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on Social Norms and Social Capital |
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Issue of 2026–03–16
eight papers chosen by Fabio Sabatini, Università degli Studi di Roma “La Sapienza” |
| By: | Olga Popova (Leibniz Institute for East and Southeast European Studies); Milena Nikolova (University of Groningen); Sarah Grace See (University of Groningen); Vladimir Otrachshenko (National Bank of Slovakia) |
| Abstract: | How do macroeconomic conditions shape people’s trust in political institutions? This paper addresses this question by analyzing the association between inflation, unemployment, and political trust using repeated cross-sectional data from over two million individuals across 148 countries between 2006 and 2023. We find that high unemployment is strongly and consistently linked to lower confidence in national governments and reduced approval of national leaders. In contrast, the influence of inflation is substantially smaller—typically four to eight times weaker—and less robust across specifications. Perceptions of national economic performance, personal financial insecurity, and corruption appear to be key channels underlying these relationships. While inflation is linked to lower political trust mostly in upper-middle- and high-income countries, the negative association between unemployment and trust is widespread across all income levels. These findings suggest that unemployment remains a global and salient challenge that governments should prioritize. |
| JEL: | I31 H11 E31 J60 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:svk:wpaper:1121 |
| By: | Raffaele Fiorentino; Simona Mandile |
| Abstract: | This paper examines the unintended consequences of policies perceived as inequitable by leveraging Italy’s Quota 100 pension reform, which denied early retirement to workers with identical contribution histories who did not meet an age cutoff. Using SHARE data and a difference-in-differences design, we first establish that excluded workers experienced no change in unemployment or disability status, while their relative probability of being retired fell mechanically. We then document a significant deterioration in their mental health, with effects emerging immediately upon the reform’s introduction and persisting for at least two years. These effects are concentrated among workers who satisfy the contribution requirement but are denied eligibility solely on the basis of age, implicating perceived unfairness as a primary channel. Using European Social Survey data and a regression discontinuity design, we find that the reform led to a reduction in trust in institutions among age-ineligible workers. Finally, electoral data show that the League, the reform’s principal architect, suffered vote share losses in municipalities with higher concentrations of excluded workers, with penaltiesexceeding any gains accrued in areas with more beneficiaries. |
| Keywords: | pension reform, mental health, perceived unfairness, institutional trust, electoral accountability |
| JEL: | J26 I10 D3 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12518 |
| By: | Campos, Nauro (University College London); Ginefra, Flavia (LSE); Martelli, Angelo (LSE); Terzi, Alessio (University of Cambridge) |
| Abstract: | This paper reviews research across economics, political economy, political science, and public policy to investigate how institutions shape the adoption, implementation, and durability of climate policies. We examine how formal institutions (i) coordinate implementation capacity, (ii) anchor long-term commitments, and (iii) mediate distributional conflict. We also discuss how informal institutions, such as social norms and trust, further condition whether formal mechanisms translate into durable action. We distinguish quasi-experimental evidence from correlational and case-based findings, identifying where economic methods could further sharpen evidence, and conclude with a research agenda focused on institutional interdependencies and the conditions under which institutions can facilitate the adoption of effective and irreversible climate policies. |
| Keywords: | climate change, institutions, political economy, climate governance |
| JEL: | D72 H11 P48 O43 O44 Q54 Q58 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18424 |
| By: | Müller, Karsten (National University of Singapore, NUS Business School and Risk Management Institute, and CEPR); Schwarz, Carlo (University of Bocconi, Department of Economics and IGIER, and PERICLES, CEPR, CAGE); Shen, Zekai (University of Bocconi, Department of Economics) |
| Abstract: | Social media platforms are often credited with empowering grassroots movements in the pursuit of political freedoms. In this paper, we show how social media can also be exploited by political elites to undermine democratic institutions, using the January 6th , 2021 Capitol insurrection as a case study. We present three main findings. First, by exploiting plausibly exogenous variation in Twitter usage, we document that social media exposure predicts participation in the Capitol attack, donations for anti-democratic causes, beliefs in election fraud, and support for the January 6th rioters. Second, Donald Trump's tweets questioning the election's integrity were followed by spikes in "Stop the Steal" activity on Twitter and pro-Trump donations originating from high Twitter usage counties. Third, the insurrection and Trump's account deletion were followed by a decrease in the public expression of toxic political and "Stop the Steal" messaging by pro-Trump users on Twitter, but had little effect on privately held beliefs about the election outcome and pro-Trump donations. |
