nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒11‒24
twenty-one papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Bowling Alone, Drinking Together By Paolo Buonanno; Paolo Vanin
  2. Is there more than one linkage between Social Network and Inequality? By D'Angelo, Emanuela; Lilla, Marco
  3. Regions Matter: How Regional Characteristics Affect External Knowledge Acquisition and Innovation By Keld Laursen; Francesca Masciarelli; Andrea Prencipe
  4. The Focusing and Informational Effects of Norms on Pro-Social Behavior By Erin Krupka; Roberto A. Weber
  5. Social Determinants of Labor Market Status of Ethnic Minorities in Britain By Martin Kahanec; Mariapia Mendola
  6. Social Deprivation and Exclusion of Immigrants in Germany By John P. Haisken-DeNew; Mathias Sinning
  7. The Spread of Free-Riding Behavior in a Social Network By Dunia Lopez Pintado
  8. The Minnesota Income Tax Compliance Experiment: Replication of the Social Norms Experiment By Coleman, Stephen
  9. A Theory of Destructive Entrepreneurship By Sameeksha Desai; Zoltan J. Acs
  10. Ethnic Competition and Specialization By Martin Kahanec
  11. Trust, Child Care Technology Choice and Female Labor Force Participation By Mayssun El-Attar
  12. The Importance of Trust for Investment: Evidence from Venture Capital  By L. Bottazzi; M. Da Rin; T. Hellmann
  13. "Homeless Networks and Geographic Concentration: Evidence from Osaka City" By Shinichiro Iwata; Koji Karato
  14. Poverty traps: a perspective from development economics By Alice Nicole Sindzingre
  15. Growth, Development and Structural Change of Innovator Networks - The Case of Jena By Uwe Cantner; Holger Graf
  16. Aid Volatility, Policy and Development By John Hudson; Paul Mosley
  17. Technology transfer within MNEs: An investigation of inter-subsidiary competition and cooperation By Dan Li; Manuel Portugal Ferreira; Fernando Serra
  18. Working for God? Evidence form a Change in Financing of not-for-profit Health Care Providers in Uganda By Reinikka, Ritva; Svensson, Jakob
  19. Time Allocation between Work and Family over the Life-Cycle: A Comparative Gender Analysis of Italy, France, Sweden and the United States By Dominique Anxo; Lennart Flood; Letizia Mencarini; Ariane Pailhé; Anne Solaz; Maria Letizia Tanturri
  20. Monotheism (From a Sociopolitical and Economic Perspective) By Murat Iyigun
  21. Are NGOs the Better Donors? A Case Study of Aid Allocation for Sweden By Axel Dreher; Florian Mölders; Peter Nunnenkamp

  1. By: Paolo Buonanno (Università di Bergamo); Paolo Vanin (Università di Padova)
    Abstract: Alcohol consumption may be associated to a rich social life, but its abuse might be related to a poor social life. This paper investigates whether alcohol consumption is a socially enjoyed good (a complement of social relations) or a substitute for social relations. In particular, it explores whether the answer changes between use and abuse, beer, wine and spirits, youth and adults, controlling or not for family influence and unobserved heterogeneity, and for various forms of social relations. Controlling for a great number of covariates and allowing for non linear and identity-specific family interaction effects, we find that alcohol consumption is a socially enjoyed good.
    Keywords: Social relations, Social interaction, Family, Alcohol consumption, Binge drinking
    JEL: C21 D12 I12 Z13
    Date: 2007–11
  2. By: D'Angelo, Emanuela (Universita Politecnica, delle Marche, Ancona, Italy); Lilla, Marco (Universita Politecnica, delle Marche, Ancona, Italy)
    Abstract: The paper aims to analyse how income inequality affects social networks strength in fourteen European Countries. We introduce some new evidences by using the ECHP for testing the networks-inequality nexus and being able to construct directly inequality indices from the microdata as well their decomposition. In particular, we focus on two main point: firstly, we analyse how total income inequality could be related to social network; secondly, we introduce the "clustered network" definition, by decomposing total income inequality based on the education level. We test the existence of a pluralism linkage between Social Network and Inequality and many results confirm that the linkage is neither unambiguous nor unidirectional. We introduce and stress some important issue. First, we use dierent levels of social network: narrow, wide and anonymous; second, we use different inequality indexes (different sensitiveness to changes at different part of the income distribution); third, the ambiguous linkage could be explained on one hand by the positive role of emulation and reciprocity behaviors and on the other hand by negative ones of the envy, amoral familism and keeping up with the Joneses mechanisms. Finally, we stress the different roles of within and between components of inequality. Our idea is that higher income inequality - related to the changing education premia - could affect social network formation among individuals through two different channels: higher inequality among dierent educated ind ividuals could raise (clustered networks), while higher inequality among similars could halt the social networks.
