nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒08‒27
thirteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Social Attitudes and Economic Development: An Epidemiological Approach By Algan, Yann; Cahuc, Pierre
  2. Social Capital and Basic Goods: The Cautionary Tale of Drinking Water in India By Sripad Motiram; Lars Osberg
  3. The Transition to Democracy : Collective Action and Intra-elite Confict By Ghosal, Sayantan; Proto, Eugenio
  4. The social consequences of economic growth: The relationship between real household income and self-declared tolerance By BECCHETTI LEONARDO; CASTRIOTA STEFANO; ROSSETTI FIAMMETTA
  5. The Value of Life Near its End and Terminal Care By Gary Becker; Kevin Murphy; Tomas Philipson
  6. Publicness and Taken-for-granted Knowledge: A Case Study of Communal Land Formation in Rural Thailand By Shigetomi, Shin'ichi
  7. Social Identity and Preferences over Redistribution By Klor, Esteban F; Shayo, Moses
  8. The Strength of Weak Cooperation:an Attempt to Understand the Meaning of Web 2.0 By CARDON, Dominique; AGUITON, Christophe
  9. Procedural Concerns By Sebald, Alexander
  10. Two Views on Institutional Development: The Grand Transition vs the Primacy of Institutions By Martin Paldam; Erich Gundlach
  11. What determines Financial Development? Culture, Institutions, or Trade By Nils Herger; Roland Hodler; Michael Lobsinger
  12. Cooperation among strangers: an experiment with indefinite interaction By Gabriele Camera; Marco Casari
  13. The Spatial Distribution of Innovation Networks By Wilhelmsson, Mats

  1. By: Algan, Yann; Cahuc, Pierre
    Abstract: In this paper we develop a new empirical approach to uncovering the impact of social attitudes on economic development. We first show that trust of second-generation Americans is significantly influenced by the country of origin of their forebears. In the spirit of the epidemiology literature, we interpret this phenomenon as the consequence of inherited social attitudes. We show that trust inherited by second-generation Americans from their country of origins has changed over time. This result allows us to use the inherited trust of second-generation Americans as a time-varying instrument to track back the evolution of trust in the home country of their parents. This strategy enables us to identify the specific impact of inherited trust on economic development relative to other traditional candidates, such as institutions and geography, by controlling for country fixed effects. We find that inherited trust has explained a substantial share of economic development on a sample of 30 countries during the post-war period, by improving total factor productivity and the accumulation of human and physical capital.
    Keywords: economic development; growth; social capital; trust
    JEL: F10 N13 O10 P10
    Date: 2007–07
  2. By: Sripad Motiram; Lars Osberg (Department of Economics, Dalhousie University)
    Keywords: India; water
    Date: 2007–01–19
  3. By: Ghosal, Sayantan (Department of Economics, University of Warwick); Proto, Eugenio (Department of Economics, University of Warwick)
    Abstract: This paper studies how intra-elite confict results in transition to democracy, characterized as both franchise extension to, and lowering the individual cost of collective political action for, an initially disorganized non-elite. Two risk averse elites compete for the appropriation of a unit of social surplus with initial uncertainty about their future relative bargaining power. Both elements of a democracy are necessary to ensure that the two elites credibly commit to a mutually fairer share of the surplus and we derive sufficient conditions for democracy to emerge in equilibrium. Our formal analysis accounts for stylized facts that emerge from an analysis of Indian and West European democracies.
    Date: 2007
    Abstract: A widespread opinion, supported by many theoretical contributions of philosophers and economists, states that economic prosperity has positive consequences on material wellbeing which are traded off by negative “moral” consequences and social externalities. An opposite school of thought challenges this view by emphasizing that economic growth has also beneficial moral consequences in terms of higher tolerance, affection towards democracy, generosity and social consensus for competition. This paper focuses on the presumed positive effect of economic growth on tolerance, so far unexplored in the literature from an empirical point of view. Using panel data from the German Socioeconomic Panel on around 33,000 individuals over the period 1992-2004 we find a robust positive relationship between real personal household income and self-declared tolerance, both in levels and first differences. Our results suggest that growth may have positive moral consequences assumed that it translates from aggregate into individual level.
