In this issue we feature 14 current papers on the theme of social capital:

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In this issue we have:

 1. Social capital in Europe from 1990 to 2012: trends, path-dependency and convergence - Sarracino, Francesco; Mikucka, Malgorzata

 2. Social Capital, Innovation and Economic Growth - Maria Thompson

 3. Backscratching in Hierarchical Organizations - Valeria Maggian; Natalia Montinari; Antonio Nicolò

 4. Social Trust and Differential Reactions of Local and Foreign Investors to Public News - Chunxin Jia; Yaping Wang; Wei Xiong

 5. Trust and Norwegian-Russian Energy Relations - Marc Ozawa

 6. Participative political institutions and city development 800-1800 - Wahl, Fabian

 7. Trust in the Monetary Authority - Bursian, Dirk; Faia, Ester

 8. Authority and Centrality: Power and Cooperation in Social Dilemma Networks - Ramalingam, Abhijit; Rojo Arjona, David; Schram, Arthur; Van Leeuwen, Boris

 9. Relational Warm Glow and Giving in Social Groups - Sarah Smith; Kimberley Scharf

10. Worth 1000 Words: The effect of social cues on a fundraising campaign in a government agency. A field experiment -   Michael Sanders; David Reinstein

11. A warm glow in the after life? The determinants of charitable bequests - Michael Sanders; Sarah Smith

12. Why are heterogenous communities inefficient? Theory, history and an experiment - David Hugh-Jones and; Carlo Perroni

13. Spontaneous order and social norms. Hayek’s theory of socio-cultural evolution - Gedeon, Péter

14. Friendship at Work: Can Peer Effects Catalyze Female Entrepreneurship? Erica Field; Seema Jayachandran; Rohini Pande; Natalia Rigol

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 1. Social capital in Europe from 1990 to 2012: trends, path-dependency and convergence

    Sarracino, Francesco

    Mikucka, Malgorzata

 Social capital affects many social and economic outcomes; hence, it is  important to monitor its changes over time. Previous literature on trends of  social capital focused mainly on the case of US, devoting less attention to  other regions of the world, such as Europe. This study uses WVS-EVS  integrated data (1990-2012) to describe the trends of 10 proxies of social  capital in 30 Western and Eastern European countries. The paper demonstrates  that the convergence of social capital among European regions was limited,  and it shows evidence of path dependency, especially in case of relational  social capital.

    Keywords: social capital; convergence; path-dependency; trends; Europe;

     EVS WVS.

     JEL: A12 Z13

 URL: http://d.repec.org/n?u=RePEc:pra:mprapa:63619&r=soc

 

   2. Social Capital, Innovation and Economic Growth

     Maria Thompson (Universidade do Minho, NIPE)  Multidisciplinary innovation is the engine of growth of an increasing number  of economies. Innovation output depends increasingly on information sharing  and cooperation between creative agents. Sharing and cooperation requires the  existence of generalised trust. Social capital consists of trust and  trust-based networks. Our main goal is to illustrate theoretically the  importance of social capital to the growth of an innovation economy.

 

    Keywords: Innovation, Social Capital, Economic Growth

 

    JEL: O00 O31 O41

 

URL: http://d.repec.org/n?u=RePEc:nip:nipewp:3/2015&r=soc

 

 3. Backscratching in Hierarchical Organizations

 

    Valeria Maggian

 

    Natalia Montinari

 

    Antonio Nicolò

 

 In this paper we investigate the role of reciprocity in sustaining the  emergence of implicit collusive agreements in hierarchical organizations. We  conduct a laboratory experiment in which an agent hires, on behalf of the  principal, one worker out of two candidates. The two candidates differ in  their ability and, once employed, the worker chooses a level of  non-contractible effort to exert in two tasks: one benefits the organization  (that is both the principal and the agent) while the other one is less  profitable, only benefits the agent and provides him with higher earnings. We  provide evidence that: i) low ability workers are more likely to exert effort  in the task that is exclusively beneficial to the agent; ii) as a  consequence, agents distort the hiring process in favor of the low ability  workers and iii) sharing a small part of the organization's profits with the  workers alleviates their effort distortion.

