the solaria syndrome social capital in a growing hyper technological economy we develop a dynamic model to analyze the sources and the evolution of social participation and social capital in a growing economy characterized by exogenous technical progress starting from the assumption that the well being of agents basically depends on material and relational goods we show that the best case scenarios hold when technology and social capital both support just one of the two productions at the expenses of the other however trajectories are possible where technology and social interaction balance one another in fostering the growth of both the social and the private sector of the economy along such tracks technology may play a crucial role in supporting a socially sustainable economic growth

only income diverges a neoclassical anomaly the neoclassical growth model ngm is only consistent with the absolute divergence in output levels we observe if some determinants of steady state income are also diverging in this paper we show that accumulation rates of physical and human capital are actually significantly converging as are openness to trade and several variables measuring institutional quality output divergence in the face of input policy and institutional convergence is a deep anomaly for the ngm

comparative social mobility revisited models of convergence and divergence in 16 countries this paper reanalyzes 3 stratum intergenerational mobility classifications assembled by hazelrigg and garnier for men in 16 countries in the 1960s and 1970s log linear and log multiplicative models are used to compare mobility regimes and to estimate effects of industrialization educational enrollment social democracy and income inequality on immobility and other parameters of the mobility process several models of mobility fit the data equally well so criteria of plausibility and parsimony are applied to choose one model of stratum specific immobility and another model of vertical mobility with uniform immobility we find substantial similarity in mobility and immobility across countries but the exogenous variables do explain systematic differences among countries cross national variations are complex because most of the exogenous variables have different effects on different parameters of the mobility regime relative to other factors industrialization and education have weaker effects on mobility regimes than has usually been supposed

on the empirics of social capital this paper critically examines the way in which empirical evidence is developed in support of a role for social capital in socioeconomic outcomes three leading studies of social capital are reviewed and in each case argued to suffer from various identification problems a general set of conditions under which social capital effects may be identified in linear models is given careful attention to these conditions combined with greater openmindedness as to what constitutes appropriate evidence seems the best route to improving empirical studies of social capital

the productivity of trust this paper tests whether social trust affects total factor productivity tfp using both development and growth accounting we find strong evidence of a causal positive effect of social trust on the level and growth of tfp we moreover observe that the effect of social trust on tfp runs through economic judicial institutions but not through political institutions those findings resist a series of robustness checks

does social trust determine the size of the welfare state evidence using historical identification most modern welfare states offer an extensive array of services and benefits that are wholly or partly financed by tax revenue one missing link in explaining the long run sustainability of such comprehensive welfare states could be the already existing stock of trust indeed our cross country results suggest that trust determines the size of welfare states as well as three features that are arguably necessary for their preservation high levels of political confidence strong legal institutions protecting private property rights and low levels of bureaucratic corruption

social capital and entrepreneurial activity a pseudo panel approach abstract this paper uses a pseudo panel approach at an age based cohort level to investigate the extent to which social capital accounts for differences in entrepreneurial activities the findings suggest that trust measured by trust either in strangers or in public institutions facilitates entrepreneurship we also find that parents emphasis on individual achievement relative to interpersonal relations in raising their child is positively associated with entrepreneurship evidence suggests that both social norms and networks influence entrepreneurship these results do not change when we use social capital measured at the national level

shocking behavior random wealth in antebellum georgia and human capital across generations does the lack of wealth constrain parents investments in the human capital of their descendants we conduct a nearly fifty year followup of an episode in which such constraints would have been plausibly relaxed by a random allocation of substantial wealth to families we track descendants of participants in georgia s cherokee land lottery of 1832 in which nearly every adult white male in georgia took part winners received close to the median level of wealth a large financial windfall orthogonal to participants underlying characteristics that might have also affected their children s human capital although winners had slightly more children than non winners they did not send them to school more sons of winners have no better adult outcomes wealth income literacy than the sons of non winners and winners grandchildren do not have higher literacy or school attendance than non winners grandchildren this suggests only a limited role for family financial resources in the formation of human capital in the next generations in this environment and a potentially more important role for other factors that persist through family lines

