nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2023‒01‒02
eleven papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Trust as state capacity: The political economy of compliance By Timothy Besley; Sacha Dray
  2. A Tale of Government Spending Efficiency and Trust in the State By António Afonso; João Tovar Jalles; Ana Venâncio
  3. A fiscal approach to the social contract in sub-Saharan African countries: Looking for opportunities to strengthen trust in government and tax compliance by analysing citizens' perception of governance By Enrico Nichelatti; Heikki Hiilamo
  4. Trust, guilds and kinship in London, 1330-1680 By Adam, Ammaarah; Ades, Raphael; Banks, William; Benning, Canbeck; Grant, Gwyneth; Forster-Brass, Harry; McGiveron, Owen; Miller, Joe; Phelan, Daniel; Randazzo, Sebastian; Reilly, Matthew; Scott, Michael; Serban, Sebastian; Stockton, Carys; Wallis, Patrick
  5. The Good of Rules: An experimental study on prosocial behavior By Caserta, Maurizio; Distefano, Rosaria; Ferrante, Livio
  6. Influencing public trust in central banks: Identifying who is open to new information By Bernd Hayo; Pierre-Guillaume Méon
  7. Financial Impact of Trust and Institutional Quality around the World By Svatopluk Kapounek; Evzen Kocenda; Ludek Kouba
  8. Trusted Institutions and Policy Compliance: Evidence from COVID-19 Mobility Patterns in Korea. By Hee-Seung Yang; Sungjin Kim
  9. Revenge of the experts: will COVID-19 renew or diminish public trust in science? By Eichengreen, Barry; Aksoy, Cevat Giray; Saka, Orkun
  10. Honesty in the City By Martin Dufwenberg; Paul Feldman; Maros Servatka; Jorge Tarraso; Radovan Vadovic
  11. Playing the victim behavior: An experimental study By AKIN, ZAFER

  1. By: Timothy Besley; Sacha Dray
    Abstract: This paper explores the link between trust in government, policy-making, and compliance. It focuses on a specific channel whereby citizens who are convinced that a policy is worthwhile are more motivated to comply with it. This in turn reduces the government's cost of implementing a policy and may also increase the set of feasible policies. Thus, state capacity is greater when citizens trust their government. The paper discusses alternative approaches to modelling the origins of trust, especially the link to the design of political institutions.
    Keywords: State capacity, Trust, Compliance, Political economy, Policy
    Date: 2022
  2. By: António Afonso; João Tovar Jalles; Ana Venâncio
    Abstract: This paper empirically links the efficiency and performance assessment of the general government, proxied by efficiency scores, to the trust in government. Government spending efficiency scores are first computed via data envelopment analysis (DEA). Then, relying on panel data and instrumental variable approaches, we estimate the effect of public sector efficiency on citizens trust on national governments. The sample covers 36 OECD countries between 2007 and 2019. We find that the more efficient countries in terms of government spending are Australia, Chile, Ireland, New Zealand, South Korea, Switzerland. Secondly, our main finding is that better public sector spending efficiency is positively associated with citizens’ higher trust in governments. In general, political economy variables and the existence of fiscal rules do not seem to significantly affect our measure of trust. Results were held using alternative proxies for public sector efficiency, specifications with different control variables and instrumental variables approaches.
    Keywords: government spending efficiency, DEA, panel data analysis, confidence effects, ideology, fiscal rules
    JEL: C14 C23 E44 G15 H11 H50
    Date: 2022
  3. By: Enrico Nichelatti; Heikki Hiilamo
    Abstract: The COVID-19 pandemic showed that many developing countries could not respond effectively to crises due to their limited capacity to diversify their social protection responses. Social protection systems depend mainly on government tax revenue capacity. Raising domestic revenue still represents a priority for most sub-Saharan African countries, which continue to face high tax non-compliance. This research investigates whether there is a link between citizens' perceptions of governance and individual tax compliance in sub-Saharan Africa.
