nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2010‒07‒24
eighteen papers chosen by
Fabio Sabatini
Euricse and University of Trento

  1. Social Capital and Political Accountability By Tommaso Nannicini; Andrea Stella; Guido Tabellini; Ugo Troiano
  2. Risk Pooling, Risk preferences, and Social Networks By Orazio Attansio; Abigail Barr; Juan Camilo Cardenas; Garance Genicot; Costas Mehgir
  3. Are gifts and loans between households voluntary? By Margherita Comola; Marcel Fafchamps
  4. Natural disasters and informal risk sharing against illness: networks vs. groups By Yoshito Takasaki
  5. Aid, social capital and village public goods: after the tsunami. By Freire, Tiago; Henderson, J. Vernon; Kuncoro, Ari
  6. The formation of community based organizations in sub-Saharan Africa: An analysis of a quasi-experiment. By Abigail Barr; Marleen Dekker; Marcel Fafchamps
  7. Family Values and the Regulation of Labor By Alberto Alesina; Yann Algan; Pierre Cahuc; Paola Giuliano, UCLA
  8. Insurance and Investment within Family Networks By Manuela Angelucci; Giacomo de Giorgi; Imran Rasul; Marcos A. Rangel
  9. Who Will Be Idol? The Importance of Social Networks for Winning on Reality Shows By Heizler (Cohen), Odelia; Kimhi, Ayal
  10. Juvenile Delinquency and Conformism By Eleonora Patacchini; Yves Zenou
  11. Job Instability and Family Planning: Insights from the Italian Puzzle By Fabio Sabatini
  12. Information, stability and dynamics in networks under institutional constraints. By Norma Olaizola; Federico Valenciano
  13. The Causes of Corruption: Evidence from China By Bin Dong; Benno Torgler
  14. Intrinsic motivations and the non-profit health sector: Evidence from Ethiopia By Danila Serra; Pieter Serneels; Abigail Barr
  15. Moral hazard, peer monitoring, and microcredit: field experimental evidence from Paraguay By Jeffrey Carpenter; Tyler Williams
  16. Why Do Cooperatives Fail? Big versus Small in Ghanaian Cocoa Producers’ Societies, 1930-36 By Chiara Cazzuffi; Alexander Moradi
  17. Collective Action in Diverse Sierra Leone Communities By Rachel Glennerster; Edward Miguel; Alexander Rothenberg
  18. Some Students are Bigger than Others, Some Students’ Peers are Bigger than Other Students’ Peers By Joan Gil; Toni Mora

  1. By: Tommaso Nannicini (Bocconi University, IGIER & IZA); Andrea Stella (Harvard University); Guido Tabellini (Bocconi University, IGIER, CEPR & CIFAR); Ugo Troiano (Harvard University)
    Abstract: In this paper, we empirically investigate a channel through which social capital may improve economic wellbeing and the functioning of institutions: political accountability. The main idea is that voters who share norms of generalized morality demand higher standards of behavior on their elected representavtives, are more willing to bear the cost of acquiring information, and are more likely to base their vote on criteria of social welfare rather than (narrow) personal interest. We take this conjecture to the data using information on the Italian members of Parliament in the postwar period (1948–2001). The empirical evidence shows that the electoral punishment of political misbehavior is considerably larger in electoral districts with high social capital, where social capital is measured by blood donation, and political misbehavior refers to receiving a request of criminal prosecution or shirking in parliamentary activity. Accordingly, episodes of political misbehavior are less frequent in electoral districts with high social capital.
    Keywords: Social Capital, Culture, Political Agency
    JEL: D72 D73 Z10
    Date: 2010–05
  2. By: Orazio Attansio; Abigail Barr; Juan Camilo Cardenas; Garance Genicot; Costas Mehgir
    Abstract: Using date from a field experiment conducted in seventy Colombian municipalities, we investigate who pools risk with whom when risk pooling arrangements are not formally enforced. We explore the roles played by risk attitudes and network connections both theoretically and empirically. We find that pairs of participants who share a bond of friendship or kinship are more likely to (1) join the same risk pooling group and to (2) group assortatively with respect to risk attitudes. Also, consistent with our theoretical finding that when there is a problem of trust the process of pooling assortativley with respect to risk preferences is perturbed, we find (3) only weak evidence of such assorting among unfamiliar individuals.
    Keywords: Field experiment; risk sharing; social sanctions; Insurance; Group formation: matching.
