nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2018‒06‒18
twelve papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Trust in State and Non-State Actors: Evidence from Dispute Resolution in Pakistan By Daron Acemoglu; Ali Cheema; Asim I. Khwaja; James A. Robinson
  2. The Political Impact of Immigration: Evidence from the United States By Anna Maria Mayda; Giovanni Peri; Walter Steingress
  3. Political Connections and Firms: Network Dimensions By Bussolo, Maurizio; Commander, Simon; Poupakis, Stavros
  4. The Cultural Divide By Desmet, Klaus; Wacziarg, Romain
  5. Tax Evasion on a Social Network By Duccio Gamannossi degl'Innocenti; Matthew D. Rablen
  6. Social Networks and Informal Financial Inclusion in the People’s Republic of China By Chai, Shijun; Chen, Yang; Huang, Bihong; Ye, Dezhu
  7. Natural Disasters and Demand for Redistribution: Lessons from an Earthquake By Giovanni Gualtieri; Marcella Nicolini; Fabio Sabatini; Luca Zamparelli
  8. Group size and conformity in charitable giving: Evidence from a donation-based crowdfunding platform in Japan By Shusaku Sasaki
  9. Group size effects in social evolution By Nöldeke, Georg; Peña, Jorge
  10. Parental Involvement and the Intergenerational Transmission of Economic Preferences and Attitudes By Maria Zumbuehl; Thomas Dohmen; Gerard Pfann
  11. Bridging the Information Gap between Citizens and Local Governments: Evidence from a Civic Participation Strengthening Program in Rwanda By Ali E. Protik; Ira Nichols-Barrer; Jacqueline Berman; Matt Sloan
  12. The Strength of Gender Norms and Gender-Stereotypical Occupational Aspirations Among Adolescents By Andreas Kuhn; Stefan C. Wolter

  1. By: Daron Acemoglu; Ali Cheema; Asim I. Khwaja; James A. Robinson
    Abstract: Lack of trust in state institutions, often due to poor service provision, is a pervasive problem in many developing countries. If this increases reliance on non-state actors for crucial services, the resulting self-reinforcing cycle can further weaken the state. This paper examines whether such a cycle can be disrupted. We focus on dispute resolution in rural Punjab, Pakistan. We find that providing information about reduced delays in state courts leads to citizens reporting higher willingness to use state courts and to greater fund allocations to the state in two lab-in-the-field games designed to measure trust in state and non-state actors in a high-stakes setting. More interestingly, we find indirect effects on non-state actors. After receiving state positive information, respondents report lower likelihood of using non-state institutions and reduce funds allocated to them in field games. Furthermore, we find similar direct and indirect effects on a battery of questions concerning people’s beliefs about these actors, including a decreased allegiance to the non-state actor. We rationalize these results with a model of motivated reasoning whereby reduced usage of non-state institutions makes people less likely to hold positive views about them. These results indicate that, despite substantial distrust of the state in Pakistan, credible new information can change beliefs and behavior. The feedback loop between state ineffectiveness and the legitimacy of non-state actors may be reversible.
    JEL: C91 C93 D02 D73 D74 D83 K40 O17 P16
    Date: 2018–05
  2. By: Anna Maria Mayda; Giovanni Peri; Walter Steingress
    Abstract: In this paper we study the impact of immigration to the United States on the vote for the Republican Party by analyzing county-level data on election outcomes between 1990 and 2010. Our main contribution is to separate the effect of high-skilled and low-skilled immigrants, by exploiting the different geography and timing of the inflows of these two groups of immigrants. We find that an increase in the first type of immigrants decreases the share of the Republican vote, while an inflow of the second type increases it. These effects are mainly due to the local impact of immigrants on votes of U.S. citizens and they seem independent of the country of origin of immigrants. We also find that the pro-Republican impact of low-skilled immigrants is stronger in low-skilled and non-urban counties. This is consistent with citizens' political preferences shifting towards the Republican Party in places where low-skilled immigrants are more likely to be perceived as competition in the labor market and for public resources.
    JEL: F22 J61
    Date: 2018–04
  3. By: Bussolo, Maurizio (World Bank); Commander, Simon (IE Business School, Altura Partners); Poupakis, Stavros (University College London)
    Abstract: Business and politician interaction is pervasive but has mostly been analysed with a binary approach. Yet the network dimensions of such connections are ubiquitous. We use a unique dataset for seven economies that documents politically exposed persons (PEPs) and their links to companies, political parties and other individuals. With this dataset, we can identify networks of connections, including their scale and composition. We find that all country networks are integrated having a Big Island. They also tend to be marked by small-world properties of high clustering and short path length. Matching our data to firm level information, we examine the association between being connected and firm-level attributes. The originality of our analysis is to identify how location in a network, including extent of ties and centrality, are correlated with firm scale and performance. In a binary approach such network characteristics are omitted and the scale and economic impact of politically connected business may be significantly mis/under-estimated. By comparing results of the binary approach with our network approach, we can also assess the biases that result from ignoring network attributes.