    Date: 2007–07
  5. By: Gary Becker; Kevin Murphy; Tomas Philipson
    Abstract: Medical care at the end of life, which is often is estimated to contribute up to a quarter of US health care spending, often encounters skepticism from payers and policy makers who question its high cost and often minimal health benefits. It seems generally agreed upon that medical resources are being wasted on excessive care for end-of-life treatments that often only prolong minimally an already frail life. However, though many observers have claimed that such spending is often irrational and wasteful, little explicit and systematic analysis exists on the incentives that determine end of life health care spending. There exists no positive theory that attempts to explain the high degree of end-of life spending and why differences across individuals, populations, or time occur in such spending. This paper attempts to provide the first rational and systematic analysis of the incentives behind end of life care. The main argument we make is that existing estimates of the value of a life year do not apply to the valuation of life at the end of life. We stress the low opportunity cost of medical spending near ones death, the importance of keeping hope alive in a terminal care setting, the larger social value of a life than estimated in private demand settings, as well as the insignificance in quality of life in lowering its value. We derive how an ex-ante perspective in terms of insurance and R&D alters some of these conclusions.
    JEL: I1 I11 I18 I32 I39 J0
    Date: 2007–08
  6. By: Shigetomi, Shin'ichi
    Abstract: The lack of public-mindedness can cause problems in the social order of people’s daily lives, such as the tragedy of the commons and the problem of free riders. Some scholars such as Habermas assert that communicative rationality is the solution, expecting that individuals will communicate with each other to reach a consensus without being bounded by aspects of social background. Other scholars advocate the revitalization of traditional community culture. These arguments, however, are not based on reality. By using the case of communal land formation in rural Thailand, the author shows that collective action is neither a revival of tradition nor a result of communication free from social constraints. Rather, cooperation emerges because the people rationally respond to their present needs and have built, through daily social interactions, taken-for-granted knowledge about how they should behave for cooperation.
    Keywords: Local organization, Rural development, Thailand, Public sphere, Community forest, Communal land, Community, Forest
    JEL: O18 Q15 Q23 Z13
    Date: 2007–06
  7. By: Klor, Esteban F; Shayo, Moses
    Abstract: We design an experiment to study the effects of social identity on preferences over redistribution. The experiment highlights the trade-off between social identity concerns and maximization of monetary payoffs. Subjects belonging to two distinct natural groups are randomly assigned gross incomes and vote over alternative redistributive tax regimes, where the regime is chosen by majority rule. We find that a significant subset of the subjects systematically deviate from monetary payoff maximization towards the tax rate that benefits their group when the monetary cost of doing so is not significantly high. These deviations cannot be explained by efficiency concerns, inequality aversion, reciprocity, social learning or conformity. Finally, we show that behaviour in the lab helps explain the relationship between reported income and stated preferences over redistribution observed in surveys.
    Keywords: Experimental Economics; Income Redistribution; Social Identity; Social Preferences
    JEL: C92 D63 D72
    Date: 2007–07
  8. By: CARDON, Dominique; AGUITON, Christophe
    Abstract: This paper examines some continuities and ruptures in the use of Web 2.0 such as blogs, social media, user-generated content services etc. vis-à-vis earlier web services. We hypothesize that one of the sociological characteristics of Web 2.0 services is that making personal production public creates a new articulation between individualism and solidarity, which reveals the strength of weak cooperation. Web 2.0 services allow individual contributors to experience cooperation ex post. The strength of the weak cooperation arises from the fact that it is not necessary for individuals to have an ex ante cooperative action plan or altruistic intention. They discover cooperative opportunities only by making public their individual production. The paper illustrates this phenomenon by analysing the uses of different services and by looking at the new process of innovation that appears through Barcamp and Coworking spaces.