    Keywords: Social Network; Inequality ; Clustered Network ; Envy ; Emulation
    JEL: C25 D31 D63 D64 I2
    Date: 2007–11
  3. By: Keld Laursen; Francesca Masciarelli; Andrea Prencipe
    Abstract: To introduce new products and processes, firms often acquire knowledge from other organizations. Drawing on social capital and transaction cost theory, we argue that not only is the impact of such acquisitions on the successful development of product and product innovations dependent on strategic and economic variables, it may also be contingent on the “knowledge characteristics” of the geographical area in which the firm is located. Combining data on social capital at the level of 21 regions with a large scale data set on innovative activities by a representative sample of 2464 Italian manufacturing firms, we find — after controlling for a large set of firm and regional characteristics — that being located in regions characterized by high levels of social interaction leads to a higher propensity to innovate. In addition, being located in an area characterized by a high degree of social interaction positively moderates the effectiveness of externally acquired R&D on innovation inclination.
    Keywords: Social capital; external acquisition; process innovation; product innovation
    JEL: L23 O31
    Date: 2007
  4. By: Erin Krupka (IZA); Roberto A. Weber (Carnegie Mellon University)
    Abstract: This paper reports an experiment examining the effect of social norms on pro-social behavior. We test two predictions derived from work in psychology regarding the influence of norms. The first is a "focusing"influence, whereby norms only impact behavior when an individual’s attention is drawn to them; and the second is an "informational" influence, whereby a norm exerts a stronger impact on an individual the more others he observes behaving consistently with that norm. We find support for both effects. Either thinking about or observing the behavior of others produces increased pro-social behavior - even when one expects or observes little pro-social behavior on the part of others - and the degree of prosocial behavior is increasing in the actual and expected pro-social behavior of others. This experiment eliminates strategic influences and thus demonstrates a direct effect of norms on behavior.
    Keywords: norms, pro-social behavior, experiments, dictator game
    JEL: D63 C91
    Date: 2007–11
  5. By: Martin Kahanec (IZA); Mariapia Mendola (University of Milan Bicocca)
    Abstract: The labor market outcomes of ethnic minorities in advanced societies and their dependence on social relationships and membership in social networks are important empirical issues with significant policy consequences. We use detailed micro-data on multiple-origin ethnic minorities in England and Wales and a discrete choice model to investigate these issues. We find that the core family structure and contacts with parents and children away (in Britain) increases the probability of self-employment. On the other hand, engagement in organizational social networks is more likely to channel the same people into paid employment. Finally, disaggregating different types of social networks along their compositional characteristics, we find that having ethnic friends is positively associated with the likelihood to be self-employed while integration in mixed or non-ethnic social networks facilitates paid employment among minority individuals. These findings hint at a positive role of social integration on employment opportunities of ethnic communities in host societies.
    Keywords: labor market, self-employment, ethnic minorities, social ties
    JEL: J7 J15 J21
    Date: 2007–11
  6. By: John P. Haisken-DeNew (RWI Essen and IZA); Mathias Sinning (RWI Essen and IZA)
    Abstract: This paper aims at providing empirical evidence on social exclusion of immigrants in Germany. We demonstrate that when using a conventional definition of the social inclusion index typically applied in the literature, immigrants appear to experience a significant degree of social deprivation and exclusion, confirming much of the economic literature examining the economic assimilation of immigrants in Germany. We propose a weighting scheme that weights components of social inclusion by their subjective contribution to an overall measure of life satisfaction. Using this weighting scheme to calculate an index of social inclusion, we find that immigrants are in fact as "included" as Germans. This result is driven strongly by the disproportionately positive socio-demographic characteristics that immigrants possess as measured by the contribution to their life satisfaction.