    JEL: C93 D71 D81 O12
    Date: 2009
  3. By: Margherita Comola; Marcel Fafchamps
    Abstract: Using village date from Tanzania, we test whether gifts and loans between households are voluntary while correcting for mis-reporting by the giving and receiving households. Tow maintained assumptions underlie our analysis: answers to a question on who people would turn to for help are good proxies for willingness to link: and, conditional on regressors, the probability of reporting a gift or loan is independent between giving and receiving households. Building on these assumptions, we develop a new estimation methodology and gift giving are voluntary, then both households should, want to rely on each other for help. We find only weak evidence to support bilateral formation. We do, however, find reasonably strong evidence to support unilateral link formation. Results suggest that if a household wishes to enter in a reciprocal relationship with someone who is sufficiently close socially and geographically, it can do so unilaterally.
    Keywords: Risk sharing, reporting bias, social networks
    JEL: C13 C51 D85
    Date: 2010
  4. By: Yoshito Takasaki
    Abstract: Using original household panel survey data collected in rural Fiji, this paper demonstrates how informal risk-sharing institutions upon which poor people heavily rely in times of illness are vulnerable to natural disasters. First, household private cash-inkind transfers do not serve as insurance against illness in the relief phase (several months after the disaster); they do so only after pooled resources are recovered in the reconstruction phase (a few years later) (i.e., the resource effect). Second, risk-sharing arrangements are dependent on the history of labor-time transfers corresponding to housing damage: Only disaster non-victims are insured against illness, because victims have already received labor help for their rehabilitation from non-victims (i.e., the reciprocity effect). The paper also reveals that resource/reciprocity effects exist in endogenously formed networks and pre-formed groups, as risk-sharing pools to a similar degree. Not only do private transfers exchanged among households serve as insurance, but also, household contributions directly made to groups – such as ritual gifts and religious donations – contain risk- sharing components against illness among group members. Although the former finding is commonly evident in the literature, the latter is new. Network formation is directly related to pre-formed groups, especially kin and religious ones.
    Date: 2010–07
  5. By: Freire, Tiago; Henderson, J. Vernon; Kuncoro, Ari
    Abstract: Using survey data on fishermen and fishing villages in Aceh, Indonesia from 2005 and 2007, this paper examines the effect of the December 2004 tsunami and resulting massive aid effort on local public good provision, in particular on public labor inputs, but also public capital choices. Also analyzed are the roles of and changes in local social and political institutions and participation in political and social activities. Such an examination informs not only our understanding of the impacts of aid on villages, but also our understanding of how villages allocate resources to public goods. For public labor inputs, volunteerism is lower in villages with more aid projects, but that is offset if the dominant donor mitigates agency problems by doing its own implementation. Volunteerism is lower in villages with more 'democratic' activity such as elections, although that effect is mitigated in villages with higher levels of social capital pre-tsunami. Evidence suggests volunteerism is lower not because of changes in types of leaders with village elections per se, but rather due to heightened internal divisions associated with elections. Correspondingly for public capital, villages with more democratic activity combined with more aid projects tend to emphasize garnering private aid (e.g., houses) at the expense of public aid (e.g., public buildings).
    Keywords: Aid; Volunteer; Public Goods.
    JEL: H41 O12
    Date: 2010–06–04
  6. By: Abigail Barr; Marleen Dekker; Marcel Fafchamps
    Abstract: Previous analyses of the formation and comparison of community based organizations (CBOs) have used cross section data. So, causal inference has been compromised. We obviate this problem by using data from a quai-experiment in which villages were formed by government officials selecting and clustering households. Our findings are as follow: CBO co-memberships are more likely between geographically proximate households and less likely between early and late settlers, members of female headed households are not excluded, in poorer villages CBO co-membership networks are denser and, while wealthier households may have been instrumental in setting up CBOs, poorer households engage shortly afterwards.
    Keywords: Community Based Organizations; quasi-experiment; social networks
    JEL: D71 D31 O12
    Date: 2010
  7. By: Alberto Alesina (Harvard and Igier); Yann Algan (Sciences Po, Ofce); Pierre Cahuc (Ecole Polytechnique, Crest); Paola Giuliano, UCLA (UCLA)
    Abstract: Flexible labor markets requires geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots.
