nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒03‒24
sixteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. The development of trust and social capital in rural Uganda: An experimental approach. By Paul Mosley; Arjan Verschoor
  2. Social Connections and Group Banking By Karlan, Dean S.
  3. Group versus Individual Liability: A Field Experiment in the Philippines By Giné, Xavier; Karlan, Dean S.
  4. Give Trust a Chance--A Model of Trust in the Context of an IMF-Supported Program By Daouda Sembene
  5. Intergenerational Education Transmission: Neighborhood Quality and/or Parents’ Involvement? By Eleonora Patacchini; Yves Zenou
  6. The Racial Test Score Gap and Parental Involvement in Britain By Eleonora Patacchini; Yves Zenou
  7. Horizontal R&D Cooperation and Spillovers: Evidence from France By Bruno Versaevel; Désiré Vencatachellum
  8. Network Effects in R&D Partnership Evidence from the European Collaborations in Micro and Nanotechnologies By Corinne Autant-Bernard; Pascal Billand; Christophe Bravard; Nadine Massard
  9. Class Origin, Family Culture, and Intergenerational Correlation of Education in Rural China By Hiroshi Sato; Li Shi
  10. CSR and Trade: Informing Consumers about Social and Environmental: Part I By Barbara Fliess; Hyung-Jong Lee; Olivia L. Dubreuil; Osvaldo Agatiello
  11. Assigning Intentions when Actions are Unobservable: the Impact of Trembling in the Trust Game By James C. Cox; Cary A. Deck
  12. Obesity, Unhappiness, and The Challenge of Affluence : Theory and Evidence By Oswald, Andrew J; Powdthavee, Nattavudh
  13. Marriage and Divorce: Changes and their Driving Forces By Betsey Stevenson; Justin Wolfers
  14. Budget support, conditionality and poverty. By Paul Mosley; Abrar Suleiman
  16. Des objets aux interactions, et retour By Lorenza Mondada; Madeleine Akrich; Antoine Hennion; Vololona Rabeharisoa

  1. By: Paul Mosley; Arjan Verschoor (Department of Economics, The University of Sheffield)
    Abstract: Trust is important for development but can be hard to build. In this paper, we report on experiments designed to understand the determinants of trust in villages in eastern Uganda, and in particular whether trust can be `built´ by offering insurance to people as a protection against the possibility that the trust they offer will not be reciprocated. We find, firstly, that the effects of income and wealth on trust are ambiguous: trust is higher in the richer than the poorer village, but once association and female education are added as explanatory variables, the wealth effect disappears. Secondly, although the offer of insurance is taken up by a majority of players, this is in most cases not an `effective demand´ in the sense of incentivising higher levels of trust. Effective demand for insurance, defined in this way, however responds positively to high levels of risk efficacy, microfinance membership and female education. Insurance offered in this form, therefore, is on its own apparently not a reliable technology for building trust; but its effectiveness as a trust-building instrument appears to increase if certain complementary institutions are in position.
    Keywords: Trust, Social Capital, Insurance, Uganda
    JEL: O12 O16 C93
    Date: 2005–06
  2. By: Karlan, Dean S.
    Abstract: Lending to the poor is expensive due to high screening, monitoring, and enforcement costs. Group lending advocates believe lenders overcome this by harnessing social connections. Using data from FINCA-Peru, I exploit a quasi random group formation process to find evidence of peers successfully monitoring and enforcing joint-liability loans. Individuals with stronger social connections to their fellow group members (i.e., either living closer or being of a similar culture) have higher repayment and higher savings. Furthermore, I observe direct evidence that relationships deteriorate after default, and that through successful monitoring, individuals know who to punish and who not to punish after default.
    Keywords: group lending; informal savings; microfinance; social capital
    JEL: O12 O16 O17 Z13
    Date: 2007–03
  3. By: Giné, Xavier; Karlan, Dean S.
    Abstract: Group liability is often portrayed as the key innovation that led to the explosion of the microcredit movement, which started with the Grameen Bank in the 1970s and continues on today with hundreds of institutions around the world. Group lending claims to improve repayment rates and lower transaction costs when lending to the poor by providing incentives for peers to screen, monitor and enforce each other’s loans. However, some argue that group liability creates excessive pressure and discourages good clients from borrowing, jeopardizing both growth and sustainability. Therefore, it remains unclear whether group liability improves the lender’s overall profitability and the poor’s access to financial markets. We worked with a bank in the Philippines to conduct a field experiment to examine these issues. We randomly assigned half of the 169 pre-existing group liability 'centres' of approximately twenty women to individual-liability centres (treatment) and kept the other half as-is with group liability (control). We find that the conversion to individual liability does not affect the repayment rate, and leads to higher growth in centre size by attracting new clients.