 

    Keywords: Con ict of Interest, Effort Distortion, Profit Sharing, and

 

     Reciprocity

 

    JEL: C91 J50 L14 M52

 

URL: http://d.repec.org/n?u=RePEc:mib:wpaper:299&r=soc

 

 4. Social Trust and Differential Reactions of Local and Foreign Investors to Public News

 

    Chunxin Jia

 

    Yaping Wang

 

    Wei Xiong

 

 This paper uses the segmented dual-class shares issued by several dozen  Chinese firms---A shares to local Chinese investors and H shares to foreign  investors---to compare reactions of local and foreign investors to the same  public news. We find that local investors react more strongly to earnings  forecasts by local analysts, while foreign investors react more strongly to  forecasts of foreign analysts. This finding highlights social trust as a  force driving people with different social backgrounds to react differently  to the same information.

 

    JEL: F3 G02 G14

 

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21075&r=soc

 

  5. Trust and Norwegian-Russian Energy Relations

 

    Marc Ozawa

 

 Trust in Norwegian-Russian energy relations is one in the making. Both sides  have actively pursued to build trust, particularly over the past decade. The  process has been driven by shared economic interests, the prominence of the  petroleum industry in both countries, and a desire to improve political  relations on both sides. Factors shaping trust are pre-existing on the one  hand, and determined by the actors’ signals on the other. Different  organisational and cultural preferences likewise play a role in the  development of trust and degree of co-operation. This study argues that the  current level of trust is neither high nor low when compared to other  bi-lateral relations with Russia. While trust appears to have contributed to  breakthroughs in co-operation such as the resolution of the maritime border  and new joint ventures in oil exploration, a lack of trust owing to diverging  interests and market forces is inhibiting collaboration in the realm of gas.

 

 This potentially puts Norway and Russia on a path to increased competition  for their primary gas markets, first in Germany and then in the rest of  continental Europe. As the two main gas suppliers of the EU, this suggests  serious implications on the future of European gas markets, the return on  investment for their upstream gas industries, and energy security in the  region.

 

    Keywords: Trust, natural gas, oil, trade, co-operation, Norway, Russia,

 

     Europe

 

URL: http://d.repec.org/n?u=RePEc:cam:camdae:1444&r=soc

 

  6. Participative political institutions and city development 800-1800

 

    Wahl, Fabian

 

 This study investigates the effect of participative political institutions

 

 (PPIs) that emerged in many central European cities from the late 13th  century. The empirical analysis of the paper is based on newly compiled  long-run data for the existence of different types of PPIs in 104 cities in  the Holy Roman Empire. The effect of both an overall index of  participativeness of political institutions as well as of the individual PPIs  is tested empirically. When pooled over all periods and observations, there  seems to be a significant positive overall effect of PPIs in the  German-speaking area but not in the Low Countries. The study founds  considerable spatial and temporal heterogeneity in the effect of PPIs.

 

 Furthermore, the effect of different types of PPIs differs substantially and  in general seems to be short-lived. That is, the results show that the  positive initial effect of some PPIs declined the longer they existed and  over time.

 

    Keywords: Medieval Period,Early-Modern Period,Central Europe,City

 

     Development,Political Institutions,Early Democracy,Guilds

 

    JEL: N44 N94 O10 R11 H11 D72

 

URL: http://d.repec.org/n?u=RePEc:zbw:hohdps:022015&r=soc

 

  7. Trust in the Monetary Authority

 

    Bursian, Dirk

 

    Faia, Ester

 

 Trust in policy makers fluctuates significantly over the cycle and affects  the transmission mechanism. Despite this it is absent from the literature. We  build a monetary model embedding trust cycles; the latter emerge as an  equilibrium phenomenon of a game-theoretic interaction between atomistic  agents and the monetary authority. Trust affects agents' ’stochastic discount  factors, namely the price of future risk, and through this it interacts with  the monetary transmission mechanism. Using data from the Eurobarometer  surveys, we analyze the link between trust and the transmission mechanism of  macro and monetary shocks. Empirical results are in line with theoretical  ones.

 

    Keywords: betrayal aversion; monetary transmission system; trust games

 

    JEL: C7 C8 E0 E5 G12

 

URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10541&r=soc

 

  8. Authority and Centrality: Power and Cooperation in Social Dilemma Networks

 

    Ramalingam, Abhijit

 

    Rojo Arjona, David

 

    Schram, Arthur

 

    Van Leeuwen, Boris

 

 We investigate the effects of power on cooperation in repeated social dilemma  settings. Groups of five players play either multi-player trust games or  VCM-games on a fixed network. Power stems from having the authority to  allocate funds raised through voluntary contributions by all members and/or  from having a pivotal position in the network (centrality). We compare  environments with and without ostracism by allowing players in some  treatments to exclude others from further participation in the network. Our  results show that power matters but that its effects hinge strongly on the  type involved. Reminiscent of the literature on leadership, players with  authority often act more cooperatively than those without such power.