    Keywords: Tax compliance, Governance, Sub-Saharan Africa, Tax revenue, Regression analysis, Mediation analysis
    Date: 2022
  4. By: Adam, Ammaarah; Ades, Raphael; Banks, William; Benning, Canbeck; Grant, Gwyneth; Forster-Brass, Harry; McGiveron, Owen; Miller, Joe; Phelan, Daniel; Randazzo, Sebastian; Reilly, Matthew; Scott, Michael; Serban, Sebastian; Stockton, Carys; Wallis, Patrick
    Abstract: How was trust created and reinforced between the inhabitants of medieval and early modern cities? And how did the social foundations of trusting relationships change over time? Current research highlights the role of kinship, neighbourhood and associations, particularly guilds, in creating ‘relationships of trust’ and social capital in the face of high levels of migration, mortality and economic volatility, but tells us little about their relative importance or how they developed. We uncover a profound shift in the contribution of family and guilds to trust networks among the middling and elite of one of Europe’s major cities, London, over three centuries, from the 1330s to the 1680s. We examine the networks of sureties created to secure the inheritances of children whose fathers died while they were minors, surviving in the records of London’s Orphans Court. Our analysis of almost fifteen thousand networks evaluates the presence of trusting relationships connected with guild membership, family and place over several centuries. We show a profound increase in the role of kinship – a re-embedding of trust within the family - and a decline of the importance of shared guild membership in connecting Londoner’s who secured orphans’ inheritances together. We suggest these developments are best explained as a result of the impact of the Reformation on the form and intensity of sociability fostered by guilds and the enormous growth of the metropolis.
    Keywords: orphans; networks; trust; credit; London; guilds; kinship; reformation; early-modern
    JEL: N20 N13 N33 N93 Z13
    Date: 2022–11–01
  5. By: Caserta, Maurizio; Distefano, Rosaria; Ferrante, Livio
    Abstract: In everyday life, individuals interact with relatives, friends and colleagues, share ideas and passions and cooperate with others to pursue common goals. Within each social domain, individuals recognize themselves as a group member with rights and duties to observe. Understanding the importance of social norms and encouraging mutually beneficial cooperation is crucial for societal and economic development. This paper presents an experimental study of an educational program for early adolescents of 11 years old from South Italy. The program introduces participants to institutions, civic engagement, sense of duty, and decision-making. Among other didactic activities, it includes guided tours and a role-taking game. Our results suggest that the program attendance positively affects cooperation in a one-shot Prisoner’s Dilemma and altruistic behavior in a Dictator Game. Our findings contribute to the nature-nurture debate, showing that promoting prosocial behavior can be effective in pursing the common good.
    Keywords: Experimental game theory; Group Decision Making; Cooperation; Prisoner’s Dilemma; Dictator Game.
    JEL: C72 C93 I20
    Date: 2022–02–07
  6. By: Bernd Hayo (Philipps-Universitaet Marburg); Pierre-Guillaume Méon (Université libre de Bruxelles (U.L.B.))
    Abstract: Using a randomized controlled trial in a 2018 survey of a representative sample of the German population, we study whether providing information about the European Central Bank’s (ECB) inflation record in comparison to its inflation target affects people’s trust in the central bank. In the treatment, administered to half of the roughly 2000 respondents, a graph of the annual inflation rate in the euro area from 1999 to 2017 and the ECB’s 2% inflation target was shown to respondents. We find that the treatment has, on average, no significant effect on the level of trust respondents have in the ECB or on the distribution of survey answers. However, the treatment increases trust in the ECB among respondents who report no preference for any political party. Within this group, the effect is strongest among those who reported biased beliefs about the inflation rate but knew that price stability is the ECB’s objective and those who reported a low level of subjective and objective knowledge about monetary policy.
    Keywords: Central bank trust, European Central Bank, Central bank communication, Monetary policy, Germany, Household survey, RCT.
    JEL: E52 E58 Z1
    Date: 2022
  7. By: Svatopluk Kapounek (Mendel University in Brno, Faculty of Business and Economics, Czech Republic); Evzen Kocenda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Ludek Kouba (Mendel University in Brno, Faculty of Business and Economics, Czech Republic)
    Abstract: We investigate the financial impact of social trust, institutional quality, and regulations. As a testing ground we employ a unique, large, and hand-crafted dataset of more than 850 000 lending-based crowdfunding projects from 155 platforms across 55 countries during 2005-2018. We show that the impact of social trust is positive but economically less pronounced than that of institutional trust proxied by legal and property rights protection and regulation. Moreover, the financial impact of social trust is greater at the national level, while impact of institutional quality dominates at the international level. Nevertheless, the financial impact of trust and institutional quality around the world is positive, which is an encouraging implication under increasing anonymity and internationalization of financial environment.
