nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2014‒07‒13
seventeen papers chosen by
Fabio Sabatini
La Sapienza University of Rome

  1. Trust and the Welfare State: The Twin Peaks Curve By Algan, Yann; Cahuc, Pierre; Sangnier, Marc
  2. Social norms on rent seeking and preferences for redistribution By Sabatini, Fabio; Sarracino, Francesco; Yamamura, Eiji
  3. Growth Strategy with Social Capital and Physical Capital- Theory and Evidence: the Case of Vietnam. By Cuong Le Van; Anh-Ngoc Nguyen; Ngoc-Minh Nguyen
  4. Parenting with style: altruism and paternalism in intergenerational preference transmission By Matthias Doepke; Fabrizio Zilibotti
  5. Bowling for fascism: social capital and the rise of the Nazi Party By Shanker Satyanath; Nico Voigtländer; Hans-Joachim Voth
  6. The impact of bridging and bonding social capital on individual earnings: Evidence for an inverted U By Jakub Growiec; Katarzyna Growiec
  7. Employee Trust and Workplace Performance By Brown, Sarah; Gray, Daniel; McHardy, Jolian; Taylor, Karl
  8. Superstars in politics: the role of the media in the rise and success of Junichiro Koizumi By Yamamura, Eiji; Sabatini, Fabio
  9. How Variability in Individual Patterns of Behavior Changes the Structural Properties of Networks By Somayeh Koohborfardhaghighi; Jorn Altmann
  10. In 'Trusts' We Trust: Socially Motivated Private Schools in Nepal By Pal, Sarmistha; Saha, Bibhas
  11. Social norms, morals and self-interest as determinants of pro-environment behaviour By Mikołaj Czajkowski; Nick Hanley; Karine Nyborg
  12. On Self-Interest and Greed By Kirchgässner, Gebhard
  13. Social structure bureaucracy and corruptionA By Jellal, Mohamed
  14. Culture values and economic growth By Jellal, Mohamed
  15. The Effect of Conflict History on Cooperation Within and Between Groups: Evidence from a Laboratory Experiment By Beekman, Gonne; Cheung, Stephen L.; Levely, Ian
  16. Corruption, Tax Evasion and Social Values By Anastasia Litinia; Theodore Palivos
  17. Family ties: occupational responses to cope with a household income shock By Massimo Baldini; Costanza Torricelli; Maria Cesira Urzì Brancati

  1. By: Algan, Yann (Sciences Po, Paris); Cahuc, Pierre (Ecole Polytechnique, Paris); Sangnier, Marc (University of Aix-Marseille II)
    Abstract: We show the existence of a twin peaks relation between trust and the size of the welfare state that stems from two opposing forces. Uncivic people support large welfare states because they expect to benefit from them without bearing their costs. But civic individuals support generous benefits and high taxes only when they are surrounded by trustworthy individuals. We provide empirical evidence for these behaviors and this twin peaks relation in the OECD countries.
    Keywords: welfare state, trust, civism, corruption, redistribution
    JEL: H1 Z1
    Date: 2014–06
  2. By: Sabatini, Fabio; Sarracino, Francesco; Yamamura, Eiji
    Abstract: Empirical studies have shown that preferences for redistribution are significantly correlated with expectations of future mobility and the belief that society offers equal opportunities. We add to previous research by investigating the role of individual and social norms on rent seeking. We find that the individual propensity for stigmatizing rent seeking significantly and positively affects preferences for redistribution. On the other hand, living in an area where most citizens do not stigmatize rent seeking, makes men more favourable to redistribution, which may be seen as a social equalizer in an unfair society that does not offer equal opportunities to all. This effect does not hold for women, whose preference for redistribution is negatively associated to the regional tolerance of rent seeking. --
    Keywords: redistribution,welfare state,civic values,social norms,rent seeking,social capital
    JEL: D31 D63 D64 D72 H26 Z13
    Date: 2014
  3. By: Cuong Le Van (Centre d'Economie de la Sorbonne - Paris School of Economics, IPAG and VCREME); Anh-Ngoc Nguyen (Development and Policies Research Center (DEPOCEN) - Vietnam); Ngoc-Minh Nguyen (Development and Policies Research Center (DEPOCEN) - Vietnam)
    Abstract: We study the impact of social capital in both simple theoretical and empirical model with the main assumption is the price of physical capital is a decreasing function of social capital. In our theoretical model, there exists a critical value such that firm will not invest in social capital if its saving is lower than the critical value and otherwise. Moreover, the output depends positively and non-linearly on the social capital. Our empirical model that captures the impact of physical capital, human capital, and social capital using the database from Survey of Small and Medium Scale Manufacturing Enterprises (SMEs) in Vietnam 2011, confirms the conclusions of the theoretical model.