    Keywords: Web 2.0; weak cooperation; BarCamp
    JEL: D62 D43 L96 K29
    Date: 2007–03
  9. By: Sebald, Alexander
    Abstract: Different to other scientific disciplines traditional economic theory has remained remarkably silent about procedural aspects of strategic interactions. Much to the contrast, among psychologists there is by now a broad consensus that not only expected outcomes shape human behavior, but also procedures that are used to take decisions. It is argued that procedural concerns are especially pervasive in the resolution of conflicts. In our paper we show that procedural concerns are in fact an inherent feature of the interaction of reciprocal agents. More precisely, using Dufwenberg and Kirchsteiger (2004)’s theory of sequential reciprocity we demonstrate that procedural choices determine the responsibility that people have for outcomes. The responsibility for outcomes in turn influences peoples’ evaluations of intentions and, hence, subsequent reactions. Two applications are discussed to highlight the impact and importance of procedural concerns in strategic interactions.
    Keywords: Psychological Games; Procedural Concerns; Reciprocity
    JEL: C70 D01
    Date: 2007–06–04
  10. By: Martin Paldam; Erich Gundlach
    Abstract: The Grand Transition (GT) view claims that economic development is causal to institutional development, and that many institutional changes can be understood as transitions occurring at roughly the same level (zones) of development. The Primacy of Institutions (PoI) view claims that economic development is a consequence of an exogenous selection of institutions. Our survey of the empirical evidence and our own estimates reveal that it is easy to find convincing evidence supporting either of the two views. Property rights do affect development as suggested by the PoI. However, democracy is mainly an effect of development as suggested by the GT. We conclude that the empirical results are far too mixed to allow for a robust assessment that one of the two views is true and the other false. This finding implies that focusing on institutional development is unlikely to be successful as the key strategy for the economic development of poor countries.
    Keywords: Grand transition, primacy of institutions, democracy, corruption, development
    Date: 2007–06
  11. By: Nils Herger; Roland Hodler; Michael Lobsinger
    Abstract: This paper endeavours to explain the vast differences in the size of capital markets across countries, by drawing together theories emphasising cultural values, dysfunctional institutions, or impediments to trade as obstacles to financial development. To account for endogeneity, instrumental variables pertaining to culture, geography, and colonial history are employed. We find that trade openness and institutions constraining the political elite from expropriating financiers exhibit a strong positive effect on the size of capital markets. Conversely, cultural beliefs and the cost of enforcing financial contracts seem not to introduce significant obstacles for financial development.
    Keywords: Financial Development, Culture, Institutional Quality, Trade
    Date: 2007–06
  12. By: Gabriele Camera; Marco Casari
    Abstract: We study the emergence of norms of cooperation in experimental economies populated by strangers interacting indefinitely and lacking formal enforcement institutions. In all treatments the efficient outcome is sustainable as an equilibrium. We address the following questions: can these economies achieve full efficiency? Which institutions for monitoring and enforcement promote cooperation? Finally, what classes of strategies are employed to achieve high efficiency? We find that, first, cooperation can be sustained even in anonymous settings; second, some type of monitoring and punishment institutions significantly promote cooperation; and, third, subjects dislike indiscriminate strategies and prefer selective strategies.
    Keywords: experiments, repeated games, cooperation, equilibrium selection, prisoners’ dilemma, random matching
    JEL: C70 C92 D44 D51
    Date: 2007–06
  13. By: Wilhelmsson, Mats (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Innovation networking has become both more feasible with improved telecommunication and more important as it usually produces research of higher quality. However, the spatial distribution of academic networks and innovative networks are not uniform. Despite overwhelming evidence on the benefits of collaboration, patent data from 1994-2001 in Sweden demonstrate that innovation networks are not very common. In addition, the pattern of innovative networks is very fragmented. Our results indicate that innovation networks are more likely to exist in densely populated areas with a diversified industry. Face-to-face contacts in such areas seem to promote networking. Moreover, science-oriented industries appear to benefit more from proximity to universities when it comes to collaboration. However, the size of the market does not matter at all when it comes to collaboration, more important is the density and diversity of the market.
    Keywords: innovation; networks; patent; collaboration
    JEL: N34 O31 R11
    Date: 2007–08–08

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