause gender discrimination. . Religion per se does not systematically define such discrimination. All dominant religions show flexibility in interpreting the role of women in society. . The Millennium Development Goals demand change in gender-discriminating social institutions, which should be added to the seven strategic priorities identi?ed by the UN Task Force on Education and Gender Equality. . Donors must redesign their strategies to focus not only on improving women’s capacities and capabilities, but also and concurrently on lowering men’s resistance against reforms that improve gender equality.
    Date: 2005–07–22
  20. By: Michel Lelart (LEO - Laboratoire d'économie d'Orleans - - [CNRS : UMR6221] - [Université d'Orléans] - [])
    Abstract: Le micro-crédit est salué comme un moyen de réduire la pauvreté dans le monde que la communauté internationale viendrait de découvrir. La réalité est un peu différente.
    Keywords: Micro-crédit ; micro-finance
    Date: 2006–04–04

This nep-soc issue is ©2006 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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