    Keywords: group liability; informal economies; joint liability; micro-enterprises; microfinance; social capital
    JEL: C93 D71 D82 D91 O12 O16 O17
    Date: 2007–03
  4. By: Daouda Sembene
    Abstract: This paper is an attempt to identify the determinants of trust between country authorities and IMF staff in the context of an IMF-supported program. Using an outcomes-based definition of trust, a game-theoretic model is developed to compute the level of trust between the two parties. The results and the analysis of trust-related issues emerging in a program context suggest that trust between country authorities and IMF staff exerts a positive impact on the likelihood of program success through its ability to improve the quality of the design, the efficiency of negotiation, and the effectiveness of implementation of an IMF-supported program. Some initiatives to secure such benefits and enhance trust in staff are proposed.
    Keywords: Trust , IMF-Supported Program , program design and implementation , negotiation , Fund-supported adjustment programs ,
    Date: 2007–02–26
  5. By: Eleonora Patacchini (University of Rome "La Sapienza"); Yves Zenou (Research Institute of Industrial Economics, GAINS, CEPR and IZA)
    Abstract: We develop a model that analyzes the impact of residential neighborhood and parents’ involvement in education on children’s educational attainment and test it using the UK National Child Development Study. We find that the better the quality of the neighborhood, the higher the parents’ involvement in children’s education, indicating cultural complementarity. For high-educated parents, the child’s educational attainment is more affected by the parents’ involvement than by the neighborhood quality while, for low-educated parents, the neighborhood quality seems to play the major role.
    Keywords: education, cultural transmission, cultural substitution, peer effects
    JEL: I21 J13 J24
    Date: 2007–02
  6. By: Eleonora Patacchini (University of Rome "La Sapienza"); Yves Zenou (Research Institute of Industrial Economics, GAINS, CEPR and IZA)
    Abstract: We investigate the racial gap in test scores between black and white students in Britain both in levels and differences across the school years. We find that there is an increasing racial gap in test scores between ages 7 and 11, and a decreasing one between ages 11 and 16. Using the richness of information of the National Child Development Study, we find that the evolution of the racial test score gap reflects the racial parenting gap. The latter can, in turn, be explained by the fact that, during this period, the social structure of black families has gone through important changes while it has remained roughly the same for white families.
    Keywords: ethnic minorities, education, cultural differences, family structure
    JEL: I21 J15 J24
    Date: 2007–02
  7. By: Bruno Versaevel (EM Lyon, GATE CNRS); Désiré Vencatachellum (HEC Montréal)
    Abstract: We use the French portion of the 2002 Community Innovation Survey to test how spillovers a®ect the likelihood that ¯rms cooperate in R&D. Unlike most existing empirical studies, our results clearly support well-established theoretical predictions of the industrial organization literature. We find that a firm which benefits from higher spillovers from her rivals is more likely to cooperate horizontally in R&D. Moreover, the impact of incoming spillovers on the likelihood of horizontal R&D cooperation is positive and statistically significant only when they are above a threshold. Both the value, and the precision of the estimates, increase with the information flow which firms report receiving from their competitors.
    Keywords: cooperation, research and development, spillovers
    JEL: C72 L13 L81
    Date: 2006–10
  8. By: Corinne Autant-Bernard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne]); Pascal Billand (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne]); Christophe Bravard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne]); Nadine Massard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne])
    Abstract: Based on the research projects submitted to the 6th Framework Program of the European Union, this paper studies cooperative networks in micro and nanotechnologies. Our objective is twofold. First, using the statistical tools of the social network analysis, we characterise the structure of the R&D collaborations established between firms. Second, we investigate the determinants of this structure, by analysing the individual choices of cooperation. A binary choice model is used to put forward the existence of network effects alongside other microeconomic determinants of cooperation. Our findings suggest that network effects are present, so that probability of collaboration is influenced by each individual's position within the network. It seems that social distance matters more than geographical distance. We also provide some evidence that similar firms (in terms of research potential) are more likely to collaborate together
    Keywords: Network formation; R&D collaboration; Knowledge externalities; nanotechnologies
    Date: 2007–03–19
  9. By: Hiroshi Sato (Hitotsubashi University, Tokyo); Li Shi (Beijing Normal University)
    Abstract: This paper examines the determinants of intergenerational correlation of education in rural China by using a data from a large survey of households. Three generations who completed education during the period from pre-1949 to the beginning of the 2000s are included. The focus is on the influence of family class status (chengfen) on offspring education. Our investigation suggests that family class status is still important for the intergenerational transmission of education. The offspring of landlord/rich peasant families are more likely to achieve higher educational attainment, even though parental education, family wealth, and other family characteristics are the same. The unique determinant of the intergenerational transmission of education in the postreform era is found to be an education-oriented family culture, created as an intergenerational cultural rebound against class-based social discrimination during the Maoist era. We have also found that the cultural reaction is a combination of class-specific effects with cohort-specific effects.