    Keywords: connections: PEPs, networks, rents
    JEL: L14 L53 P26
    Date: 2018–04
  4. By: Desmet, Klaus; Wacziarg, Romain
    Abstract: This paper conducts a systematic quantitative study of cultural convergence and divergence in the United States over time. Using the General Social Survey (1972-2016), we assess whether cultural values have grown more or less heterogeneous, both overall and between groups. Groups are defined according to 11 identity cleavages such as gender, religion, ethnic origin, family income quintiles, geographic region, education levels, etc. We find some evidence of greater overall heterogeneity after 1993 when averaging over all available values, yet on many issues heterogeneity changes little. The level of between-group heterogeneity is extremely small: the United States is very pluralistic in terms of cultural attitudes and values, but this diversity is not primarily the result of cultural divides between groups. On average across cleavages and values, we find evidence of falling between-group heterogeneity from 1972 to the late 1990s, and growing divides thereafter. We interpret these findings in light of a model of cultural change where intergenerational transmission and forces of social influence determine the distribution of cultural traits in society.
    Keywords: between-group heterogeneity; cultural convergence; cultural divide; Cultural Evolution; cultural heterogeneity; General Social Survey; United States
    JEL: D70 Z1
    Date: 2018–05
  5. By: Duccio Gamannossi degl'Innocenti; Matthew D. Rablen
    Abstract: We relate tax evasion behavior to a substantial literature on self and social comparison in judgements. Tax payers engage in tax evasion as a means to boost their expected consumption relative to others in their “local” social network, and relative to past consumption. The unique Nash equilibrium of the model relates optimal evasion to a (Bonacich) measure of network centrality: more central taxpayers evade more. The indirect revenue effects from auditing are shown to be ordinally equivalent to a related Bonacich centrality. We generate networks corresponding closely to the observed structure of social networks observed empirically. In particular, our networks contain celebrity taxpayers, whose consumption is widely observed, and who are systematically of higher wealth. In this context we show that, if the tax authority can observe the social network, it is able to raise its audit revenue by around six percent.
    Keywords: tax evasion, social networks, network centrality, optimal auditing, social comparison, self comparison, habit, indirect effects, relative consumption
    JEL: H26 D85 K42
    Date: 2018
  6. By: Chai, Shijun (Asian Development Bank Institute); Chen, Yang (Asian Development Bank Institute); Huang, Bihong (Asian Development Bank Institute); Ye, Dezhu (Asian Development Bank Institute)
    Abstract: Using the 2011 China Household Finance Survey (CHFS) database, we explore the heterogeneous impacts of social networks on informal financial inclusion for urban and rural households in the People’s Republic of China. We find that social networks significantly increase the probability of households’ participation in the informal financial market, augment the size of informal financial transactions, and raise the ratio of informal lending to total household assets. We also identify the mechanisms through which social networks affect households’ participation in the informal financial market. By reducing the information cost, perceived risk, and precautionary saving, social networks play a larger role for urban households than for rural households. Notably, the effects of social networks on informal finance are strengthened by the development of the formal financial market.
    Keywords: social networks; informal financial inclusion; perceived risk; precautionary saving; formal financial market
    JEL: D10 G20
    Date: 2018–01–29
  7. By: Giovanni Gualtieri (National Research Council, Institute of Biometeorology); Marcella Nicolini (University of Pavia, Department of Economics); Fabio Sabatini (Sapienza University of Rome, Department of Economics and Law); Luca Zamparelli (Sapienza University of Rome, Department of Economics and Law)
    Abstract: The literature shows that when a society believes that wealth is determined by random “luck” rather than by merit, it demands more redistribution. Adverse shocks, like earthquakes, strengthen the belief that random “bad luck” can frustrate the outcomes achieved with merit. We theoretically illustrate that individuals react to such shocks by raising support for redistribution. We then present evidence of this behavior by exploiting a natural experiment provided by one of the strongest seismic events that occurred in Italy in the last three decades, the L’Aquila earthquake in 2009. We assemble a novel dataset by matching information on the ground acceleration registered throughout the National Strong Motion Network during the earthquake with survey data about individual opinions on redistribution collected a few months later. The empirical analysis illustrates that the intensity of the shakes is associated with subsequent stronger beliefs that, for a society to be fair, income inequalities should be levelled by redistribution.
