nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2023‒01‒09
sixteen papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Medieval Anti-Semitism, Weimar Social Capital, and the Rise of the Nazi Party: A Reconsideration By Timothy W. Guinnane; Philip Hoffman; Timothy Guinnane
  2. Cultural Stereotypes of Multinational Banks By Barry Eichengreen; Orkun Saka
  3. Social Networks and the Labour Market By Afridi, Farzana; Dhillon, Amrita
  4. Trust and Time Preference: Measuring a Causal Effect in a Random-Assignment Experiment By Linas Nasvytis
  5. Does Public Investment Contribute to Increasing Institutional and Interpersonal Trust?: Place-Based Policies for Sports and Cultural Activities in Cali, Colombia By Martínez, Lina María; Sayago, Juan Tomás
  6. Trust towards Migrants By Gandelman, Néstor; Lamé, Diego
  7. Trustful Voters, Trustworthy Politicians: A Survey Experiment on the Influence of Social Media in Politics By Aruguete, Natalia; Calvo, Ernesto; Scartascini, Carlos; Ventura, Tiago
  8. How Can We Improve Air Pollution?: Try Increasing Trust First By Cafferata, Fernando G.; Hoffmann, Bridget; Scartascini, Carlos
  9. Updating the Social Norm: the Case of Hate Crime after the Brexit Referendum By Facundo Albornoz; Jake Bradley; Silvia Sonderegger
  10. Social Networks, Gender Norms and Women's Labor Supply: Experimental Evidence Using a Job Search Platform By Afridi, Farzana; Dhillon, Amrita; Roy, Sanchari; Sangwan, Nikita
  11. Super-Additive Cooperation By Charles Efferson; Helen Bernhard; Urs Fischbacher; Ernst Fehr
  12. Social Diversity and Social Cohesion in Britain By Tak Wing Chan; Juta Kawalerowicz
  13. How Does it Feel to Be Part of the Minority?: Impacts of Perspective Taking on Prosocial Behavior By Rodríguez Chatruc, Marisol; Rozo, Sandra
  14. Are less informed people more honest?: A Theoretical Investigation with Informal Mutual Insurance By Das, Shampita; Bhattacharya, Sukanta
  15. Cultural Proximity and Production Networks By Brian Cevallos Fujiy; Gaurav Khanna; Hiroshi Toma
  16. Social Capital and Economic Growth: A Meta-Analysis By Xindong Xue; W. Robert Reed; Robbie C.M. van Aert

  1. By: Timothy W. Guinnane; Philip Hoffman; Timothy Guinnane
    Abstract: The persistence literature in economics and related disciplines connects recent outcomes to events long ago. This influential literature marks a promising development but has drawn criticism. We discuss two prominent examples that ground the rise of the Nazi Party in distant historical roots. Several econometric, analytical, and historical errors undermine the papers’ contention that deeply rooted culture and social capital fueled the Nazi rise. The broader lesson is that research of this type works best when it incorporates careful econometrics, serious consideration of underlying mechanisms (including formal theory), and, most important, scrupulous attention to history and to the limitations of historical data.
    Keywords: historical persistence, medieval pogroms, social capital, culture, networks, Nazism, voting behavior, anti-Semitism, political parties, religion, empirical economics, data based estimates, econometrics
    JEL: C18 D71 D72 D85 D91 L14 N01 N13 N14 Z10 Z12
    Date: 2022
  2. By: Barry Eichengreen; Orkun Saka
    Abstract: Using hand-collected data spanning more than a decade on European banks’ sovereign debt portfolios, we show that the trust of residents of a bank’s countries of operation in the residents of a potential target country of investment has a positive, statistically significant, and economically important association with its cross-border exposures. In identifying cultural stereotypes at the bank level, we show that corporate culture at bank headquarters is influenced by foreign subsidiaries for several reasons, including banks’ tendency to hire internally across borders for high-level managerial positions. We therefore leverage the geography of multinational bank branch networks to construct a bank-specific measure of culture that differs across banks headquartered in the same country, at the same point in time, with regard to the same target country. This allows us to compare how sovereign exposures are affected by cultural stereotypes while ruling out confounding factors at country and country-pair levels. The effect of stereotypes is persistent over time, stronger for less diversified banks, and weaker for target countries whose bonds appear more frequently in bank portfolios. Cultural stereotypes are particularly salient when governments are hit by sovereign debt crises.