    Keywords: Social Capital, Optimal Growth.
    JEL: Z1 E2 O00
    Date: 2014–02
  4. By: Matthias Doepke; Fabrizio Zilibotti
    Abstract: We develop a theory of intergenerational transmission of preferences that rationalizes the choice between alternative parenting styles (as set out in Baumrind 1967). Parents maximize an objective function that combines Beckerian altruism and paternalism towards children. They can affect their children’s choices via two channels: either by influencing children’s preferences or by imposing direct restrictions on their choice sets. Different parenting styles (authoritarian, authoritative, and permissive) emerge as equilibrium outcomes, and are affected both by parental preferences and by the socioeconomic environment. Parenting style, in turn, feeds back into the children’s welfare and economic success. The theory is consistent with the decline of authoritarian parenting observed in industrialized countries, and with the greater prevalence of more permissive parenting in countries characterized by low inequality.
    Keywords: Intergenerational preference transmission, altruism, paternalism, entrepreneurship, innovation
    JEL: D10 J10 O10 O40
    Date: 2014–06
  5. By: Shanker Satyanath; Nico Voigtländer; Hans-Joachim Voth
    Abstract: Social capital is often associated with desirable political and economic outcomes. This paper connects a growing literature on the “dark side” of social capital with institutional change. We examine the downfall of democracy in interwar Germany. Using new data on Nazi Party entry in a cross-section of cities, we show that dense networks of civic associations such as bowling clubs, choirs, and animal breeders went hand-in-hand with a more rapid rise of the Nazi Party. Towns with one standard deviation higher association density saw at least one-third faster entry. All types of associations – veteran associations and non-military clubs, “bridging” and “bonding” associations – positively predict NS Party entry. Party membership, in turn, predicts electoral success. These results suggest that social capital aided the rise of the Nazi movement that ultimately destroyed Germany’s first democracy. We also show that the effects of social capital were more important in the starting phase of the Nazi movement, and in towns less sympathetic to its message.
    Keywords: Social capital, democracy, institutions, associations, networks
    JEL: N44 P16 Z10
    Date: 2014–06
  6. By: Jakub Growiec (Narodowy Bank Polski; Warsaw School of Economics); Katarzyna Growiec (University of Social Sciences and Humanities)
    Abstract: Based on data on a cross section of individuals surveyed in the 1999-2002 wave of World and European Values Surveys, we investigate the extent to which bridging and bonding social capital as well as social trust interdependently affect individuals’ earnings. Our analysis provides robust evidence that the impact of bridging social capital on earnings is inverted-U shaped whereas the impact of bonding social capital is unambiguously negative and approximately linear. It is carefully ascertained that neither of these results is driven by regressor endogeneity or omitted variables bias. We also identify significant interaction effects between social capital, trust, and employment status.
    Keywords: bridging social capital, bonding social capital, social trust, earnings, nonlinearity
    JEL: J24 J31 Z13
    Date: 2014
  7. By: Brown, Sarah (University of Sheffield); Gray, Daniel (University of Sheffield); McHardy, Jolian (University of Sheffield); Taylor, Karl (University of Sheffield)
    Abstract: We explore the relationship between employee trust of managers and workplace performance. We present a theoretical framework which serves to establish a link between employee trust and firm performance as well as to identify possible mechanisms through which the relationship may operate. We then analyse matched workplace and employee data in order to ascertain whether the average level of employee trust within the workplace influences workplace performance. We exploit the 2004 and 2011 Work Place and Employee Relations Surveys (WERS) to analyse the role of employee trust in influencing workplace performance in both pre and post recessionary periods. Our empirical findings support a positive relationship between three measures of workplace performance (financial performance, labour productivity and product or service quality) and employee trust at both points in time. We then exploit employee level data from the WERS to ascertain the determinants of employee trust as well as how trust is influenced by measures taken by employers to deal with the recent recession. Our findings suggest that restricting paid overtime and access to training potentially erode employee trust. In addition, we find that job or work reorganisation experienced at either the employee or organisation level are associated with lower employee trust.