    Keywords: Fairness, Redistribution, Inequality, Natural Disasters, Earthquakes
    JEL: H10 H53 D63 D69 Z1
    Date: 2018–05
  8. By: Shusaku Sasaki
    Abstract: A charitable donor typically imitates the majority contribution of other donors. This study examines the relationships between majority size and this so-called donor’s conformity behavior, by empirically investigating the impacts of multiple earlier donations on the donation of a subsequent donor to JapanGiving, a donation-based crowdfunding platform in Japan. This analysis is possible because the platform’s webpage displays the previous donation amounts in chronological order, thus allowing us to examine the modal amount of more recent donations. By using data on 9,989 actual donations, our dynamic panel analyses suggest that when the two most recent donations are identical, a subsequent donor is likely to match the last donation. In other words, when the last donor imitates the donation of the penultimate donor, the subsequent donor is also likely to imitate this amount. Additionally, the likelihood increases when the number of most recent continuous modal donations increases. These results support the notion that a donor’s conformity behavior is more likely to occur when a greater proportion of the other donors give a similar amount. Furthermore, the effects of continuous modal donations are strongly observed for low monetary ranges. We discuss that individuals would obtain an excuse for less cooperation due to others’ behaviors or initiating further cooperation among a large number of less cooperative others would become harder. Our findings connect economic studies of charity and social psychology studies of conformity and could help improve the effectiveness of fundraising by charities.
    Date: 2017–05
  9. By: Nöldeke, Georg; Peña, Jorge
    Abstract: How the size of social groups affects the evolution of cooperative behaviors is a classic question in evolutionary biology. Here we investigate group size effects in evolutionary games in which individuals choose whether to cooperate or defect. We find that increasing the group size decreases the proportion of cooperators at both stable and unstable rest points of the replicator dynamics. This implies that larger group sizes can have negative effects (by reducing the amount of cooperation at stable polymorphisms) and positive effects (by enlarging the basin of attraction of more cooperative outcomes) on the evolution of cooperation. These two effects can be simultaneously present in games whose evolutionary dynamics features both stable and unstable rest points, such as public goods games with participation thresholds. Our theory recovers and generalizes previous results and is applicable to a broad variety of social interactions that have been studied in the literature.
    Keywords: evolution of cooperation; evolutionary game theory; replicator dynamics; public goods games
    JEL: C73 H41
    Date: 2018–05
  10. By: Maria Zumbuehl; Thomas Dohmen; Gerard Pfann
    Abstract: We empirically investigate the link between parental involvement and shaping of the economic preferences and attitudes of their children. We exploit information on the risk and trust attitudes of parents and their children, as well as rich information about parental efforts in the upbringing of their children from the German Socio-Economic Panel Study. Our results show that parents who are more involved in the upbringing of their children are more similar to them with respect to risk and trust attitudes and thus transmit their own attitudes more strongly.
    Keywords: Intergenerational transmission, Parental involvement, Preference formation, Risk preference, Trust attitude, Personality, SOEP
    JEL: D10 D90 J13 J62
    Date: 2018–06
  11. By: Ali E. Protik; Ira Nichols-Barrer; Jacqueline Berman; Matt Sloan
    Abstract: This paper evaluates a program sponsored by the Millennium Challenge Corporation to promote civic participation in local governance in Rwanda.
    Keywords: Governance, Democracy, Information, Civic participation
    JEL: F Z
  12. By: Andreas Kuhn (Swiss Federal Institute for Vocational Education and Training); Stefan C. Wolter (University of Bern, Swiss Coordination Centre for Research in Education, CESifo & IZA)
    Abstract: We test the hypothesis that adolescents' occupational aspirations are more gender-stereo-typical if they live in regions where the norm towards gender equality is weaker. For our empirical analysis, we combine rich survey data describing a sample of 1,434 Swiss adolescents in 8th grade with communal voting results dealing with gender equality and policy. We use the voting results to measure spatial variation in the local norm towards (more) gender equality. We find that adolescents living in localities with a stronger norm towards gender equality are significantly and substantively less likely to aspire for a gender-stereotypical occupation. This correlation may reflect different underlying mechanisms, however, and a more detailed analysis in fact reveals that the association between gender norms and occupational aspirations mainly reflects the intergenerational transmission of occupations from parents to their children.
    Keywords: occupational choice, occupational segregation, gender gap, gender norms, preferences, socialization, intergenerational transmission
    JEL: J16 J24
    Date: 2018–06

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