    Keywords: cultural biases, stereotypes, trust, banks, sovereign debt
    JEL: F34 G11 G21 G41 M14 Z10
    Date: 2022
  3. By: Afridi, Farzana (Indian Statistical Institute); Dhillon, Amrita (King's College London)
    Abstract: This chapter surveys recent literature on social networks and labour markets, with a specific focus on developing countries. It reviews existing research, in particular, on the use of social networks for hiring and the consequences of networks for on-the-job outcomes, including emerging literature on gender and networks. While there is consensus on the prevalence of social networks in job search there is as yet no consensus on the mechanisms for why referrals are so important: an open question is to uncover systematically the conditions under which different mechanisms are relevant. Second, the literature has documented network effects on labour productivity - mostly when there are no externalities between workers. The findings are that the effects of social ties depend very much on the type of production function assumed. An emerging literature examines whether women benefit from referrals as much as men: gender homophily might play a part in some contexts while in others women confront a bias in referrals. Finally, the literature has moved from use of observational data into lab and field experiments to confront better the challenges of identification.
    Keywords: social networks, labor market, search, screening, matching, productivity
    JEL: J16 J41 J31 D82 D83 O12 O15
    Date: 2022–12
  4. By: Linas Nasvytis
    Abstract: Large amounts of evidence suggest that trust levels in a country are an important determinant of its macroeconomic growth. In this paper, we investigate one channel through which trust might support economic performance: through the levels of patience, also known as time preference in the economics literature. Following Gabaix and Laibson (2017), we first argue that time preference can be modelled as optimal Bayesian inference based on noisy signals about the future, so that it is affected by the perceived certainty of future outcomes. Drawing on neuroscience literature, we argue that the mechanism linking trust and patience could be facilitated by the neurotransmitter oxytocin. On the one hand, it is a neural correlate of trusting behavior. On the other, it has an impact on the brain's encoding of prediction error, and could therefore increase the perceived certainty of a neural representation of a future event. The relationship between trust and time preference is tested experimentally using the Trust Game. While the paper does not find a significant effect of trust on time preference or the levels of certainty, it proposes an experimental design that can successfully manipulate people's short-term levels of trust for experimental purposes.
    Date: 2022–11
  5. By: Martínez, Lina María; Sayago, Juan Tomás
    Abstract: This paper studies the effect of two place-based policies implemented in Cali, Colombia on social capital and trust. We use the CaliBRANDO survey to account for institutional and interpersonal trust, matching neighborhood of residence and where policies are applied. We set up a difference-in-difference model to estimate the impact of the policies on the indexes that measure trust. We nd that the organized sport policy improves institutional trust by about 4%. Our results are significant for soccer and basketball and not significant for futsal and other activities. The evidence does not support an effect of nightlights on trust.
    Keywords: Trust;Place-based policies;Social capital
    JEL: H41 O20 C21 L38 R10
    Date: 2022–01
  6. By: Gandelman, Néstor; Lamé, Diego
    Abstract: Using a standard trust game, we elicit trust and reciprocity measures in a representative sample of adult players in Montevideo, the capital city of Uruguay, a country that exhibits relatively better levels of tolerance towards migrants than other Latin American countries. We find no statistically significant differences in trust levels of Uruguayans towards countrymen versus migrants. In reciprocity, we find only marginally significant differences attributable to the nationality of the players.
    Keywords: Trust;Reciprocity;Experimental games;Migrations
    JEL: C9 J15
    Date: 2021–09
  7. By: Aruguete, Natalia; Calvo, Ernesto; Scartascini, Carlos; Ventura, Tiago
    Abstract: Recent increases in political polarization in social media raise questions about the relationship between negative online messages and the decline in political trust around the world. To evaluate this claim causally, we implement a variant of the well-known trust game in a survey experiment with 4,800 respondents in Brazil and Mexico. Our design allows to test the effect of social media on trust and trustworthiness. Survey respondents alternate as agents (politicians) and principals (voters). Players can cast votes, trust others with their votes, and cast entrusted votes. The players rewards are contingent on their preferred “candidate” winning the election. We measure the extent to which voters place their trust in others and are themselves trustworthy, that is, willing to honor requests that may not benefit them. Treated respondents are exposed to messages from in-group or out-group politicians, and with positive or negative tone. Results provide robust support for a negative effect of uncivil partisan discourse on trust behavior and null results on trustworthiness. The negative effect on trust is considerably greater among randomly treated respondents who engage with social media messages. These results show that engaging with messages on social media can have a deleterious effect on trust, even when those messages are not relevant to the task at hand or not representative of the actions of the individuals involved in the game.