    Keywords: education, intergenerational correlation, social class, social discrimination, family culture
    JEL: D31 J24 N35 O15
    Date: 2007–02
  10. By: Barbara Fliess; Hyung-Jong Lee; Olivia L. Dubreuil; Osvaldo Agatiello
    Abstract: Focusing on consumer demands in OECD markets and voluntary initiatives taken in the private sector, this study investigates how consumers are informed about the social and environmental conditions under which products have been produced. Consumers of OECD increasingly attach importance to how companies they buy from conduct their business, and the voluntary adoption of CSR policies is spreading in the private sector. But how do consumers know...
    Keywords: OECD, retail trade, multinationals, value chain
    Date: 2007–01–10
  11. By: James C. Cox; Cary A. Deck
    Abstract: This paper reports laboratory experiments investigating behavior when players may make inferences about the intentions behind others’ prior actions based on higher- or lower-accuracy information about those actions. We investigate a trust game with first mover trembling, a game in which nature determines whether the first mover’s decision is implemented or reversed. The results indicate that second movers give first movers the benefit of the doubt. However, first movers do not anticipate this response. Ultimately, it appears that subjects are thinking on at least three levels when making decisions: they are concerned with their own material well being, the trustworthiness of their counterpart, and how their own actions will be perceived.
    JEL: C70 C91 D64 D84
    Date: 2006
  12. By: Oswald, Andrew J (Department of Economics, University of Warwick); Powdthavee, Nattavudh (Institute of Education, University of London)
    Abstract: Is affluence a good thing? The book The Challenge of Affluence by Avner Offer (2006) argues that economic prosperity weakens self-control and undermines human well-being. Consistent with a pessimistic view, we show that psychological distress has been rising through time in modern Great Britain. Taking over-eating as an example, our data reveal that half the British population view themselves as overweight, and that happiness and mental health are worse among fatter people in both Britain and Germany. A 10-point move up in body mass index (BMI) is associated in the cross-section with a drop in psychological health of approximately 0.3 GHQ points. Comparisons also matter. For a given level of BMI, we find that people who are educated or who have high income are more likely to view themselves as overweight. We discuss problems of inference and argue that longitudinal data on BMI are needed. We suggest a theory of imitation -- where utility depends on relative weight -- in which there can be obesity spirals after only small drops in the price of food.
    Keywords: Body mass index ; happiness ; mental health ; General Health Questionnaire ; GHQ scores ; BMI ; well-being ; obesity ; BHPS ; GSOEP ; imitation ; weight ; relative income ;comparisons
    JEL: D1 I12 I31
    Date: 2007
  13. By: Betsey Stevenson (Wharton School, University of Pennsylvania); Justin Wolfers (Wharton School, University of Pennsylvania, CEPR, NBER and IZA)
    Abstract: We document key facts about marriage and divorce, comparing trends through the past 150 years and outcomes across demographic groups and countries. While divorce rates have risen over the past 150 years, they have been falling for the past quarter century. Marriage rates have also been falling, but more strikingly, the importance of marriage at different points in the life cycle has changed, reflecting rising age at first marriage, rising divorce followed by high remarriage rates, and a combination of increased longevity with a declining age gap between husbands and wives. Cohabitation has also become increasingly important, emerging as a widely used step on the path to marriage. Out-of-wedlock fertility has also risen, consistent with declining "shotgun marriages". Compared with other countries, marriage maintains a central role in American life. We present evidence on some of the driving forces causing these changes in the marriage market: the rise of the birth control pill and women’s control over their own fertility; sharp changes in wage structure, including a rise in inequality and partial closing of the gender wage gap; dramatic changes in home production technologies; and the emergence of the internet as a new matching technology. We note that recent changes in family forms demand a reassessment of theories of the family and argue that consumption complementarities may be an increasingly important component of marriage. Finally, we discuss how these facts should inform family policy debates.