    Keywords: social exclusion, international migration, integration
    JEL: F22 I31 Z13
    Date: 2007–11
  7. By: Dunia Lopez Pintado
    Abstract: We study a model where agents, located in a social network, decide whether to exert effort or not in experimenting with a new technology (or acquiring a new skill, innovating, etc.). We assume that agents have strong incentives to free ride on their neighbors' effort decisions. In the static version of the model efforts are chosen simultaneously. In equilibrium, agents exerting effort are never connected with each other and all other agents are connected with at least one agent exerting effort. We propose a mean-field dynamics in which agents choose in each period the best response to the last period's decisions of their neighbors. We characterize the equilibrium of such a dynamics and show how the pattern of free riders in the network depends on properties of the connectivity distribution.
    Keywords: free ride, independent set, local public good, mean field, social network.
    JEL: C45 C73 D00 D83 D85 H41
    Date: 2007–11–04
  8. By: Coleman, Stephen
    Abstract: This research note reports the results of a follow-up experiment conducted to validate an earlier experiment showing that if taxpayers overestimate the prevalence of tax evasion, their voluntary compliance can be increased by informing them about the true rate of cheating. The result confirms that tax compliance is influenced partly by social conformity with perceived social norms against cheating. The experiments were done by the Minnesota Department of Revenue in 1995 and 1996, but only the first experiment has been publicly reported to date (Coleman, 1996).
    Keywords: Tax compliance; experiment; social norms; social conformity
    JEL: C9 Z1 H2 H26
    Date: 2007–11
  9. By: Sameeksha Desai (Max Planck Institute of Economics and George Mason University); Zoltan J. Acs (George Mason University and Max Planck Institute of Economics)
    Abstract: Policy interest since the early 1980s has focused in different ways on the creation of a large, productive, taxable economy - in which entrepreneurship plays a role for employment, income growth and innovation. The current understanding of various forms of entrepreneurship remains incomplete, focusing largely on productive and unproductive entrepreneurship. However, destructive entrepreneurship plays an important role in many, if not most, economies. This paper addresses the conceptual gap in the allocation of entrepreneurship by proposing a theory of destructive entrepreneurship.
    Keywords: destructive entrepreneurship, allocation of entrepreneurship, rent-seeking, rent-destroying, incentives, institutions, property rights, contractual enforcement, conflict, social capital, trust, ethnic capital
    JEL: O17 O20 P00
    Date: 2007–11–12
  10. By: Martin Kahanec (IZA)
    Abstract: Are ethnic specialization and thus a downward sloping labor demand curve fundamental features of labor market competition between ethnic groups? In a general equilibrium model, this paper argues that spillover effects in skill acquisition and social distances between ethnic groups engender equilibrium regimes of skill acquisition that differ in their implications for ethnic specialization. Specifically, fundamental relationships through which relative group sizes determine whether ethnic specialization arises and in what degree are established. Thus, this paper theoretically justifies a downward sloping labor demand curve and explains why some ethnic groups earn more than others, ethnic minorities underperforming or outperforming majorities.
    Keywords: human capital, ethnic group, labor market, ethnic specialization, spillover effects
    JEL: J15 J24 J70 O15
    Date: 2007–11
  11. By: Mayssun El-Attar (European University Institute and IZA)
    Abstract: In this paper we test the effect of trust on the choice of child care technology. We estimate individual-level trust as a latent attribute using survey questions on personal attitudes by applying the econometric methodology by Spady (2007). Compared to other measures of trust, using this technique has several advantages: It makes more efficient use of information by allowing the aggregation of information from several questions and by exploiting additional information from personal and demographic characteristics. It requires very few parametric assumptions and it is conceptually cleaner and more consistent with theory than the proxies or demographic characteristics often used in previous work. Having estimated the individual attitudes to trust using data from the European Social Survey, we analyze their personal, demographic, and regional determinants. We find that trust matters for the degree of externalness of the child care technology people choose. It can therefore be a possible explanation for differences in female labor force participation across countries and across sociological groups.