    Keywords: Trust;Social media;Trustworthiness;Political polarization
    JEL: D72 D83 D91
    Date: 2021–07
  8. By: Cafferata, Fernando G.; Hoffmann, Bridget; Scartascini, Carlos
    Abstract: Environmental policies are characterized by salient short-term costs and long-term benefits that are difficult to observe and to attribute to the government's efforts. These characteristics imply that citizens' support for environmental policies is highly dependent on their trust in the government's capability to implement solutions and commitment to investments in those policies. Using novel survey data from Mexico City, we show that trust in the government is positively correlated with citizens' willingness to support an additional tax approximately equal to a days minimum wage to improve air quality and greater preference for government retention of revenues from fees collected from polluting firms. We find similar correlations using the perceived quality of public goods as a measure of government competence. These results provide evidence that mistrust can be an obstacle to better environmental outcomes.
    Keywords: Trust;Mexico;Publicly provided private goods;Public services quality;Air pollution
    JEL: Q53 Q52 Q56 H23 H41 H42
    Date: 2021–08
  9. By: Facundo Albornoz (University of Nottingham/CONICET/CEPR); Jake Bradley (University of Nottingham/IZA); Silvia Sonderegger (University of Nottingham)
    Abstract: Within the context of the Brexit referendum, we show that changes in the perception of social norms impact behavior. The referendum revealed new information about views over immigrants at country level. This new information caused a shift in the social norm which made xenophobic expressions more acceptable. At the margin, some of these expressions involve hate crime. We argue that the post-referendum behavioral change increased in the level of surprise at the referendum result, and that observed geographical variations of the effect depend on underlying local views on immigrants. Survey data corroborate these uncovered facts and support our theoretical mechanism.
    Keywords: social norm; social acceptability; xenophobia; value of information; social interactions; referendum
    Date: 2022–12
  10. By: Afridi, Farzana (Indian Statistical Institute); Dhillon, Amrita (King's College London); Roy, Sanchari (King's College London); Sangwan, Nikita (Indian Statistical Institute)
    Abstract: Using a cluster randomized control trial, we study the role of women's social networks in improving female labor force participation. In the first treatment arm, a hyper-local digital job search platform service was offered to a randomly selected group of married couples (non-network treatment) in low-income neighborhoods of Delhi, India. In the second treatment arm, the service was offered to married couples and the wife's social network (network treatment), to disentangle the network effect. Neither couples nor their networks were offered the service in the control group. Approximately one year after the intervention, we find no increase in the wife's likelihood of working in either treatment group relative to the control group. Instead, there is a significant improvement in their husbands' labor market outcomes, including the likelihood of working, work hours, and monthly earnings, while in contrast home-based self-employment increased among wives – both in the network treatment group. We argue that our findings can be explained by the gendered structure of social networks in our setting, which reinforces (conservative) social norms about women's (outside) work.
    Keywords: social networks, social norms, gender, job-matching platforms, employment
    JEL: J16 J21 J24 O33
    Date: 2022–11
  11. By: Charles Efferson; Helen Bernhard; Urs Fischbacher; Ernst Fehr
    Abstract: Repeated interactions provide a prominent but paradoxical hypothesis for human cooperation in one-shot interactions. Intergroup competitions provide a different hypothesis that is intuitively appealing but heterodox. We show that neither mechanism reliably supports the evolution of cooperation when actions vary continuously. Ambiguous reciprocity, a strategy generally ruled out in models of reciprocal altruism, completely undermines cooperation under repeated interactions, which challenges repeated interactions as a stand-alone explanation for cooperation in both repeated and one-shot settings. Intergroup competitions do not reliably support cooperation because groups tend to be similar under relevant conditions. Moreover, even if groups vary, cooperative groups may lose competitions for several reasons. Although repeated interactions and group competitions do not support cooperation by themselves, combining them often triggers powerful synergies because group competitions can stabilise cooperative strategies against the corrosive effect of ambiguous reciprocity. Evolved strategies often consist of cooperative reciprocity with ingroup partners and uncooperative reciprocity with outgroup partners. Results from a one-shot behavioural experiment in Papua New Guinea fit exactly this pattern. They thus indicate neither an evolutionary history of repeated interactions without group competition nor a history of group competition without repeated interactions. Our results are only consistent with social motives that evolved under the joint influence of both mechanisms together.