    Keywords: marriage, divorce, fertility, cohabitation, remarriage, economics of the family, demography
    JEL: D1 H31 I3 J1 K36 N3
    Date: 2007–02
  14. By: Paul Mosley; Abrar Suleiman (Department of Economics, The University of Sheffield)
    Abstract: This paper examines the effectiveness of budget support aid as an anti-poverty instrument. We argue that a major determinant of this effectiveness is the element of trust – or `social capital´, as it may be seen – which builds up between representatives of the donor and recipient. Thus we model the conditionality processes attending budget support aid, not purely in the conventional way as a non-cooperative two-person game, but rather as a non-cooperative game which may mutate into a collaborative equilibrium if sufficient trust between the negotiating parties builds up. Whether or not this happens is, we argue, fundamental to the effectiveness of conditionality, and of budget support aid. This then requires us to enquire into the determinants of trust, which - we empirically demonstrate - derive from the experience of the negotiating parties with one another, from the incentives they are able to provide to trust one another and from the processes within which their negotiations are conducted. The model is tested against two samples: extensively against a broad sample of all African countries undergoing budget support operations and intensively against a narrow sample of Ethiopia, Uganda, Malawi and Zambia. The statistical analysis suggests that trust has in practice been achieved not only through a positive `social history´ but by the transmission of forward-looking `signals´ or `bona fides´ concerning fundamentals: high pro-poor expenditure, low military expenditure, and low corruption show a positive relationship with growing trust (measured in terms of freedom from programme interruptions). Where these signals are present, budget support aid is in general growing, and slippage on overt conditionality is in general forgiven; but there are exceptions to this trend, as our case-study analysis demonstrates . A proactive stance in defence of a pro-poor strategy is positive for trust, as are certain procedural reforms including the presence of an IMF resident mission and frequent face-to-face meetings between negotiators for donor and recipient. High trust generates stability of aid, and stability of aid, in conjunction with its level and its targeting, significantly influences growth and poverty outcomes.
    Date: 2005–06
  15. By: P Tridico
    Abstract: Il ruolo delle istituzioni economiche e del loro cambiamento, nell’analisi economica è stato a lungo sottovalutato o ignorato dagli economisti “main stream”. In questo saggio, dopo aver illustrato le necessarie definizioni che concernono l’economia istituzionalista e il loro ruolo nell’economia, presenteremo una rassegna della letteratura istituzionalista, concentrandoci in particolare sul confronto tra la vecchia (Veblen, Commons, Mithchell, ecc) e la nuova economia istituzionalista (Coase, Williamson, North, ecc). L’elemento essenziale che distingue i due approcci è l’individualismo metodologico, a cui la nuova economia istituzionalista rimane legata al contrario della vecchia che lo rifiuta. Questa differenza è fondamentale al fine di ammettere, o meno, la possibilità di processi di massimizzazione da parte degli agenti economici. In seguito affronteremo il delicato problema del cambiamento istituzionale. Infine, presenteremo tre modelli istituzionalisti (Olson et al., 1998; Rodrik, 1999; Jones e Hall, 1998) che, a nostro avviso, evidenziano bene lo stretto legame che esiste tra sviluppo economico da una parte, e governance, istituzioni e gestione del cambiamento istituzionale dall’altra.
    Keywords: Il ruolo delle istituzioni economiche e del loro cambiamento, nell’analisi economica è stato a
  16. By: Lorenza Mondada (ICAR, Université Lumière Lyon 2); Madeleine Akrich (Centre de Sociologie de l'Innovation, Ecole des Mines de Paris); Antoine Hennion (Centre de Sociologie de l'Innovation, Ecole des Mines de Paris); Vololona Rabeharisoa (Centre de Sociologie de l'Innovation, Ecole des Mines de Paris)
    Abstract: Transcribes a dialogue on the evolution of actor-network theory.
    Keywords: Actor-network theory, attachment, objects, interactions, bodies, methodology
    JEL: B50 Z10 Z11 Z13 Z19
    Date: 2007–03

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