nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒05‒12
sixteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Do Social Relations Affect Economic Welfare? A Microeconomic Empirical Analysis By Giacomo Degli Antoni
  2. Testing Theories of Reciprocity: Does Motivation Matter? By Luca Stanca, Luigino Bruni, Luca Corazzini
  3. Social capital, rules, and institutions: a cross-country investigation By Thomas Farole; Andrés Rodríguez-Pose; Michael Storper
  4. Trust in International Organizations: An Empirical Investigation Focusing on the United Nations By Benno Torgler
  5. The Power of the Family By Alberto Alesina; Paola Giuliano
  6. Economic Geography and the Evolution of Networks By Johannes Gluckler
  7. CSR and Social Marketing: What is the desired role for Universities in fostering Public Policies? By Leitão, João; Silva, Maria José
  8. Networks, Standards and Intellectual Property Rights By Vitor Trindade; Johannes Moenius
  9. Like Mother Like Son? Experimental Evidence on the Transmission of Values from Parents to Children By Marco Cipriani; Paola Giuliano; Olivier Jeanne
  10. Discrimination and In-Group Favoritism in a Citywide Trust Experiment By Armin Falk; Christian Zehnder
  11. Would You Be Happier If You Were Richer? A Focusing Illusion By Daniel Kahneman; Alan B. Krueger; David Schkade; Norbert Schwarz; Arthur A. Stone
  12. Institutions as Knowledge Capital: Ludwig M. Lachmann’s Interpretative Institutionalism By Foss, Nicolai; Garzarelli, Giampaolo
  13. Corruption and Socioeconomics Determinants:Empirical Evidence of Twenty Nine Countries By Halkos, George; Tzeremes, Nickolaos
  14. SOCIAL CAPITAL and the RWANDAN GENOCIDE A Micro-Level Analysis By Shanley Pinchotti; Philip Verwimp
  15. Effects of social interactions on scientists' productivity By Carillo, Maria Rosaria; Papagni, Erasmo; Capitanio, Fabian
  16. Academic Research, Social Interactions and Economic Growth By Carillo, Maria Rosaria; Papagni, Erasmo

  1. By: Giacomo Degli Antoni (University of Milano-Bicocca)
    Abstract: Over the last few years, many studies have shown that social networks affect the socioeconomic development. This paper presents evidence, through the Italian microdata representative of the entire Italian population, that the quality and quantity of interpersonal relations of agents can increase their economic welfare. Two proxies of interpersonal relations at an individual level are considered: a proxy for the density and one for the quality of network structure of personal contacts. Both seem to have a positive effect on the level of household economic welfare of agents. This result proves robust to the inclusion of a variety of control variables and to the use of different econometric methods.
    Keywords: Networks, Social Interactions, Household Economic Welfare, Microdata, Fuzzy Logic
    JEL: D10 Z13
    Date: 2007–03
  2. By: Luca Stanca, Luigino Bruni, Luca Corazzini (ISLA, Universita' Bocconi, Milano)
    Abstract: One of the key issues for understanding reciprocity is how people evaluate the kindness of an action. In this paper we argue that the motivation driving an action plays an important role for the reciprocating response to that action. We test experimentally the hypothesis that reciprocal behavior is stronger in response to actions driven by intrinsic motivation, as opposed to extrinsic motivation. Our results indicate that reciprocity is significantly stronger when extrinsic motivation can be ruled out, both at the aggregate and the individual level. These findings suggest that models of reciprocal behavior should take into account not only outcomes but also intentions and, in particular, motivations: the type of motivation of an action matters for its perceived kindness and, as a consequence, for reciprocity.
    Keywords: Reciprocity, Intrinsic Motivation, Laboratory Experiments.
    JEL: D63 C78 C91
    Date: 2007–05
  3. By: Thomas Farole (London School of Economics); Andrés Rodríguez-Pose (London School of Economics); Michael Storper (London School of Economics)
    Abstract: Research on the institutional foundations of economic development emphasizes either rulebound systems of exchange or informal bonds between individuals and within small groups. This corresponds to a classical division in social science, between the forces of society and those of community. This cleavage largely ignores their interactions, which are likely to shape the institutions that underpin economic development in decisive ways. This paper operationalises and tests how the interaction of the forces of community (or social capital) and society (or rules) impact three types of institutions: those involved in problem solving, those that shape microeconomic efficiency and those that influence social policy, across fiftyeight countries. We find that both community and society are important determinants across all institutional domains, and are in many cases mutually reinforcing, but that different specific aspects of community and society are most relevant to different institutional domains. Instrumental associationalism, whether formal or informal, and a robust rules environment are the most important determinants of positive institutional outcomes.