    Keywords: evolution of cooperation, reciprocity, intergroup competition, social dilemma
    JEL: C60 C70 C90
    Date: 2022
  12. By: Tak Wing Chan (Social Research institute, University College London); Juta Kawalerowicz (Department of Human Geography, Stockholm University)
    Abstract: We use data from a large-scale and nationally representative survey to examine whether there is in Britain a trade-off between social diversity and social cohesion. Using six separate measures of social cohesion (generalised trust, volunteering, giving to charity, inter-ethnic friendship, and two neighbourhood cohesion scales) and four measures of social diversity (ethnic fractionalisation, religious fractionalisation, percentage muslim, and percentage foreign-born), we show that, net of individual covariates, there is a negative association between social diversity and most measures of social cohesion. But these associations disappear when neighbourhood deprivation is taken into account. These results are robust to alternative definitions of neighbourhood. We also investigate the possibility that the diversity–cohesion trade-off is found in more segregated neighbourhoods. But we find very little evidence to support that claim.
    Keywords: Social cohesion, social diversity, deprivation
    Date: 2022–12–01
  13. By: Rodríguez Chatruc, Marisol; Rozo, Sandra
    Abstract: Can taking the perspective of an out-group reduce prejudice and promote prosociality? Building on insights from social psychology, we study the case of Colombian natives and Venezuelan immigrants. We conducted an online experiment in which we randomly assigned natives to either play an online game that immersed them in the life of a Venezuelan migrant or to watch a documentary about Venezuelans crossing the border on foot. Relative to a control group, both treatments increased altruism towards Venezuelans and improved some attitudes, but only the game significantly increased self-reported trust.
    Keywords: prejudice;perspective taking
    JEL: C91 D91 J15
    Date: 2021–09
  14. By: Das, Shampita; Bhattacharya, Sukanta
    Abstract: The paper analyzes the effect of improvement in the quality of information on the arrangement of informal mutual insurance. We show that the equilibrium amount of insurance mostly tends to decrease as the quality of the signal improves for any individual. We also show that the improvement in signal quality of an individual makes her better off at the cost of her partner. With community enforcement of insurance arrangements and random matching among community members, we show that less informed individuals are more likely to behave honestly than the more informed community members.
    Keywords: informal insurance, quality of information, social norms, community bonding, repeated interactions.
    JEL: D81
    Date: 2021–12
  15. By: Brian Cevallos Fujiy (University of Michigan); Gaurav Khanna (University of California San Diego); Hiroshi Toma (University of Michigan)
    Abstract: We examine how cultural proximity shapes production networks, and how it affects aggregate welfare and productivity. We combine a new dataset of firm-to-firm trade for a large Indian state with information on cultural proximity between firms derived from IndiaÕs caste and religious classifications. We find that larger cultural proximity between a pair of firms reduces prices and fosters trade at both intensive and extensive margins. We argue that these results are driven by increasing trust between firms due to their cultural proximity, which in turn solves contracting frictions. Guided by these stylized facts, we propose a quantitative firm-level production network model, where cultural proximity influences trade and matching costs. We derive estimable equations from the model and estimate the model parameters leveraging variation in the cultural group composition of firm owners. We quantify the welfare and productivity consequences of implementing social inclusion policies that shape the formation of production networks. Our counterfactual exercises indicate that social inclusion policies can raise welfare by as much as 1.76%, while social isolation lowers welfare by 1.45%. Reducing contracting frictions increases welfare by 0.87% via the channel of trade becoming less reliant on cultural proximity.
    Keywords: cultural proximity, production networks, firm-to-firm trade
    JEL: D51 F19 O17
    Date: 2022–11
  16. By: Xindong Xue; W. Robert Reed (University of Canterbury); Robbie C.M. van Aert
    Abstract: This study collects and analyses 993 estimates from 81 studies to generate an overall assessment of the empirical literature on social capital and economic growth. Using a variety of estimation procedures, we reach the following conclusions. First, there is evidence that a meaningful relationship exists between social capital and economic growth. The estimated sizes of the overall mean effect in our specifications range from somewhat larger than “small” to somewhat larger than “medium” depending on the estimation method we use. Second, our analysis does not indicate that the associated empirical literature is distorted by publication bias. Third, there is evidence to indicate that cognitive social capital (e.g., trust) has a larger effect on economic growth than other types of social capital, though the evidence is not strong. Finally, while the coefficient signs of our meta-regression analysis lined up with prior expectations, the associated effect sizes were generally small to negligible.
    Keywords: Social capital, Economic growth, Cognitive social capital, Structural social capital, Meta-analysis, Meta-regression, Publication Bias
    JEL: B40 O31 O40 O47 R11 Z10
    Date: 2022–12–01

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