    Keywords: Family Values, Regulation of Labor, Labor Markets
    JEL: J J2 J4
    Date: 2010–05
  8. By: Manuela Angelucci; Giacomo de Giorgi; Imran Rasul; Marcos A. Rangel
    Abstract: In this paper family networks affecting informal insurance and investment is being studied. Panel data from the randomized evaluation of PROGRESA in rural Mexico and the information on surnames of household heads and their spouses to identify extended families have been used. Members of an extended family: 1) share risk with each other but not with households without relatives in the village; 2) invest more in their children's human capital when hit by positive income shocks, and disinvest less when hit by negative shock, and 3) have a higher long-term increase in capital, income, and consumption than households without relatives in the village. [Working Paper No. 260]
    Keywords: extended family networks, investment, risk-sharing
    Date: 2010
  9. By: Heizler (Cohen), Odelia (Hebrew University, Jerusalem); Kimhi, Ayal (Hebrew University, Jerusalem)
    Abstract: This paper examines, both theoretically and empirically, the effect of social networks and belonging to minority groups (or race) on the probability of winning in reality television shows. We develop a theoretical model that studies viewer behavior by presenting a framework of competition between two contestants from two different groups. The results are examined empirically using unique contestant data from the highly popular reality show "A Star Is Born", the Israeli counterpart of "American Idol". Our main finding is that social networks and belonging to minority groups play key roles in the contestant’s victory, but their effects are nonlinear: the social network effect is U-shaped, whereas that of belonging to a minority group follows an inverted U shape. Beyond the world of reality TV, this paper sheds light on the general behavior of social networks as well.
    Keywords: American Idol, social networks, minority groups, contest, voting
    JEL: J15 D71 P16
    Date: 2010–07
  10. By: Eleonora Patacchini (Università di Roma “La Sapienza” and IZA); Yves Zenou (Stockholm University and Research Institute of Industrial Economics (IFN), IZA, GAINS and CEPR)
    Abstract: This paper studies whether conformism behavior affects individual outcomes in crime. We present a social network model of peer effects with ex-ante heterogeneous agents and show how conformism and deterrence affect criminal activities. We then bring the model to the data by using a very detailed dataset of adolescent friendship networks. A novel social network-based empirical strategy allows us to identify peer effects for different types of crimes. We find that conformity plays an important role for all crimes, especially for petty crimes. This suggests that, for juvenile crime, an effective policy should not only be measured by the possible crime reduction it implies but also by the group interactions it engenders.
    Keywords: Social Networks, Linear-in-means Model, Spatial Autoregressive Model, Social Norms
    JEL: A14 C21 D85 K42 Z13
    Date: 2010–05
  11. By: Fabio Sabatini (University of Trento, Euricse and University of Siena)
    Abstract: This paper carries out an investigation into the socio-economic determinants of couples’ childbearing decisions in Italy. Since having children is in most cases a “couple matter”, the analysis accounts for the characteristics of both the possible parents. Our results do not support established theoretical predictions according to which the increase in the opportunity cost of motherhood connected to higher female labour participation is responsible for the fall in fertility. On the contrary, the instability of the women’s work status (i.e. their being occasional, precarious, and low-paid workers) reveals to be a significant dissuasive deterrent discouraging the decision to have children. Couples with unemployed women are less likely to plan childbearing as well. Other relevant explanatory variables are current family size and the strength of family ties.
    Keywords: Fertility, Family Planning, Parenthood, Childbearing, Participation, Job Instability, Labour Precariousness, Social Capital, Italy
    JEL: C25 J13 Z1
    Date: 2010–06
  12. By: Norma Olaizola (UPV/EHU); Federico Valenciano (UPV/EHU)
    Abstract: In this paper we study the effects of institutional constraints on stability, efficiency and network formation. More precisely, an exogenous "societal cover" consisting of a collection of possibly overlapping subsets that covers the whole set of players and such tha no set in this collection is contained in another specifies the social organization in different groups or "societies". It is assumed that a player may initiate links only with players that belong to at leats one society that s/he also belongs to, thus restricting the feasible strategies and networks. In this way only the players in the possiby empty "societal core", i.e., those that belong to all societies, may initiate links with all individuals. In this setting the part of the current network within each connected component of the cover is assumed to be common knowledge to all players in that component. Based on this two-ingredient model, network and societal cover, we examine the impact of societal constraints on stable/efficient architectures and on dynamics.
    Keywords: Network, Non-cooperative game, Dynamics
    JEL: C72
    Date: 2010–07–14
  13. By: Bin Dong (The School of Economics and Finance, Queensland University of Technology); Benno Torgler (The School of Economics and Finance, Queensland University of Technology, CREMA – Center for Research in Economics, Management and the Arts and CESifo)
    Abstract: In this study we explore in detail the causes of corruption in China using two different sets of data at the regional level (provinces and cities). We observe that regions with more anti-corruption efforts, histories of British rule, higher openness, more access to media and relatively higher wages of government employees are markedly less corrupt; while social heterogeneity, regulation, abundance of resource and state-owned enterprises substantially breed regional corruption. Moreover, fiscal decentralization is discovered to depress corruption significantly, while administrative decentralization fosters local corruption. We also find that there is currently a positive relationship between corruption and economic development in China that is mainly driven by the transition to a market economy.