    Date: 2007–04–27
  4. By: Benno Torgler (Queensland University of Technology)
    Abstract: The literature on social capital has strongly increased in the last two decades, but there still is a lack of substantial empirical evidence about the determinants of international trust. This empirical study analyses a cross-section of individuals, using micro-data from the World Values Survey, covering 38 countries, to investigate trust in international organizations, specifically in the United Nations. In line with previous studies on international trust we find that political trust matters. We also find that social trust is relevant, but contrary to previous studies the results are less robust. Moreover, the paper goes beyond previous studies investigating also the impact of geographic identification, corruption and globalization. We find that a higher level of (perceived) corruption reduces the trust in the UN in developed countries, but increases trust in developing and transition countries. A stronger identification with the world as a whole also leads to a higher trust in the UN and a stronger capacity to act globally in economic and political environment increases trust in the UN.
    Keywords: International Organizations, United Nations, International Trust, Political Trust, Social Trust, Corruption, Globalization
    JEL: Z13 D73 O19
    Date: 2007–04
  5. By: Alberto Alesina (Harvard University, NBER and CEPR); Paola Giuliano (Harvard University, IMF and IZA)
    Abstract: The structure of family relationships influences economic behavior and attitudes. We define our measure of family ties using individual responses from the World Value Survey regarding the role of the family and the love and respect that children need to have for their parents for over 70 countries. We show that strong family ties imply more reliance on the family as an economic unit which provides goods and services and less on the market and on the government for social insurance. With strong family ties home production is higher, labor force participation of women and youngsters, and geographical mobility, lower. Families are larger (higher fertility and higher family size) with strong family ties, which is consistent with the idea of the family as an important economic unit. We present evidence on cross country regressions. To assess causality we look at the behavior of second generation immigrants in the US and we employ a variable based on the grammatical rule of pronoun drop as an instrument for family ties. Our results overall indicate a significant influence of the strength of family ties on economic outcomes.
    Keywords: family ties, culture, home production and market activities, immigrants
    JEL: Z10 Z13
    Date: 2007–04
  6. By: Johannes Gluckler
    Abstract: An evolutionary perspective on economic geography requires a dynamic understanding of change in networks. This paper explores theories of network evolution for their use in geography and develops the conceptual framework of geographical network trajectories. It specifically assesses how tie selection constitutes the evolutionary process of retention and variation in network structure and how geography affects these mechanisms. Finally, a typology of regional network formations is used to discuss opportunities for innovation in and across regions.
    Keywords: evolution, network trajectory, evolutionary economic geography, social network analysis, innovation
    Date: 2007–04
  7. By: Leitão, João; Silva, Maria José
    Abstract: The paper aims to identify the role of Universities in fostering public policies, through the promotion of social responsibility, and the implementation of social marketing initiatives. This innovative approach is particularly interesting since the literature does not cover, until now, the importance of adopting a social responsibility strategy within Universities, in order to foster public policies for development. First, Corporate Social Responsibility should be developed at Universities. For this purpose, an integrative approach that embraces marketing, economic, ecological, and social aspects is proposed, through the design of a strategic action plan, which includes three operational levels: analysis, implementation and assessment. Second, in order to foster the impact of public policies for development, social marketing initiatives should be implemented among institutional and social networks where Universities assume an increasing strategic role.
    Keywords: Corporate Social Responsibility; Government Policy; Social Marketing.
    JEL: I28 M31 M14
    Date: 2007–04–25
  8. By: Vitor Trindade (Department of Economics, University of Missouri-Columbia); Johannes Moenius
    Abstract: This paper reviews issues that lie at the intersection between intellectual property rights (IPR) and network effects, especially in the context of the global economy. Some of the relevant questions are: (1) How do IPR influence the provision of goods exhibiting network effects? (2) How do network effects in turn influence the creation of intellectual property? And (3) how do aspects of the global economy interact with both IPR and network effects? We synthesize what is known from the existing literature to answer these questions.