    Keywords: trust, child care, labor force participation, latent attitudes, item response models
    JEL: J13 J22 D10
    Date: 2007–10
  12. By: L. Bottazzi; M. Da Rin; T. Hellmann
    Date: 2007–10
  13. By: Shinichiro Iwata (Faculty of Economics, University of Toyama); Koji Karato (Faculty of Economics, University of Toyama)
    Abstract: Homeless people in Osaka City are geographically concentrated. The purpose of this paper is to examine this geographic concentration by focusing on homeless networks. The data we use contain information on Osaka City.s homeless population by census blocks. The estimated results of a spatial autoregressive model with autoregressive disturbances show that the homeless network is signi.cantly positive across census blocks. Networks exist in a homeless society.
    Date: 2007–11
  14. By: Alice Nicole Sindzingre
    Abstract: The concepts of coordination and cooperation are widely used in economics, and particularly in game theory. They were also at the foundation of development economics at the time of WWII, with Paul Rosenstein-Rodan highlighting the existence of intersectoral spillovers effects, multiple equilibria and underdevelopment traps. These concepts returned to the forefront of development theory in the 1970s with the notions of coordination failure and poverty traps, as well as the research on social norms. One example was Samuel Bowles’ seminal concept of ‘institutional poverty traps’, i.e. highly inegalitarian institutions that persist even though they are inefficient. Membership institutions are of particular relevance in developing countries, and therefore in development economics. The paper explores the cognitive dimensions of coordination failures and institutional traps; it reveals that local institutions in developing countries may be efficient and examines the conditions in which norms create poverty traps, in particular membership norms. Firstly, it is argued that institutions and norms are key causes of the formation and persistence of poverty traps. Institutions and norms are complex cognitive devices, some beliefs and norms appear to be particularly resilient and difficult to revise. Secondly, it is shown that no particular institutional form is ex ante a cause of poverty traps: depending on contexts, the same institutional forms can be efficient or inefficient. It is the combination of multiple elements – economic and political environment, and social norms - that create thresholds effects and entrap groups into low equilibria. Thirdly, it is argued that the norms that organise group membership, because they involve beliefs that are difficult to revise, are typical factors of poverty traps.
    Keywords: Poverty traps, coordination failures, social norms
    Date: 2007
  15. By: Uwe Cantner (Friedrich-Schiller-University Jena, Department of Economics. Chair of Economics / Mircroeconomics); Holger Graf (Friedrich-Schiller-University Jena, Department of Economics. Chair of Economics / Mircroeconomics)
    Abstract: We attempt to extend the static analysis of innovator networks by providing case study based insights into the dynamic, developmental or evolutionary pattern of such networks. In the theoretical part, we develop some building blocs that are considered central to a theory of network evolution. Especially, we focus on the growth of innovator networks and their structural change over time, i.e. how new relationships come into existence and existing ties are cut, how new actors join the system, and other actors leave it. The factors shaping these structural properties, can explain how coherence might increase in some periods while it might decrease in others. We exemplify these patterns for the case of the Jena network of innovators during the period 1995-2001.
    Keywords: Innovator network, internal/external relationships, network entry and exit
    JEL: O31 L14 R11
    Date: 2007–11–12
  16. By: John Hudson; Paul Mosley (Department of Economics, The University of Sheffield)
    Keywords: aid volatility, disasters, trust
    JEL: O16
    Date: 2007–10
  17. By: Dan Li (Indiana University, EUA); Manuel Portugal Ferreira (Instituto Politécnico de Leiria, Portugal); Fernando Serra (UNISUL Business School, Brasil)
    Abstract: Much theory and research that seeks to explain why and how technology transfers occur within multinational enterprises (MNEs) actually addresses the question of how these transfers occur among cooperative subsidiaries, and relies on the assumption of inter-subsidiary cooperation. However, subsidiaries do not always cooperate. We suggest that the success of technology transfer among subsidiaries depends on the extent to which the relationships among an MNE's subsidiaries (i.e. inter-subsidiary) are competitive or cooperative. Inter-subsidiary cooperation is determined by the MNE's international strategy, organizational structure, and the social relationships among subsidiaries. Both hierarchical and social relational factors drive the potential for inter-subsidiary multimarket competition that originates from the overlap on the subsidiaries' products, technologies, and market portfolios.