who trusts others community and individual determinants of social capital in a low income country this study presents new evidence on individual and community specific determinants of social trust using data from 96 villages in bangladesh we find perceived institutional trust to be positively correlated with stated inter personal trust at the same time there is significant social distance among various faith groups in our data both hindus and muslims trust their coreligionists more than they trust those from other religions moreover hindus trust christians buddhists and ngo workers more than muslims and are not distrustful of the wider society trust towards non muslims is negatively correlated with islamic school attendance among muslim respondents while religiosity tends not to play any role compared to religion the effects of institutional trust and local economic development are modest these findings are robust to control for a range of individual and community level correlates and enumerator fixed effects

social mobility and redistributive politics just like economists voters have conflicting views about redistributive taxation because they estimate its incentive costs differently we model rational agents as trying to learn from their dynastic income mobility experience the relative importance of effort and predetermined factors in the generation of income inequality and therefore the magnitude of these incentive costs in the long run left wing dynasties believing less in individual effort and voting for more redistribution coexist with right wing dynasties this allows us to explain why individual mobility experience and not only current income matters for political attiitudes and how persistent differences in perceptions about social mobility can generate persistent differences in redistribution across countries

intergenerational occupational mobility in great britain and the united states since 1850 comment using historical census and survey data long and ferrie forthcoming found a significant decline in social mobility in the united states from 1880 to 1973 we present two critiques of the long ferrie study first the data quality of the long ferrie study is more limiting than the authors acknowledge second and more critically they applied a method ill suited for measuring social mobility of farmers in a comparative study between 1880 and 1973 a period in which the proportion of farmers dramatically declined in the u s we show that long and ferrie s main conclusion is all driven by this misleading result for farmers

the role of social capital in financial development to identify the effect of social capital on financial development we exploit social capital differences within italy in high social capital areas households are more likely to use checks invest less in cash and more in stock have higher access to institutional credit and make less use of informal credit the effect of social capital is stronger where legal enforcement is weaker and among less educated people these results are not driven by omitted environmental variables since we show that the behavior of movers is still affected by the level of social capital of the province where they were born

institutions investment and growth new cross country and panel data evidence this paper outlines the alternative channels through which institutions affect growth and studies the empirical relationship between institutions investment and growth the empirical results indicate that i free market institutions have a positive effect on growth ii economic freedom affects growth through both a direct effect on total factor productivity and an indirect effect on investment iii political and civil liberties may stimulate investment iv an important interaction exists between freedom and human capital investment v milton friedman s conjectures on the relation between political and economic freedom are correct vi promoting economic freedom is an effective policy toward facilitating growth and other types of freedom jel o17 o40 p51

love thy neighbor recessions and interpersonal trust in latin america abstract trust is critical during times of institutional crisis but intuition is ambiguous with regards to economic calamity would a scarcer supply of goods cause greater animosity or does a worsening economic climate constitute a common foe against which people can unite this study investigates the relationship between the experience of recent recessionary years and levels of interpersonal trust specifically in latin america first we find that as the number of recessionary years grows larger the strength of interpersonal trust increases the results are generally robust to the effects of time and alternate measurements of recession second levels of trust are positively correlated with confidence in the central government but negatively with corruption robust to political ideology finally we refute the assertion that catholicism hinders economic growth through strong vertical trust channels instead we find that religiosity especially catholicism increases levels of interpersonal trust understanding such relationships opens doors for policy tools which can utilize strong central government or community level efforts without sacrificing levels of trust in the alternate measure in addition to options which take a hybrid approach

trust in large organizations several authors suggest that trust is an important determinant of cooperation between strangers in a society and therefore of performance of social institutions we argue that trust should be particularly important for the performance of large organizations in a cross section of countries evidence on government performance participation in civic and professional societies importance of large firms and the performance of social institutions more generally supports this hypothesis moreover trust is lower in countries with dominant hierarchical religions which may have deterred networks of cooperation trust hold up remarkably well on a cross section of countries this abstract was borrowed from another version of this item

