nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2023‒06‒26
twelve papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Qanats By Alireza Naghavi; Mohsen Shaeyan
  2. “Railways and Roadways to Trust” By Despina Gavresi; Anastasia Litina; Georgios Tsiachtsiras
  3. Social Organizations and Political Institutions: Why China and Europe Diverged By Joel Mokyr; Guido Tabellini
  4. Understanding the growth of solitary leisure in the U.S., 1965 – 2018 By R. Gordon Rinderknecht; Daniela V. Negraia; Sophie Lohmann; Emilio Zagheni
  5. Image Concerns and the Dynamics of Prosocial Behavior By Jana Hofmeier; Louis Strang
  6. How does globalisation affect social cohesion? By Vrolijk, Kasper
  7. The Dynastic Transmission of Power, Exit Options and the Coevolution of Rent-Seeking Elites By Arthur Silve; Thierry Verdier; Thierry Verdier
  8. Social mobility and populist values By Perelman, Sergio; Pestieau, Pierre
  9. Central bank communication and trust: an experimental study on the European Central Bank and the general public By Mochhoury, Sarah
  10. Social Capital Measures at Census Tract Level By Kalee E. Burns; Julie L. Hotchkiss
  11. Social Interactions with Endogenous Group Formation By Shuyang Sheng; Xiaoting Sun
  12. The Complexity of Corporate Culture as a Potential Source of Firm Profit Differentials By Frederik Banning; Jessica Reale; Michael Roos

  1. By: Alireza Naghavi (University of Bologna); Mohsen Shaeyan (Johannes Gutenberg University Mainz)
    Abstract: Qanats – traditional Persian irrigation systems first built around 1000 B.C. – required a complex of cooperative local institutions for their construction and maintenance. We show that these institutions produced a (local) culture of cooperation in Iran that persists to the present day when qanats are no longer of economic value. We use unique geo-coded data on qanat coordinates in Iran together with information collected and digitized on cooperative enterprises and find a positive relationship between qanat locations and cooperative activities today. We build an IV using grid-level geological preconditions necessary for the construction and functioning of qanats: gently sloped terrains and intermediate clay content. The cooperation culture persists particularly close to historical trade routes and in areas with stable climatic conditions. The results hold for alternative proxies of social capital, namely the degree to which people trust their neighbours and the pervasiveness of charity-based Islamic microfinance establishments.
    Keywords: Irrigation, Cooperation, Qanat, Cooperatives, Social capital, Trade routes, Culture, Persistence
    JEL: N55 O13 O53 Q13 Q15 Z10 D70
    Date: 2023–06–14
  2. By: Despina Gavresi (University of Ioannina); Anastasia Litina (University of Macedonia); Georgios Tsiachtsiras (AQR-IREA University of Barcelona and University of Bath)
    Abstract: This paper explores the interplay between the extent of transportation infrastructure and various aspects of trust (interpersonal and political trust). We test our hypothesis by exploiting cross regional variation during the period 2002-2019. We focus on two measures of infrastructure, i.e., the length of railroads and railways in European regions. Interpersonal and political trust variables are derived from individual level data available in nine consecutive rounds of the European Social Survey. We document that individuals who live in regions with extended infrastructure network manifest higher trust both in people and political institutions. To mitigate endogeneity concerns, we extend our analysis to a sample of international and inter-regional immigrants. We further adopt an IV approach, where we use as an instrument the pre-existing Roman roads networks. The results from all three specifications are aligned to those of the benchmark analysis. We explore access to differential levels of trust as one of the underlying mechanisms behind our results. Relying on an expanding literature we hypothesize that the effect of infrastructure on trust operates directly via the degree of exposure to new people and ideas, as well as indirectly, via the effect of infrastructure on the structure of the economy.
    Keywords: Motorways, Railroads, Political trust, Interpersonal trust JEL classification: Z10, P48, R10, R40.
    Date: 2022–10
  3. By: Joel Mokyr; Guido Tabellini
    Abstract: This paper discusses the historical and social origins of the bifurcation in the political institutions of China and Western Europe. An important factor, recognized in the literature, is that China centralized state institutions very early on, while Europe remained politically fragmented for much longer. These initial differences, however, were amplified by the different social organizations (clans in China, corporate structures in Europe) that spread in these two societies at the turn of the first millennium AD. State institutions interacted with these organizations, and were shaped and influenced by this interaction. The paper discusses the many ways in which corporations contributed to the emergence of representative institutions and gave prominence to the rule of law in the early stages of state formation in Europe, and how specific features of lineage organizations contributed to the consolidation of the Imperial regime in China.
