nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2009‒05‒30
nine papers chosen by
Fabio Sabatini
University of Siena

  1. Are Happier People Better Citizens? By Cahit Guven
  2. Bonding and Bridging Social Capital and Economic Growth By Beugelsdijk, S.; Smulders, J.A.
  3. Uncivil societies - a theory of sociopolitical change By Monga, Celestin
  4. Social Group Disparities and Poverty in India By Rohit Mutatkar
  5. Age at Arrival, English Proficiency, and Social Assimilation Among U.S. Immigrants By Hoyt Bleakley; Aimee Chin
  6. Can corporate social responsibility help us understand the credit crisis? By Argandoña, Antonio
  7. Where Angels Fear to Trade: The Role of Religion in Household Finance By Renneboog, L.D.R.; Spaenjers, C.
  8. The effect of social diversity on volunteering: Evidence from New Zealand By Jeremy Clark; Bonggeun Kim
  9. Village Funds and Access to Finance in Rural Thailand By Menkhoff, Lukas; Rungruxsirivorn, Ornsiri

  1. By: Cahit Guven
    Abstract: This paper presents evidence on causal influence of happiness on social capital and trust using German Socio-Economic Panel. Exploiting the unexplained cross-sectional variation in individual happiness (residuals) in 1984 to eliminate the endogeneity problem, the paper nds that happier people trust others more, and importantly, help create more social capital. Specifically, they have a higher desire to vote, perform more volunteer work, and more frequently participate in public activities. They also have a higher respect for law and order, hold more association memberships, are more attached to their neighborhood, and extend more help to others. Residual happiness appears to be an indicator of optimism, and has an inverse U-shaped relationship with social capital measures. The findings also suggest that the relationship between happiness and social capital strengthened in the world in the last decade.
    Keywords: happiness, trust, social capital, optimism.
    JEL: Z13
  2. By: Beugelsdijk, S.; Smulders, J.A. (Tilburg University, Center for Economic Research)
    Abstract: In this paper we develop a formal model of economic growth and two types of social capital. Following extant literature, we model social capital as participation in two types of social networks: first, closed networks of family and friends, and, second, open networks that bridge different communities. Higher levels of social capital may crowd out economic growth through a reduction of working time. At the same time, participation in intercommunity networks reduces incentives for rent seeking and cheating, promoting economic growth. We test our hypotheses in a sample of European regions using unique data from the European Value Studies (EVS). Our findings show that it is important to distinguish between the nature of the social interaction.
    Keywords: social capital;economic growth;Europe;regions
    JEL: O40 R11 Z13
    Date: 2009
  3. By: Monga, Celestin
    Abstract: In times of crises, it is always useful to revisit some of the paradigms that underlie collective thinking and action. For nearly 200 years, most social science has relied on the assumption that the emergence of strong and nurturing social capital through a vibrant civil society yields all kind of positive externalities to society. Following intuition and anecdotal observations from Alexis de Tocqueville, a large body of theoretical and empirical research has attempted to confirm that societies strive politically and economically when they are able to build strong non-state actors and community organizations. Many disciplines-mainly political science, economics, law, and international relations-have constructed influential analytical frameworks in support of that general proposition. This paper examines the philosophical foundations of conventional wisdom and observes that it often fails to take into account the dark side of some civil society groups, from the mafia to Al Qaeda. While acknowledging the potential contribution of civil society to the development process, the paper also cautions again the rush to circumvent the state, which sometimes sustains community-based initiatives in poor countries. It suggests the possibility of the production of negative social capital by non-state actors.
    Keywords: Parliamentary Government,Civil Society,Social Inclusion&Institutions,Corporate Law,Government Diagnostic Capacity Building
    Date: 2009–05–01
  4. By: Rohit Mutatkar
    Abstract: This paper seeks to provide a profile of social group disparities and poverty in India,where social groups are classified as scheduled caste, scheduled tribe and other social groups, and examine the factors underlying differences in levels of living between these groups and for each group separately. The paper argues that social group disparities in levels of living are the result of historically rooted ‘social disadvantages’ for scheduled castes and scheduled tribes, by way of social exclusion and physical exclusion respectively, which continue to operate in contemporary Indian society.[IGIDR WP 2005 04]
    Keywords: Poverty; Scheduled Caste; Scheduled Tribe; Exclusion; India;social justice; equity; Social group disparities; inequalities
    Date: 2009
  5. By: Hoyt Bleakley (Graduate School of Business, University of Chicago, NBER, and CReAM); Aimee Chin (Department of Economics, University of Houston, and NBER)
    Abstract: Are U.S. immigrants’ English proficiency and social outcomes the result of their cultural preferences, or of more fundamental constraints? Using 2000 Census microdata, we relate immigrants’ marriage, fertility and residential location variables to their age at arrival in the U.S., and in particular whether that age fell within the “critical period” of language acquisition. We interpret the differences between younger and older arrivers as effects of English-language skills and construct an instrumental variable for English-language skills. Two-stage-least-squares estimates suggest that English proficiency increases the likelihood of divorce and intermarriage. It decreases fertility and, for some groups, ethnic enclave residence.
