nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒03‒08
ten papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Does Social Capital Mitigate Precariousness? By Fabio Sabatini
  2. Norms and Values of the Various Microfinance Institutions By Marek Hudon
  3. Presentation Effects in Cross-Cultural Experiments - An Experimental Framework for Comparisons By Sebastian J. Goerg; Gari Walkowitz
  4. Conflict Leads to Cooperation in Nash Bargaining By Kareen Rozen
  5. Democracy, Collective Action and Intra-elite Conflict By Ghosal, Sayantan; Proto, Eugenio
  6. Poverty and social exclusion: two sides of the same coin or dynamically interrelated processes? By Francesco Devicienti; Ambra Poggi
  7. Do Sex Offender Registration and Notification Laws Affect Criminal Behavior? By J.J. Prescott; Jonah E. Rockoff
  8. On The Economics oF Organized Crime By Vimal Kumar; Stergios Skaperdas
  9. Durable Goods, Innovation and Network Externalities By Cerquera Dussán, Daniel
  10. The Role of Non-governmental Organisations (NGOs) in Japan’s Foreign Aid Policy By Furuoka, Fumitaka

  1. By: Fabio Sabatini (University of Siena)
    Abstract: There is a surprising gap in the economic literature on social capital. First, we lack studies addressing the effects of social capital on those facets of development that can contribute in making growth more sustainable in the long run, like, for example, human development and social cohesion. Second, it is still unclear what type of networks may exert a positive effect on the different dimensions of development. In particular, the literature has not yet provided a rigorous assessment of the role of strong family ties, that are generally referred to as a form of bonding social capital causing backwardness. This paper carries out an empirical investigation into the relationship between the three types of social capital so far identified by the literature (i.e. bonding, bridging and linking), human development, and labour precariousness, in the belief that precariousness and uncertainty play a crucial role in determining the social cohesion and well-being that are necessary to make growth sustainable in the long run.
    Keywords: Social capital, Human development, Labour market, Precariousness, Italy
    JEL: J24 O15 Z13
    Date: 2008–01
  2. By: Marek Hudon (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and Harvard University, Boston.)
    Abstract: This article studies the role of norms and values in the microfinance sector. Microfinance projects implemented in India use a wide range of different organizational structures. A classification of the sector is proposed, mapping the institutions along two axes: the profit motive (profit vs. not-for-profit) and the decision making style (centralized vs. un-centralized). Some Microfinance Institutions (MFIs) base their interactions on rigid norms or rules; while others are based on values. We argue that the private sector will tend to produce the operating rules of the microfinance system while the not-for-profit institutions that are using an inclusive decision-making process are more likely to influence the ethical norms in the sector. Nevertheless, this classification is not static as recent events in South-India shows that norms, such as the interest rates, can be politically and emotionally invested to the point that they are about to become values in the sector.
    Keywords: microfinance, norms, values, India, inclusive
    Date: 2008–02
  3. By: Sebastian J. Goerg; Gari Walkowitz
    Abstract: This paper investigates the impact of game presentation dependent on   ethnical affiliation. Two games representing the same logical and strategical problem are   introduced. Presented games are continuous prisoner’s dilemma games where decision makers   can choose an individual level of cooperation from a given range of possible actions. In the   first condition, a positive transfer creates a positive externality for the opposite player. In   the second condition, this externality is negative. Accomplishing a cross-cultural experimental   study involving subjects from the West Bank and Jerusalem (Israel) we test for a strategic   presentation bias applying these two conditions. Sub jects in the West Bank show a substantially   higher cooperation level in the positive externality treatment. In Jerusalem no   presentation effect is observed. Critically discussing our findings, we argue that a cross-cultural   comparison leads to only partially meaningful and opposed results if only one treatment   condition is evaluated. We therefore suggest a complementary application and consideration of   different presentations of identical decision problems within cross-cultural research.
    Keywords: Cooperation, presentation of decision problems, framing, methodology, cross-cultural research
    JEL: A13 C72 C91 F51 Z13
  4. By: Kareen Rozen (Cowles Foundation, Yale University)
    Abstract: We consider a Nash demand game where N players come to the bargaining table with requests for coalition partners and a potentially generated resource. We show that group learning leads to complete cooperation and an interior core allocation with probability one. Our arguments highlight group dynamics and demonstrate how destructive group behaviors -- exclusion, divide and conquer tactics, and scapegoating -- can propel groups toward beneficial and self-enforcing cooperation.
    Keywords: Nash bargaining, Learning, Core, Group conflict
    JEL: C7
    Date: 2008–03
  5. By: Ghosal, Sayantan (Department of Economics, University of Warwick); Proto, Eugenio (Department of Economics, University of Warwick)
    Abstract: This paper studies the conditions under which intra-elite conflict leads to a democracy. There are two risk averse elites competing for the appropriation of a unit of social surplus, with an ex-ante uncertainty about their future relative bargaining power, and a large non-elite class unable to act collectively. We characterize a democracy as consistng of both franchise extension to, and lowering the cost of collective political activity for, individuals in the non-elite. In the absence of democracy, the stronger elite is always able to appropriate the entire surplus. We show that in a democracy, the newly enfranchised non-elite organize and always prefer to form a coalition with weaker elite against the stronger resulting in a more balanced surplus allocation between the two elites. Accordingly, the elites choose to democratize if they are sufficiently risk averse. Our formal analysis can account for stylized facts that emerge from a comparative analysis of Indian and Western European democracies.