    Keywords: Intellectual Property Rights, Network Effects, Globalization, Standards, Social Networks, Software Piracy
    JEL: D85 F12 F13 F14 L14 O34
    Date: 2007–03–27
  9. By: Marco Cipriani (George Washington University); Paola Giuliano (Harvard University, IMF and IZA); Olivier Jeanne (IMF)
    Abstract: This paper studies whether prosocial values are transmitted from parents to their children. We do so through an economic experiment, in which a group of Hispanic and African American families play a standard public goods game. The experimental data presents us with a surprising result. We find no significant correlation between the degree of cooperation of a child and that of his or her parents. Such lack of cooperation is robust across age groups, sex, family size and different estimation strategies. This contrasts with the typical assumption made by the theoretical economic literature on the inter-generational transmission of values. The absence of correlation between parents' and children's behavior, however, is consistent with part of the psychological literature, which emphasizes the importance of peer effects in the socialization process.
    Keywords: culture, intergenerational transmission, public good games
    JEL: C92 H41 Z1
    Date: 2007–04
  10. By: Armin Falk (IZA, University Bonn and CEPR); Christian Zehnder (University of Zurich and IZA)
    Abstract: This paper provides field experimental evidence on the prevalence and determinants of discrimination and in-group favoritism in trust decisions. We observe choices of about 1,000 inhabitants of the city of Zurich who take part in a sequential trust game, in which first movers can condition their investments on the residential districts of second movers. Our main results can be summarized as follows: First movers discriminate significantly in their investment choices, i.e., strangers receive different investments depending on the district they live in. The systematics of the discrimination pattern is underlined by data from an additional newspaper study, where participants correctly guessed the outcome of the study. In terms of district characteristics two factors seem to be key for a district's reputation: while expected trustworthiness of a district increases in the socio-economic status it decreases in the degree of ethnic heterogeneity. Observed discrimination is not just based on mistaken stereotypes but can at least partly be classified as statistical discrimination. This can be inferred from the fact that, on a district level, both expected return on investment and actual investments are positively correlated with actual back transfers. First movers correctly anticipate different levels of trustworthiness and discriminate accordingly. Furthermore, we provide evidence of in-group favoritism, i.e., people trust strangers from their own district significantly more than strangers from other districts. Finally, we discuss individual determinants of discrimination and in-group favoritism.
    Keywords: discrimination, in-group favoritism, trust, trustworthiness, reciprocity, social capital, city development
    JEL: C90 D63
    Date: 2007–04
  11. By: Daniel Kahneman (Princeton University); Alan B. Krueger (Princeton University and NBER); David Schkade (University of California, San Diego); Norbert Schwarz (University of Michigan); Arthur A. Stone (Stony Brook University)
    Abstract: Most people believe that they would be happier if they were richer, but survey evidence on subjective well-being is largely inconsistent with that belief. Subjective well-being is most commonly measured by questions that ask people, “All things considered, how satisfied are you with your life as a whole these days?” or “Taken all together, would you say that you are very happy, pretty happy, or not too happy?” Such questions elicit a global evaluation of one’s life. An alternative method asks people to report their feelings in real time, which yields a measure of experienced happiness. Surveys in many countries conducted over decades indicate that, on average, reported global judgments of life satisfaction or happiness have not changed much over the last four decades, in spite of large increases in real income per capita. While reported life satisfaction and household income are positively correlated in a cross-section of people at a given time, increases in income have been found to have mainly a transitory effect on individuals’ reported life satisfaction. (1-3) Moreover, the correlation between income and subjective well-being is weaker when a measure of experienced happiness is used instead of a global measure. This article reviews recent evidence that helps interpret these observations.
    Date: 2006–05
  12. By: Foss, Nicolai; Garzarelli, Giampaolo
    Abstract: The paper revisits the socioeconomic theory of the Austrian School economist Ludwig M. Lachmann. By showing that the common claim that Lachmann’s idiosyncratic (read: eclectic and multidisciplinary) approach to economics entails nihilism is unfounded, it reaches the following conclusions. (1) Lachmann held a sophisticated institutional position to economics that anticipated developments in contemporary new institutional economics. (2) Lachmann’s sociological and economic reading of institutions offers insights for the problem of coordination. (3) Lachmann extends contemporary new institutional theory without simultaneously denying the policy approach of comparative institutional analysis.