| Keywords: | Social Media, January 6th, Election Denial, Content Moderation JEL Classification: L82, J15, O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:794 |
| By: | Marco Battaglini; Valerio Leone Sciabolazza,; Mengwei Lin; Eleonora Patacchini |
| Abstract: | It has long been observed that there is little money in U.S. politics compared to the stakes. But what if contributions are not fully observable or non-monetary in nature and thus not easily quantifiable? We study this question with a new data set on the top 1000 donors in U.S. congressional races. Since top donors do not randomly support candidates, we propose an identification strategy based on information about top donors' deaths and the observed variations in candidates' performance after these events. The death of a top donor significantly decreases a candidate's chances of being elected in the current and future election cycles. Moreover, it affects the legislative activities of elected candidates. These effects do not depend on top donors' monetary contributions to a candidate but on their prominence and their total contributions during the election campaign. |
| Keywords: | Campaign Finance; Top Donors; Tullock Paradox; Electoral Outcomes; Political Networks |
| JEL: | D72 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp277 |
| By: | Bing Han; Haoyang Liu; Pengfei Sui |
| Abstract: | Using new data on social interactions and individual trading records in the Bitcoin market, we show that investor sentiment spreads across social connections. Investors systematically revise their beliefs about Bitcoin prices in the direction of average peer sentiment—even though that sentiment does not predict future prices. We document specific patterns in the diffusion of beliefs across networks, including evidence consistent with confirmation bias. Moreover, this social-sentiment contagion influences both individual trading decisions and overall market dynamics. Our novel measure of contagion intensity significantly forecasts Bitcoin volatility, trading volume and market crashes. |
| Keywords: | social interactions; belief updating; sentiment contagion; bitcoin; bubbles |
| JEL: | G11 G12 G41 G53 |
| Date: | 2026–03–02 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:102864 |
| By: | Victor Lavy; Moses Shayo |
| Abstract: | We study how teachers' rule violations in grading affect students' ethical behavior. Using administrative data from high-stakes exams, combining teacher-assigned internal scores with externally graded national exam scores, we track teacher grading violations and subsequent student cheating. We explore three potential mechanisms: imitation (learning that rules can be broken), positive reciprocity (responding favorably to favorable treatment), and negative reciprocity (retaliating against unfavorable treatment). Exploiting within-student variation in exposure to different teachers, we find students are significantly more likely to cheat when teachers break the rules to their detriment (systematically undergrading), consistent with both imitation and negative reciprocity. However, when teachers systematically overgrade, responses vary by community structure. In heterogeneous communities, overgrading increases student cheating, suggesting imitation dominates. In homogeneous communities, students respond by cheating less, consistent with positive reciprocity dominating. This pattern holds across multiple homogeneity measures, including surname concentration and residential clustering. Survey measures of mutual respect and support between students and teachers confirm this pattern. |
| JEL: | I20 J00 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34931 |
| By: | Gauthier Fontanive (DEM, Université du Luxembourg); Emma Thill (DEM, Université du Luxembourg); |
| Abstract: | "We study how shared experiences that make immigration salient impact public attitudes toward immigration. Combining 11 waves of the European Social Survey (2002-2023) with data on European national football team performance in major international competitions and team diversity, we exploit quasi-random variation in match timing relative to survey interviews to identify shifts in immigration attitudes. We develop two measures of diversity: a surname-based ancestry index and a racial classification based on visible markers using machine learning tools. We find that following defeats, respondents in countries with a more diverse national team perceive immigrants to have a worse impact on their country. Victories, in contrast, lead to higher desired levels of immigration. These effects are strongest following unexpected or close defeats and victories. In addition, defeats tend to boost support for far-right parties when team diversity is high. Our results are robust to alternative specifications in the case of defeats, suggesting a scapegoating mechanism that is translated from (perceived) out-group players onto the out-group as a whole. Our findings showcase that shared experiences such as international sporting competitions that make diversity salient generate strong emotional responses that may translate into temporary important attitude and preference shifts towards diversity." |
| Keywords: | Immigration attitudes, Football, Diversity, Migration |
| JEL: | F22 J15 O15 O52 Z20 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:luc:wpaper:26-05 |