do societal values influence financial development new evidence on the effects of post materialism and institutions on stock markets in this paper we present new evidence on the effects of social values on stock market development using panel data for a heterogeneous set of 43 countries we use the inglehart post materialism index to identify the relation between the degree of post materialism and the size of stock markets controlling for a range of macro economic and institutional country characteristics and accounting for endogenous relationships between the main variables of interest we find a robust and sizeable positive effect of post materialism on stock markets legal political and democratic institutions also promote the development of stock markets furthermore we find that the effect of post materialism consists of a direct effect and a substantial indirect effect that runs via several types of institutions this latter finding indicates that it is important to account for interrelationships between social values and institutions when estimating their full economic effects

intergenerational wealth mobility in england 1858 2012 surnames and social mobility this article uses a panel of 18 869 people with rare surnames whose wealth is observed at death in england and wales 1858 2012 to measure the intergenerational elasticity of wealth over five generations we show using rare surnames to track families that wealth is much more persistent than standard one generation estimates would suggest there is still a significant correlation between the wealth of families five generations apart we show that this finding can be reconciled with standard estimates of wealth mobility by positing an underlying first order markov process of wealth inheritance with an intergenerational elasticity of 0 70 0 75 throughout the years 1858 2012

evidence from lagos on discrimination across ethnic and class identities in informal trade abstract this paper investigates the determinants of price discrimination in the rice market in one neighborhood of lagos nigeria there has been little empirical study of how ethnicity and class shape economic outcomes in informal market interactions we conduct an audit experiment one of the first audit experiments in africa seeking to address this gap we experimentally manipulate class with confederates presenting as different classes this may be the first audit study to take this approach this is also one of the first in person audits to have multiple transactions for each buyer and seller thus allowing for the use of buyer and seller fixed effects we find little evidence that all else equal sharing an ethnicity on its own influences market treatment class however does have substantial effects at least for non coethnics high class non coethnics receive higher prices per unit than low class non coethnics our findings suggest that the boundaries of group identity appear to be at least partially defined by class in the informal economy

does social capital matter for european regional growth abstract this paper analyzes the role of different elements of social capital in economic growth for a sample of 85 european regions during the period 1995 2008 despite the remarkable progress that social capital and european regional economic growth literatures have experienced over the last two decades initiatives combining the two are few and entirely yet to come for the post 1990s period recent improvements in data availability allow this gap in the literature to be closed since they enable the researcher to consider the traditionally disregarded eastern and central european ece regions this is particularly interesting as they are all transition economies that recently joined the european union with relatively low levels of social capital on the methodological side we follow the bayesian paradigm which enables us to make direct inferences on the parameters to be estimated and deal with parameter uncertainty leading to a deeper understanding of the relationships being investigated in particular we analyze three indicators of social capital namely social trust associational activities and social norms results suggest that the two former might have some implications for regional growth while social norms are a weaker predictor for growth

is full banking integration desirable abstract we analyze the links between banking integration and economic development for a sample of oecd countries we measure banking integration considering indicators that merge not only openness but also connectedness with other banking systems we plug these indicators into income regressions also controlling for other relevant variables considered by the literature in contrast to previous initiatives this second stage explicitly takes into account the differing levels of economic development of the countries in our sample since the benefits of enhanced banking integration might not be generalizable to this end we implement quantile regression also considering the presence of endogenous regressors results show that bank connectedness is more important for economic development than bank openness but the combined effect i e banking integration overall is positive and significant the quantile regression models used in the second stage show that the effects are stronger for the poorest economies