    Keywords: social capital, social trust, institutional trust, uncertainty, crowdfunding, financial markets
    JEL: A13 D23 G41 K11
    Date: 2022–12
  8. By: Hee-Seung Yang (Yonsei University); Sungjin Kim (Yonsei University)
    Abstract: This study examines the role of trusted institutions and political orientation in people’s tendency to comply with COVID-19-related preventive measures. Using data on public transportation mobility and political orientation in the Seoul metropolitan area, we show that political messages on quarantine success downplayed the severity of the virus and, thus, hindered policy compliance during the major waves of COVID-19 in 2020 – 2021. Individuals with high institutional trust align their mobility behavior with the government’s messaging, feeling safe and engaging more in social activities. Additional channels come from the area’s occupation and industry classifications, mainly through remote work availability.
    Keywords: political orientation; political message; mobility; social distancing; policy compliance; COVID-19.
    JEL: I18 O18 J08 R11 D72
    Date: 2022–11
  9. By: Eichengreen, Barry; Aksoy, Cevat Giray; Saka, Orkun
    Abstract: It is sometimes said that an effect of the COVID-19 pandemic will be heightened appreciation of the importance of scientific research and expertise. We test this hypothesis by examining how exposure to previous epidemics affected trust in science and scientists. Building on the “impressionable years hypothesis” that attitudes are durably formed during the ages 18–25, we focus on individuals exposed to epidemics in their country of residence at this particular stage of the life course. Combining data from a 2018 Wellcome Trust survey of more than 75,000 individuals in 138 countries with data on global epidemics since 1970, we show that such exposure has no impact on views of science as an endeavor but that it significantly reduces trust in scientists and in the benefits of their work. We also illustrate that the decline in trust is driven by the individuals with little previous training in science subjects. Finally, our evidence suggests that epidemic-induced distrust translates into lower compliance with health-related policies in the form of negative views towards vaccines and lower rates of child vaccination.
    Keywords: epidemics; impressionable years; scientists; trust; coronavirus; Covid-19
    JEL: D83 F50 I19
    Date: 2021–01–01
  10. By: Martin Dufwenberg (University of Arizona); Paul Feldman (Texas A&M University); Maros Servatka (Macquarie Business School, University of Alaska Anchorage); Jorge Tarraso (Libretto); Radovan Vadovic (Carleton University)
    Abstract: Lab evidence on trust games involves more cooperation than conventional economic theory predicts. We explore whether this pattern extends to a field setting where we are able to control for (lack of) repeat-play and reputation: the taxi market in Mexico City. We find a remarkable degree of trustworthiness, even with price-haggling which was predicted to reduce trustworthiness.
    Keywords: trustworthiness, honesty, reciprocity, field experiment, haggling, taxis, Mexico City
    JEL: C72 C90 C93 D91
    Date: 2022–11
  11. By: AKIN, ZAFER
    Abstract: This paper experimentally explores playing the victim behavior, how prevalent it is, its determinants, and potential mechanisms to mitigate it with a subject pool from two regions (UAE and North America). The possibility of playing the victim is introduced by letting some participants receive a negative shock to their initial endowments, after which they can apply for extra compensation even when they do not receive the shock. We fi�nd that the majority of participants play the victim. We then test whether defaults and signing an honesty oath influence this behavior. We �find, contrary to intuitions, that the omission treatments, where lying is a default, failed to increase misrepresentation, and if anything decreased it, while the oath substantially reduced it as expected. Moreover, the extent of pro-sociality and perceived social norms are found to be strongly related to playing the victim behavior. The findings are very similar across regions. Our findings offer some insights to design better policies to support victims, especially during crises such as the Covid-19 pandemic.
    Keywords: Playing the victim, dishonesty, defaults, honesty pledges
    JEL: C90
    Date: 2022–11–22

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