    Date: 2023
  4. By: R. Gordon Rinderknecht (Max Planck Institute for Demographic Research, Rostock, Germany); Daniela V. Negraia (Max Planck Institute for Demographic Research, Rostock, Germany); Sophie Lohmann (Max Planck Institute for Demographic Research, Rostock, Germany); Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: This research examined the extent to which solitary leisure in the U.S. has grown over the past 60 years. The demographic and technological developments of the past decades have profoundly altered the way people live life. An increase in social isolation is one potential such change, though its prevalence remains debated and challenging to directly quantify. To provide this direct quantification, we focused on an area of life where social isolation has the potential to be especially detrimental: leisure time. We assessed changes in leisure spent alone via nationally representative U.S. time-use data spanning six decades. Findings indicate that time spent alone during leisure has more than doubled among working-aged adults, from 57 daily minutes in 1965 to 117 in 2018. More concerningly, the probability of spending five hours or more in solo leisure a day has increased six-fold. Multivariate analyses indicate this trend is partly accounted for by population changes, most notably reductions in marriage rates and increases in living alone, but most of the growth of solo leisure remains unexplained. Leisure is an important source of social capital and network formation, and increasingly solitary leisure may undermine well-being in the moment and across the life course.
    Keywords: USA
    JEL: J1 Z0
    Date: 2023
  5. By: Jana Hofmeier (University of Bonn); Louis Strang (University of Cologne)
    Abstract: This paper studies the dynamic effect of observability on prosocial behavior. We hypothesize a twofold positive effect. First, people should act more prosocially when being observed. Second, this increased level of prosociality should motivate an ongoing elevated altruistic attitude, in accordance with the concept of altruistic capital formation. We test our predictions running two experiments in which subjects make a first donation decision either observed or anonymously. Subsequently, all subjects face a second anonymous donation decision. In gen- eral, we observe high rates of altruistic behavior. However, we find only weak positive effects of observability on first-stage prosocial behavior and no effects on second-stage prosocial behavior.
    Keywords: Prosocial Behavior, Donation, Moral Licensing, Altruistic Capital, Social preferences, Lab experiment
    JEL: C91 D64
    Date: 2023–06
  6. By: Vrolijk, Kasper
    Abstract: This paper explores the effects of globalisation on social cohesion outcomes and the underlying mechanisms. A framework for reviewing the literature is offered, in which labour earnings, household expenditures and firm productivity are identified as the main channels through which economic globalisation affects cohesion, trust and pro-social behaviour. Evidence points towards substantial losses in cohesion following negative globalisation changes, altering cohesion through absolute and relative changes in employment and expenditure (and people's perception thereof). However, evidence is thin and inconsistent; studies are limited to effects of trade (and not foreign direct investment), cover some dimensions of cohesion but not others, and often evaluate the effect of negative trade events on cohesion (while trade and foreign direct investment may offer gains to workers, households and firms, which boosts cohesion). From the available evidence, it is determined that when setting policy, it is important to address relative losses from globalisation (between groups), incorporate economic costs of social repercussions, and take on market distortions and underlying cyclical or secular trends that may amplify the effects of globalisation on cohesion.
    Keywords: Globalisation, social cohesion
    Date: 2023
  7. By: Arthur Silve; Thierry Verdier; Thierry Verdier
    Abstract: We introduce a dynamic model that investigates the persistence and evolution of elite-dominated societies, where inherited political capital determines one’s social standing. Our analysis highlights the critical role of the distribution of exit options in the evolution of political inclusiveness across generations. An elite comparatively more mobile than the masses generally entrenches a politically stratified society, whereas a more widespread distribution of exit options can encourage inclusiveness. Under certain conditions differential mobility may still induce political inclusiveness across generations. Exit options across different political entities lead to a joint evolution of local power structures.