trade social values and the generalized trust author affiliation kenneth s chan department of economics and finance city university of hong kong 83 tat chee avenue kowloon hong kong and the department of economics mcmaster university hamilton ontario canada e mail kschan cityu edu hk acknowledgment i am indebted to two anonymous referees will coleman tom crossley lonnie magee and seminar participants at the city university of hong kong and at the national university of singapore for comments on earlier drafts the usual disclaimers apply 1 introductionthe present paper investigates empirically whether global economic integration can lead to national social disintegration as proclaimed by rodrik 1997 by social disintegration rodrik refers to the uprooting of social values of a nation without a suitable replacement nations do have legitimate reasons for worrying about what globalization does to their norms and social arrangement says rodrik 1997 rodrik s pronouncement is closely akin to if not part of those contentious trade issues arising from differences in national labor and environmental standards cultural practices and child labor for example to tackle this problem the present paper chooses the concept of social capital the stock of norms rules shared understandings and expectations etc in the literature as the basis of evaluation the choice of this particular framework is discussed in section 1 a useful function of social capital is to foster collective actions of the community the latter can be measured by the trust among members of the community one can perhaps conjecture that a drop in trust may signal a rise in social disintegration using the survey data on generalized trust provided by the world values surveys various predictions on trade and generalized trust reported in section 2 can be tested the present paper finds that the openness of a economy ceteris paribus does not always lead to a decrease in generalized trust income distribution is found to play an important role in this openness trust relationship maldistribution of income reduces the positive impact of openness on generalized trust hence when a more open economy raises the income inequality of a divided nation the chance of social disintegration may increase section 3 concludes with a discussion of results 2 theoretical analysis and predictionsrather than using the conventional utility or social welfare function to evaluate the aforementioned issues the present paper uses output performance as a criterion to evaluate the impacts of different social values in other words social values are considered here as part of the so called social capital discussed further that aids production 1literature surveyrecently it is increasingly common for social scientists to use the term social capital the stock of norms values civic traditions conventions etc that constrain a person s actions to explain collective action in a community coleman 1988 defines social capital as people s capacity to work voluntarily together similar to the concept of capital the stock of social capital is productive because it reduces market transactions cost 2 most researchers e g stiglitz 2000 agree that this kind of civic cooperation is the foundation of the nation s informal institution that governs market exchanges and glues the community together the previous discussion can be summarized by the following function forumla omitted see article image where v is voluntary cooperation k is social capital and is a country specific variable in the literature fukuyama 1995 and dasgupta 2000 ascribe the ability to cooperate voluntarily to the trust among the people fukuyama and dasgupta define trust as the common expectation of individuals that others behavior in the community will be cooperative

is trust the missing root of institutions education and development we report evidence that trust is the missing root relating education institutions and economic development we observe that more trust both increases education and improves legal and bureaucratic institutions which in turn spurs economic development we substantiate this intuition with a series of regressions that provide evidence that trust determines both education and the quality of institutions and that education and institutions in turn affect gdp per capita

the effect of financial development on convergence theory and evidence we introduce imperfect creditor protection in a multicountry schumpeterian growth model the theory predicts that any country with more than some critical level of financial development will converge to the growth rate of the world technology frontier and that all other countries will have a strictly lower long run growth rate we present evidence supporting these and other implications in the form of a cross country growth regression with a significant and sizable negative coefficient on initial per capita gdp relative to the united states interacted with financial intermediation in addition we find that other variables representing schooling geography health policy politics and institutions do not affect the significance of the interaction between financial intermediation and initial per capita gdp and do not show any independent effect on convergence in the regressions our findings are robust to removal of outliers and to alternative conditioning sets estimation procedures and measures of financial development

trust and development in this paper we examine linkages between social trust and economic development using for the first time a panel of data we confirm earlier cross sectional studies finding that trust is a significant factor in development and also show for the first time that trust significantly interacts with both investment in physical and human capital we provide a robustness analysis of our results via a set of jackknife experiments on our main equations and the trust coefficients and interactions are very tightly distributed indicating that the results are not highly sample dependent we also consider whether trust directly influences investment and find that in a panel framework it does not unless we allow for a trust education interaction in the investment equation

intergenerational occupational mobility in great britain and the united states since 1850 abstract the us tolerates more inequality than europe and believes its economic mobility is greater than europe s though they had roughly equal rates of intergenerational occupational mobility in the late twentieth century we extend this comparison into the nineteenth century using 10 000 nationally representative british and us fathers and sons the us was more mobile than britain through 1900 so in the experience of those who created the us welfare state in the 1930s the us had indeed been exceptional the us mobility lead over britain was erased by the 1950s as us mobility fell from its nineteenth century levels jel j62 n31 n32 n33 n34

financial development and economic growth views and agenda this critique argues that the preponderance of theoretical reasoning and empirical evidence suggests a positive first order relationship between financial development and economic growth the body of work would push even most skeptics toward the belief that the development of financial markets and institutions is a critical and inextricable part of the growth process and away from the view that the financial system is an inconsequential sideshow responding passively to economic growth many gaps remain however and the paper highlights areas in acute need of additional research