    Date: 2008–05
  6. By: Argandoña, Antonio (IESE Business School)
    Abstract: The financial crisis which started in the United States in 2007 and which has spread throughout the world has many causes, one of which is the abundance of unethical behavior on the part of many of those who made the financial decisions, such as regulators, supervisors, managers and employees, and also on the part of a not insignificant number of their customers. In this paper, we will seek to shed light on the crisis's ethical content and show how the generalized practice of corporate social responsibility within financial institutions could have helped reduce the magnitude of the crisis, perhaps not systemically but definitely in some of the organizations that have been most affected by the crisis. For this to happen, however, a particular concept of social responsibility would have to have been applied, a responsibility with an ethical basis - or, more specifically, a voluntarily assumed ethics that was capable of giving rise to self-generated duties among financial decision-makers.
    Keywords: Crisis; Ethics; Finance; Corporate Social Responsibility; Financial system;
    JEL: G12 G31 M21
    Date: 2009–03–19
  7. By: Renneboog, L.D.R.; Spaenjers, C. (Tilburg University, Center for Economic Research)
    Abstract: Although the relationship between religion and economic development on the macro-level has been investigated, it is less clear how religious background influences economic attitudes and financial decision-making on the level of the individual or household, the micro-level. We use panel data from the extensive DNB Household Survey, covering the period from 1995 to 2008, to investigate whether – and through which channel – religious denomination affects household finance in the Netherlands. We find evidence that, in general, religious households care more about saving, are more risk-averse, consider themselves more trusting, have a more external locus of control, and have a stronger bequest motive. Furthermore, Catholics and Protestants have longer planning horizons, and Protestants and Evangelicals seem to have a greater sense of individual financial responsibility. Most of these factors matter for household financial decision-making, albeit to differing degrees. Using our religion variables as instruments for economic attitudes (and controlling for demographic and background risk characteristics), we demonstrate that the above-mentioned differences in economic beliefs and preferences explain the higher propensity to save by religious households in general and the lower investments in risky assets by Catholic households.
    Keywords: Economic Attitudes; Culture; Religion; Household finance; Portfolio choice; Trust.
    JEL: A1 D1 Z1
    Date: 2009
  8. By: Jeremy Clark (University of Canterbury); Bonggeun Kim
    Abstract: We survey the emerging empirical literature that identifies a negative relationship between heterogeneity of race, ethnicity, income etc. at the neighborhood level, and individuals’ likelihood of contributing money or time to public goods or of trusting their neighbors. One problem in this literature is that the “neighborhoods” used are often by necessity overly broad, and arguably not those that individuals experience day to day. We present a simple model showing the effect of neighbourhood definition when measuring the effect of heterogeneity on peoples’ actions or attitudes. The broad definitions commonly used could produce a spurious negative effect of heterogeneity. With these limitations in view, we use panel data from the 1996, 2001 and 2006 censuses in New Zealand to test whether heterogeneity by race/ethnicity, birthplace, income or language negatively affect New Zealander’s probability of volunteering. Using cross sectional analysis, we estimate the effect of each kind of heterogeneity on volunteering at the “meshblock” (tract) and broader “area unit” levels. We control for confounding neighbourhood characteristics such as household income and deprivation, employment and education status, and religious affiliation. We next address the issue of endogenous self-selection to neighbourhood by comparing cross sectional and fixed effects analysis over the three years of the census. In results, we find that the size of neighbourhood unit significantly affects the estimated effects of heterogeneity on volunteering. Second, in cross sectional analysis at the meshblock level, volunteering appears reduced by heterogeneity of race/ethnicity and language, not affected by heterogeneity of birthplace, and increased by heterogeneity of household income. Third, in fixed effects analysis only racial/ethnic heterogeneity retains a direct negative effect on volunteering.
    Keywords: heterogeneity; volunteering
    JEL: D13 D64 H31
    Date: 2009–05–14
  9. By: Menkhoff, Lukas; Rungruxsirivorn, Ornsiri
    Abstract: This paper examines whether recently introduced "village funds", one of the largest microfinance programs ever implemented, improve access to finance. Village funds are analyzed in a cross-sectional approach in relation to competing financial institutions. We find, first, that they reach the target group of lower income households better than formal financial institutions. Second, village funds provide loans to those kinds of borrowers which tend to be customers of informal financial institutions. Third, village funds help to reduce credit constraints. Thus, village funds provide services in the intended direction. However, they do this to a quite limited degree, questioning their efficiency.
    Keywords: informal financial institutions, microfinance, credit constraint, Thailand, Asia
    JEL: O16 O17 G21
    Date: 2009–05

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