    Keywords: Corruption, China, Government, Decentralization, Deterrence, Social Heterogeneity
    JEL: D73 H11 K42
    Date: 2010–06
  14. By: Danila Serra; Pieter Serneels; Abigail Barr
    Abstract: Economists have traditionally assumed that individual behavior is motivated exclusively by extrinsic incentives. Social psychologists, in contrast, stress that intrinsic motivations are also important. In recent work, economic theorists have started to build psychological factors, like intrinsic motivations, into their models. Besley and Ghatak (2005) propose that individuals are differently motivated in that they have different “missions,” and their self-selection into sectors or organizations with matching missions enhances organizational efficiency. We test Besley and Ghatak’s model using data from a unique cohort study. We generate two proxies for intrinsic motivations: a survey-based measure of the health professionals philanthropic motivations and an experimental measure of their pro-social motivations. We find that both proxies predict health professionals’ decision to work in the non-profit sector. We also find that philanthropic health workers employed in the non-profit sector earn lower wages than their colleagues.
    JEL: C93 I11 J24
    Date: 2010
  15. By: Jeffrey Carpenter; Tyler Williams
    Abstract: Given the substantial amount of resources currently invested in microcredit programs, it is more important than ever to accurately assess the extent to which peer monitoring by borrowers faced with group liability contracts actually reduces moral hazard. We conduct a field experiment with women about to enter a group loan program in Paraguay and then gather administrative data on the members' repayment behavior in the six-month period following the experiment. In addition to the experiment which is designed to measure individual propensities to monitor under incentives similar to group liability, we collect a variety of the other potential correlates of borrowing behavior and repayment. Controlling for other factors, we find a very strong causal relationship between the monitoring propensity of one's loan group and repayment. Our lowest estimate suggests that borrowers in groups with above median monitoring are 36 percent less likely to have a problem repaying their portion of the loan. Besides confirming a number of previous results, we also find some evidence that risk preferences, social preferences, and cognitive skills affect repayment.
    Keywords: Loans ; Credit ; Human behavior
    Date: 2010
  16. By: Chiara Cazzuffi; Alexander Moradi
    Abstract: Using a complete panel of Ghanaian cocoa producers’ societies in the 1930s, we investigate whether group interaction problems threatened i) capital accumulation, ii) cocoa sales and iii) cooperative survival as membership size increased. We find evidence of group interaction problems. The net effect, however, is positive indicating gains from economies of scale as cooperatives expanded their membership.
    Keywords: cooperatives, firm survival, collective action problems, Ghana
    JEL: J54 N57 Q13
    Date: 2010
  17. By: Rachel Glennerster; Edward Miguel; Alexander Rothenberg
    Abstract: Scholars have pointed to ethnic and other social divisions as a leading cause of economic underdevelopment, due in part to their adverse effects on public good provision and collective action. We investigate this issue in post-war Sierra Leone, one of the world’s poorest countries. To address concerns over endogenous local ethnic composition, and in an advance over most existing work, we use an instrumental variables strategy relying on historical ethnic diversity data from the 1963 Sierra Leone Census. We find that local ethnic diversity is not associated with worse local public goods provision across a variety of outcomes, regression specifications, and diversity measures, and that these “zeros” are precisely estimated. We investigate the role that two leading mechanisms proposed in the literature – enforcement of collective action by strong local government authorities, and the existence of a common national identity and language – in generating these perhaps surprising findings.
    JEL: H41 O12 O55
    Date: 2010–07
  18. By: Joan Gil; Toni Mora
    Abstract: This paper analyses the extent to which peer influence on adolescent weight differs in a typical southern European country and in the United States, two geographical areas characterised by different economic, socio-cultural and environmental patterns. Our study is based on a survey of secondary school students containing a rich set of personal data and a wide range of school characteristics and parental backgrounds. After accounting for a large set of control factors and controlling for a combination of school- and neighbourhood-specific fixed effects, instrumental variable estimation and alternative definitions of peers, our results support a more powerful positive and significant effect of friends’ mean BMI on adolescent weight than that reported in previous US-based research.
    Date: 2010–06

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