    Keywords: employee trust, financial performance, labour productivity, product quality
    JEL: J20 J50
    Date: 2014–06
  8. By: Yamamura, Eiji; Sabatini, Fabio
    Abstract: This paper explores the role of mass media in people’s perceptions of charismatic leaders, focusing on the case of Junichiro Koizumi, Prime Minister of Japan from 2001 to 2006. Using survey data collected immediately after Koizumi’s 2005 landslide electoral victory, this study empirically assesses the influence of television (TV) and newspapers on individuals’ support for Koizumi and for the most distinctive policy action he announced during his campaign—the privatization of the postal service. The major findings are: (1) the frequency of exposure to mass media is positively related to the support for Koizumi but not for his principal policy and (2) a significant impact of TV is only observed among women. The habit of reading newspapers only slightly correlates with men’s support for Koizumi.. Our study’s results suggest that compared to a political platform, charisma and attractiveness wield a greater influence on TV watchers of the opposite sex. Television apparently works as a powerful amplifier of leaders’ appealing attributes. The resulting superstar effect may allow a charismatic candidate to win an election, even though his main agenda item (i.e., postal privatization) is strongly opposed by special interest groups and members of the ruling party. --
    Keywords: mass media,television,newspapers,election,Koizumi,Japan,voting behavior,social norms,social capital,superstar effect
    JEL: D72 L88 L82 Z13
    Date: 2014
  9. By: Somayeh Koohborfardhaghighi (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University); Jorn Altmann (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University)
    Abstract: Dynamic processes in complex networks have received much attention. This attention reflects the fact that dynamic processes are the main source of changes in the structural properties of complex networks (e.g., clustering coefficient and average shortest-path length). In this paper, we develop an agent-based model to capture, compare, and explain the structural changes within a growing social network with respect to individuals’ social characteristics (e.g., their activities for expanding social relations beyond their social circles). According to our simulation results, the probability increases that the network’s average shortest-path length is between 3 and 4, if most of the dynamic processes are based on random link formations. That means, in Facebook, the existing average shortest path length of 4.7 can even shrink to smaller values. Another result is that, if the node increase is larger than the link increase when the network is formed, the probability increases that the average shortest-path length is between 4 and 8.
    Keywords: Network Properties, Network Growth Models, Small World Theory, Network Science, Simulation, Clustering Coefficient, Complex Networks.
    JEL: C02 C6 C15 D85
    Date: 2014–06
  10. By: Pal, Sarmistha (University of Surrey); Saha, Bibhas (University of East Anglia)
    Abstract: We study school choice and school efficiency in terms of secondary school completion test scores by utilizing a unique database from Nepal. There are two novel features of our analysis: firstly we allow for heterogeneity among private schools, by distinguishing socially motivated trust-run schools from profit-motivated company-run schools, and secondly, we include school's expenditure as a determinant of its efficiency per unit of cost. We find that when expenditure is not included, the trust-run school comes on top, slightly but distinctly, ahead of the profit-motivated school. But if expenditure is included, the trust-run school's position becomes sensitive to the level of expenditure, as it is the only school to exhibit sensitivity between expenditure and test score. In the urban area, the public school is always at the bottom, and between the two types of the private school the trust-run school ranks first (second) at high (low) levels of expenditure. However, in the rural area it is a three way race, with the trust school coming on top again at high expenditure, but falling to bottom at low levels of expenditure. This picture is fairly robust to considerations of subject fixed effects and to inclusion or exclusion of private aided schools or private tuition. We show both theoretically and empirically that socially motivated schools can be efficient and outperform profit-motivated schools.
    Keywords: private school heterogeneity, school expenditure per student, efficiency, private school premium, social objectives, private motive, rural-urban dichotomy, Nepal
    JEL: H44 I22
    Date: 2014–06
  11. By: Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Nick Hanley (School of Geography and Sustainable Development, University of St Andrews); Karine Nyborg (Department of Economics, University of Oslo)
    Abstract: This paper considers the role which selfish, moral and social incentives and pressures play in explaining the extent to which stated choices over pro-environment behaviours vary across individuals. The empirical context is choices over household waste contracts and recycling actions in Poland. A theoretical model is used to show how cost-based motives and the desire for a positive self- and social image combine to determine the utility from alternative choices of recycling behaviour. We then describe a discrete choice experiment designed to empirically investigate the effects such drivers have on stated choices. Using a latent class model, we distinguish three types of individual who are described as duty-orientated recyclers, budget recyclers and homo oeconomicus. These groups vary in their preferences for how frequently waste is collected, and the number of categories into which household waste must be recycled. Our results have implications for the design of future policies aimed at improving participation in recycling schemes.
    Keywords: recycling, motives of pro-environment behaviour, social norms, discrete choice experiment
    JEL: Q51 Q53 D01 D03
    Date: 2014
  12. By: Kirchgässner, Gebhard
    Abstract: First the assumption of self-interest as applied in Economics is presented. Here we also discuss areas in which (many) people behave less self- but more other-regarding than traditional economic models assume. Then, greedy behaviour is considered as existing in the political and economic ‘world’. Here we refer to corruption as well as to the role of money as a positional good. We also discuss such behaviour in the academic world, in which money plays a role as well as reputation. Thus, while the assumption of mutually disinterested rationality is a very powerful instrument for analysing individual behaviour, to explain some phenomena we have to recognise that people are not only sometimes other-regarding, but also sometimes greedy, and that they might value money much more than traditional Economics assumes. We conclude with some remarks on what we can learn in this respect from Behavioural Economics.