    Keywords: Comparative institutional analysis; coordination; expectations; institutional evolution; interpretative institutionalism
    JEL: D80 B52 B53 B31
    Date: 2006
  13. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper measures the effect of different socioeconomic determinants on countries’ transparency efficiency. Specifically, using Data Envelopment Analysis (DEA), the transparency efficiency of twenty nine countries is calculated. Then with the help of factor analysis we extract two factors from seven socioeconomic variables according to their communality of influence. Finally we set up a logistic regression using the efficiencies derived from DEA and the factors extracted from factor analysis. The results suggest that higher transparency efficiency appears in countries with cultural values of lower power distance, masculinity, uncertainty avoidance and lower individualism. Additionally, lower inflation rates and lower political and economical risks constitute to higher levels of countries’ transparency efficiency while positive GDP growth doesn’t ensure countries’ transparency efficiency.
    Keywords: Perceived transparency; business ethics; cultural dimensions; factor analysis; logistic regression; DEA
    JEL: Z10 C14 C10 M20
    Date: 2007–01–03
  14. By: Shanley Pinchotti (KU Leuven); Philip Verwimp (Université Libre de Bruxelles)
    Abstract: This paper applies the theory of social capital to the unfolding of genocide in a Rwandan community located 50 km south of the capital. Using the concepts defined by Putnam, Coleman and Woolcock, we find that the activities of political parties, civil war in the north of the country and the use of coercion and violence inside the community weakened existing ties between members of the two ethnic groups, Hutu and Tutsi. Within these groups however, social ties were strengthened to a degree where collective action against the minority group became a feasible option. In this process, we analyse the role of a small group of key players in the community and link their role with their political and economic status. The genocide is thus situated and interpreted in the social fabric of a Rwandan community. The paper is the result of intensive field work in Rwanda.
    Date: 2007–03
  15. By: Carillo, Maria Rosaria; Papagni, Erasmo; Capitanio, Fabian
    Abstract: Recent economic research has focused on the economic effects of the social environment. In the economic literature, important phenomena are considered, at least in part, as results of the individual's social environment. There is a similar revival of interest among economists who analyse the world of science and basic research. In this case as well, the environment plays a key role in the agent's behaviour. This paper aims to analyse theoretically and empirically the influence of social interactions on scientists' productivity. In this respect, we build a model of a contest in science that provides us with a framework for empirical analysis. The equilibrium solution of the model tells us that a scientist's productivity depends on the social environment in terms of the community size and quality of colleagues. In the econometric analysis we investigate the aggregate importance of this phenomenon through the analysis of data on publications in four scientific fields of seven advanced countries. We find that social interactions among researchers have positive effects on a scientist's productivity and that there is a U-shaped relation between the size of a scientific network and individual productivity. We interpret this result as providing evidence for threshold externalities and increasing returns to scale.
    JEL: Z13
    Date: 2007–04–24
  16. By: Carillo, Maria Rosaria; Papagni, Erasmo
    Abstract: In this paper we investigate the aggregate implications of social interactions for basic research and economic growth. In particular, we focus on the effects of both the size of the scientific community and the strenght of social exchange among researchers on science productivity and uneven growth. Basic research is modelled as a contest which awards a real prize to the winner and nothing to the losers. Agents are endowed with heterogeneous talent and discoveries are uncertain events which depend on the talent and effort of individuals and on their aggregate values. A CES index of the distribution of both talent and effort summarizes the features of the interactions of the scientific community from which increasing returns may derive. According to the model in equilibrium scientists endowed with higher ability put higher effort into their job, which justifies the famous Lotka effect on the skewed distribution of scientific publications. Social interactions among scientists cause increasing returns to the number of scientists and multiple equilibria, among which a poverty trap with zero knowledge production and zero growth may emerge. Since only the most talented agents join the science sector, economic growth depends positively on its size. Sensitivity analysis of the model shows that if the scientific community is made by on average less complementary people and its size is greater than a threshold then in equilibrium this community will be larger and the growth rate greater. The same effects derive both from a stronger influence of the scientific environment on the aggregate probability of success in scientific races and from a higher share of real resources devoted to basic research.
    JEL: Z13 J24 O41
    Date: 2007–05–04

This nep-soc issue is ©2007 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.