    Keywords: political dynasties, elite dynamics, exit options, rent-seeking, political spillovers
    JEL: D72 F42 H26 P16 P48
    Date: 2023
  8. By: Perelman, Sergio (Université de Liège); Pestieau, Pierre (Université catholique de Louvain, LIDAM/CORE, Belgium)
    Abstract: Despite some successes in Europe, the welfare state has not been able to renew itself to meet the challenge of various social divides. The major source of these divides is undoubtedly the failure of the social elevator. One might conjecture that the welfare state has probably been too preoccupied with income inequality and poverty and not enough with social mobility. To support this hypothesis, it is important to have good measures of intergenerational mobility and of populist attitudes to compare them with indicators of redistribution. If redistribution and social mobility are indeed found to be negatively correlated, this would invalidate the famous Gatsby Curve. In this paper, we rely on the several waves of the European Social Survey (ESS) to elicit indicators of mobility and of populism and show how the lack of social mobility can explain populist attitudes across a number of European countries.
    Keywords: Populism, social mobility, education policy, Gatsby curve
    JEL: H20 H31 H50
    Date: 2023–05–01
  9. By: Mochhoury, Sarah
    Abstract: While it has become clear that communication is a monetary policy tool for central banks, and extensive research has been conducted on central bank communication with financial markets, little is known so far on central bank communication with the general public. My research provides new insights into this field, confirming that the efforts of central banks to connect with a wider public are not in vain. In a randomised controlled trial, I focus on the determinants of trust in the European Central Bank (ECB) and on understanding of its communication about the Pandemic Emergency Purchase Programme, which was set up as part of the ECB’s response to the COVID-19 crisis. I find that the ECB’s simplified and relatable communication leads to greater trust in the central bank among the general public, as it has a positive impact on perceptions of the ECB among laypeople. The simplified content also proves to contribute to increased understanding of the central bank’s messages among the wider public. JEL Classification: C83, C93, D83, E52, E58
    Keywords: Behavioural economics, Central bank communication, European Central Bank, Experimental economics, Trust
    Date: 2023–06
  10. By: Kalee E. Burns; Julie L. Hotchkiss
    Abstract: The purpose of this technical report is to describe the process used to generate census tract level measures of social capital. Three data sets are available to researchers that result from the process de-scribed. The data sets contain (1) the average probability for each census tract of having a low, medium, and high level of each of eight social capital measures, (2) the parameter estimates used to predict indi-vidual low, medium, and high probabilities that are then aggregated at the census tract level, and (3) the standard errors for the parameter estimates used to predict individual low, medium, and high probabili-ties. What is meant by “social capital” and for more details about the estimation procedure described here, see Hotchkiss, Rupashingha, and Watson (2021); Hotchkiss (2019); and Hotchkiss and Rupasingha (2018).
    Date: 2023–04
  11. By: Shuyang Sheng; Xiaoting Sun
    Abstract: This paper explores the identification and estimation of social interaction models with endogenous group formation. We characterize group formation using a two-sided many-to-one matching model, where individuals select groups based on their preferences, while groups rank individuals according to their qualifications, accepting the most qualified until reaching capacities. The selection into groups leads to a bias in standard estimates of peer effects, which is difficult to correct for due to equilibrium effects. We employ the limiting approximation of a market as the market size grows large to simplify the selection bias. Assuming exchangeable unobservables, we can express the selection bias of an individual as a group-invariant nonparametric function of her preference and qualification indices. In addition to the selection correction, we show that the excluded variables in group formation can serve as instruments to tackle the reflection problem. We propose semiparametric distribution-free estimators that are root-n consistent and asymptotically normal.
    Date: 2023–06
  12. By: Frederik Banning; Jessica Reale; Michael Roos
    Abstract: This paper proposes an addition to the firm-based perspective on intra-industry profitability differentials by modelling a business organisation as a complex adaptive system. The presented agent-based model introduces an endogenous similarity-based social network and employees' reactions to dynamic management strategies informed by key company benchmarks. The value-based decision-making of employees shapes the behaviour of others through their perception of social norms from which a corporate culture emerges. These elements induce intertwined feedback mechanisms which lead to unforeseen profitability outcomes. The simulations reveal that variants of extreme adaptation of management style yield higher profitability in the long run than the more moderate alternatives. Furthermore, we observe convergence towards a dominant management strategy with low intensity in monitoring efforts as well as high monetary incentivisation of cooperative behaviour. The results suggest that measures increasing the connectedness of the workforce across all four value groups might be advisable to escape potential lock-in situation and thus raise profitability. A further positive impact on profitability can be achieved through knowledge about the distribution of personal values among a firm's employees. Choosing appropriate and enabling management strategies, and sticking to them in the long run, can support the realisation of the inherent self-organisational capacities of the workforce, ultimately leading to higher profitability through cultural stability.
    Date: 2023–05

This nep-soc issue is ©2023 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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