    Keywords: Democracy, conflict ; collective action ; coalition formation ; party formation ; bargaining ; risk-sharing
    JEL: D74 O12 H11
    Date: 2008
  6. By: Francesco Devicienti; Ambra Poggi
    Abstract: There is growing interest in the analysis and measurement of social exclusion, to complement the static and dynamic literature on income poverty. On theoretical grounds, social exclusion and income poverty are seen as different processes, but with closely interrelated dynamics. However, our empirical understanding of the way these two processes dynamically interact at the individual level is still very limited. To shed some light on the issue, we use a dynamic bivariate probit model, controlling for unobserved heterogeneity and Wooldridge (2005)-type initial conditions. Both first and second order Markov dynamics are examined. We estimate the model using the Italian sample of the ECHP, waves 1-8, and find a sizable extent of state dependence in both poverty and social exclusion. Moreover, there are dynamic cross-effects, implying that poverty and social exclusion are mutually reinforcing. Social policies aimed at eradicating poverty and avoiding individuals’ social and economic marginalization should take these interaction effects explicitly into account.
    Keywords: poverty dynamics, social exclusion, state dependence, dynamic bivariate probit model with random effects.
    JEL: I32 C33 C35 C61
    Date: 2007
  7. By: J.J. Prescott; Jonah E. Rockoff
    Abstract: In recent decades, sex offenders have been the targets of some of the most far-reaching and novel crime legislation in the U.S. Two key innovations have been registration and notification laws which, respectively, require that convicted sex offenders provide valid contact information to law enforcement authorities, and that information on sex offenders be made public. Using detailed information on the timing and scope of changes in state law, we study how registration and notification affect the frequency of sex offenses and the incidence of offenses across victims, and check for any change in police response to reported crimes. We find evidence that registration reduces the frequency of sex offenses by providing law enforcement with information on local sex offenders. As we predict from a simple model of criminal behavior, this decrease in crime is concentrated among "local" victims (e.g., friends, acquaintances, neighbors), while there is little evidence of a decrease in crimes against strangers. We also find evidence that community notification deters crime, but in a way unanticipated by legislators. Our results correspond with a model in which community notification deters first-time sex offenses, but increases recidivism by registered offenders due to a change in the relative utility of legal and illegal behavior. This finding is consistent with work by criminologists suggesting that notification may increase recidivism by imposing social and financial costs on registered sex offenders and making non-criminal activity relatively less attractive. We regard this latter finding as potentially important, given that the purpose of community notification is to reduce recidivism.
    JEL: K14 K4
    Date: 2008–02
  8. By: Vimal Kumar (Department of Economics, University of California-Irvine); Stergios Skaperdas (Department of Economics, University of California-Irvine)
    Abstract: The core function of organized crime is the selling of protection. Protection can be real, against third-party crime, or manufactured by the organized crime groups themselves. Mafias and gangs emerge in areas of weak state control, because of prohibition and geographic, ethnic, or social isolation. Although competition is considered good in economics, in the case of organized crime the predatory competition that is more likely to take place is harmful. The costs of organized crime include the resources expended on the activity, more ordinary productive and investment distortions, as well as other dynamic effects on occupational choice.
    Keywords: Law and economics; Property rights; Governance
    JEL: K00 K42 L10 L22 O17
    Date: 2008–02
  9. By: Cerquera Dussán, Daniel
    Abstract: We develop a model of R&D competition between an incumbent and a potential entrant with network externalities and durable goods. We show that the threat of entry eliminates the commitment problem that an incumbent may face in its R&D decision due to the goods’ durability. Moreover, a potential entrant over-invests in R&D and an established incumbent might exhibit higher, equal or lower R&D investments in comparison with the social optimum. In our model, the incumbent’s commitment problem and the efficiency of its R&D level are determined by the extent of the network externalities.
    Keywords: Network externalities, Durable Goods, Innovation, Imperfect Competition
    JEL: D21 D85 L13 O31
    Date: 2007
  10. By: Furuoka, Fumitaka
    Abstract: The reinforcement of the Non-governmental organisations’ role in Japan’s ODA program is a challenging task. However, if this objective is achieved, at least three advantages could ensue. Firstly, Japanese NGOs would be able to independently carry out the small-scale aid projects that directly address the needs of local communities in aid recipient countries. These grassroots aid projects could complement the government-supervised large-scale aid projects. Secondly, the Japanese government could utilize NGOs’ staff as an alternative source of information. Finally, effective co-operation between NGOs and the government could help enhancing the transparency of Japan’s foreign aid policy. Under the current system, bureaucrats dominate the policymaking process so that it is difficult for outsiders to access the information on Japan’s ODA program.
    Keywords: Foreign Aid; NGOs; Japan
    JEL: F35
    Date: 2008–03–02

This nep-soc issue is ©2008 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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