    Keywords: Economic Model of Behaviour, Self-Interest, Altruism, Greed, Corruption
    JEL: B41
    Date: 2014–06
  13. By: Jellal, Mohamed
    Abstract: Using the principal-agent- supervisor paradigm, this paper examines the occurrence of collusion in a setting where the principal has no information about the supervisor and the agent does not necessarily know the supervisor’s preferences. We formally prove the occurrence of collusion is more likely when the agent has information about the preferences of the supervisor. This result suggests that corruption, which is likely to emerge in long term social reciprocal relationships between public officials and potential bribery may be reduced by the means of bureaucratic staff rotation. Evidence from an experimental study supports this proposition and our theoretical finding.
    Keywords: Principal-agent-supervisor, collusion, staff rotation, social structure
    JEL: A13 D82 K42
    Date: 2014–07–06
  14. By: Jellal, Mohamed
    Abstract: We integrate a general social norm function which associates status to accumulation of capital and consumption into a very simple model of endogenous growth. We show that societies which place a greater cultural weight on capital as opposed to consumption preferences will experience fast growth. Our results are consistent with those obtained by Baumol(1990) in the context of entrepreneurship and by Fershtman and Weiss (1991).
    Keywords: Cultural incentives, social status, endogenous growth
    JEL: A13 O1 O43 Z13
    Date: 2014–07–04
  15. By: Beekman, Gonne (Wageningen University); Cheung, Stephen L. (University of Sydney); Levely, Ian (Charles University, Prague)
    Abstract: We study cooperation within and between groups in the laboratory, comparing treatments in which two groups have previously been (i) in conflict with one another, (ii) in conflict with a different group, or (iii) not previously exposed to conflict. We model conflict using an inter-group Tullock contest, and measure its effects upon cooperation using a multi-level public good game. We demonstrate that conflict increases cooperation within groups, while decreasing cooperation between groups. Moreover, we find that cooperation between groups increases in response to an increase in the efficiency gains from cooperation only when the two groups have not previously interacted.
    Keywords: within- and between-group cooperation, inter-group conflict, group identity, multi-level public good experiment, Tullock contest, other-regarding preferences
    JEL: C92 D64 D74 H41
    Date: 2014–06
  16. By: Anastasia Litinia (CREA, Université de Luxembourg); Theodore Palivos (Athens University of Economics and Business)
    Abstract: We provide empirical support and a theoretical explanation for the vicious circle of political corruption and tax evasion in which countries often fall into. We address this issue in the context of a model with two distinct groups of agents: citizens and politicians. Citizens decide the fraction of their income for which they evade taxes. Politicians decide the fraction of the public budget that they speculate. We show that multiple self-fulfilling equilibria with different levels of corruption can emerge based on the existence of strategic complementarities, indicating that corruption may corrupt. Furthermore, we find that standard deterrence policies cannot elimi- nate multiplicity. Instead, we find that impose a strong moral cost on tax evaders and corrupt politicians can lead to a unique equilibirum.
    Keywords: Corruption, Tax Evasion, Mutiple Equilibria, Stigma
    JEL: D73 E62 H26
    Date: 2014
  17. By: Massimo Baldini; Costanza Torricelli; Maria Cesira Urzì Brancati
    Abstract: In this paper we analyse household members’ reactions in case of unforeseen negative income shocks due to a transition into unemployment and/or into income support. More specifically, we estimate the impact of an income loss suffered by one household member on the probability that another household member – not necessarily the wife - transit from out of the labour force into employment or into workforce. Since in a lifecycle setting the labour supply of secondary workers is also affected by credit constraints, we take into account financial wealth and liabilities as well as a measure of household illiquidity due to housing. To perform our analyses, we use a discrete choice model and data drawn from the Bank of Italy Survey on Household Income and Wealth (SHIW) over the period 2004-2012, so as to include the effects of the Great Recession. Even after accounting for standard socio-economic controls, results show significant reactions to income shocks, especially during the recession. As for portfolio controls, we find a significant difference (mostly in terms of intercept, but also of slope) between the level of illiquidity and labour market participation for households hit/not hit by a shock.
    Keywords: household labour decisions; household portfolios; discrete-choice models
    JEL: D12 D14 J22 C25
    Date: 2014–04

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