    Keywords: technology transfer, subsidiaries, competition and cooperation, international strategy
    JEL: M1
    Date: 2007–08
  18. By: Reinikka, Ritva (World Bank); Svensson, Jakob (Institute for International Economic Studies, Stockholm University)
    Abstract: What motivates religious not-for-profit health care providers? This paper uses a change in financing of not-for-profit health care providers in Uganda to test two theories of organizational behavior. We show that financial aid leads to more laboratory testing, lower user charges, and increased utilization. These findings are consistent with the view that religious not-for-profit providers are intrinsically motivated to serve (poor) people and that these preferences matter quantitatively.
    Keywords: not-for-profit organizations; health care provision; organizational behavior; Uganda
    JEL: I10 L31 O12
    Date: 2007–11–14
  19. By: Dominique Anxo (Vaxjo University); Lennart Flood (Göteborg University and IZA); Letizia Mencarini (University of Florence); Ariane Pailhé (INED, Paris); Anne Solaz (INED, Paris); Maria Letizia Tanturri (University of Pavia)
    Abstract: This article analyses the extent to which changes in household composition over the life course affect the gender division of labour. It identifies and analyses cross-country disparities between France, Italy, Sweden and United States, using most recent data available from the Time Use National Surveys. We focus on gender differences in the allocation of time between market work, domestic work and leisure over the life-cycle. In order to map the lifecycle, we distinguish between nine key cross-country comparable life stages according to age and family structure such as exiting parental home, union formation, parenthood, and retiring from work. By using appropriate regression techniques (Tobit with selection, Tobit and OLS), we show large discrepancies in the gender division of labour at the different life stages. This gender gap exists in all countries at any stage of the life course, but is usually smaller at the two ends of the age distribution, and larger with parenthood. Beyond social norms, the impact of parenthood on time allocation varies across countries, being smaller in those where work-family balance policies are more effective and traditionally wellestablished.
    Keywords: time use, gender, life-cycle, paid and unpaid work
    JEL: D13 J22 O17
    Date: 2007–11
  20. By: Murat Iyigun (University of Colorado, CID, Harvard University and IZA)
    Abstract: The Axial Age, which lasted between 800 B. C. E. and 200 B. C. E., covers an era in which the spiritual foundations of humanity were laid simultaneously and independently in various geographic areas, and all three major monotheisms of Judaism, Christianity and Islam were born between 1200 B. C. E. and 622 C. E. in the Middle East. In this paper, I offer a taxonomy to comprehensively characterize the impact of monotheism on early economic development. Monotheist religions produced a paradigm shift in sociopolitical institutions because they (a) involve a strong degree of increasing returns to scale and the natural monopoly powers commensurate with it, (b) not only personalize the spiritual exchange relationship between the individual and the one deity, but also, due to the fact that this relationship extends into the afterlife as well, enhance individual accountability, and (c) expand their adherents’ time horizon beyond biological life and impact the time discount between one’s lifetime and the after-life. Taken together, these features suggest that the spread of monotheism ought to have promoted sociopolitical stability. Utilizing original historical data between 2500 B. C. E. and 1750 C. E. on 105 limited access orders, such as dynasties, kingdoms and empires, I show that monotheism had a positive and statistically significant impact on the length of reign as well as the average geographical size of social orders. Thus, I find empirical evidence that the birth and adoption of monotheistic religions aided early development both in the West and the Near East until the advent of the Industrial Revolution.
    Keywords: economic development, religion, institutions
    JEL: C72 D74 N33 N43 O10
    Date: 2007–10
  21. By: Axel Dreher (KOF Swiss Economic Institute, ETH Zurich); Florian Mölders; Peter Nunnenkamp (The Kiel Institute for the World Economy, Kiel, Germany)
    Abstract: This paper analyzes whether and to what extent non-governmental organizations (NGOs) outperform official donors by allocating aid in a way that renders effective poverty alleviation more likely. We employ Probit and Tobit models and make use of an exceptionally detailed database that allows an assessment of the allocation of Swedish NGO aid in comparison to the allocation of Swedish official aid. Our results show that NGOs are more selective when deciding about which countries to enter at all. Moreover, in contrast to NGO aid, there is some evidence that political and commercial motives matter for the selection of ODA recipients. However, the Swedish case also supports the skeptical view according to which NGOs are unlikely to outperform official donors by providing better targeted aid when it comes to the allocation across recipients having passed the eligibility test.
    Keywords: Aid allocation, NGO aid, ODA, Sector-specific aid
    JEL: F35 O11 O19
    Date: 2007–11

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