  Nevertheless, when possible, they are quickly ostracized from the group.

  Thus, this kind of power is not tolerated by the powerless. In stark  contrast, centrality leads to less cooperative behavior and this free riding  is not punished; conditional on cooperativeness, players with power from  centrality are less likely to be ostracized than those without. Hence, not  only is this type of power tolerated, but so is the free riding it leads to.

 

    Keywords: power, cooperation, networks, public goods

 

    JEL: C91 D02 D03 H41

 

URL: http://d.repec.org/n?u=RePEc:tse:iastwp:29140&r=soc

 

 

  9. Relational Warm Glow and Giving in Social Groups

 

    Sarah Smith

 

    Kimberley Scharf

 

 We study charitable giving within social groups. Exploiting a unique dataset,  we establish three key relationships between social group size and  fundraising outcomes: (i) a positive relationship between group size and the  total number of donations; (ii) a negative relationship between group size  and the amount given by each donor; (iii) no relationship between group size  and the total amount raised by the fundraiser. We rule out classic  free-riding to explain these relationships since the number of social group  members is only a subset of total contributors. Instead, the findings are  consistent with the notion that giving in social groups is motivated by  “relational” warm glow.

 

    Keywords: Online giving; Fundraising; Social groups; Donations; Charity;

 

     Warm glow

 

    JEL: D64 Z1 H31

 

URL: http://d.repec.org/n?u=RePEc:bri:cmpowp:14/327&r=soc

 

 

 10. Worth 1000 Words: The effect of social cues on a fundraising campaign in a government agency. A field experiment

 

    Michael Sanders

 

    David Reinstein

 

 Giving has been shown by many studies to be a social phenomenon. However,  while people may desire to conform to the donation of others, it is unclear  how fundraisers should take advantage of this. In this paper we conduct a  field experiment in a workplace, in which employees are sent prominent  messages from a colleague who is already a donor. We find that signups for  workplace giving more than double when a picture of the existing donor is  displayed, relative to a message without a picture.

 

    Keywords: Fundraising, charitable giving, peer effects; donations

 

    JEL: C93 D03 D64

 

URL: http://d.repec.org/n?u=RePEc:bri:cmpowp:14/324&r=soc

 

 

 11. A warm glow in the after life? The determinants of charitable bequests

 

    Michael Sanders

 

    Sarah Smith

 

 Using a unique field experiment we show that prompts to leave money to  charity during the will-making process substantially increase the probability  of making a bequest. Asking if the donor wants to leave money to charity  doubles the proportion making a bequest; adding emotional and social cues  trebles it. The responses are strongest among childless people. We compare  the effects of the prompts to the effect of an estates tax. Our results  suggest that both economic and non-pecuniary incentives similarly affect  whether people leave money to charity, but are less effective where people  have strong preferences for other bequests.

 

    Keywords: charitable giving; charitable bequests; prompts; social norms

 

    JEL: D64 H24 H41

 

URL: http://d.repec.org/n?u=RePEc:bri:cmpowp:14/326&r=soc

 

 

 12. Why are heterogenous communities inefficient? Theory, history and an experiment

 

    David Hugh-Jones and (University of East Anglia)

 

    Carlo Perroni (University of Warwick)  We examine why heterogenous communities may fail to provide public goods.

 

 Current work characterizes sanctioning free-riders as an under-supplied  public good. We argue that often free-riders can be punished by the  coordinated action of a group. This punishment can be profitable, and need  not be undersupplied. But the power to expropriate defectors can also be used  to expropriate outgroups. Heterogenous societies may be inefficient because  minorities, rather than free-riders, are expropriated. Even if this is not  so, groups’ different beliefs about the reasons for expropriation may make  the threat of punishment less effective at preventing free-riding. We  illustrate our theory with evidence from California mining camps,  contemporary India, and US schools. In a public goods experiment using  minimal groups and a profitable punishment institution, outgroups were more  likely to be punished, and reacted differently to punishment than ingroup  members.

 

    Keywords: Group Coercion, Social Heterogeneity

 

URL: http://d.repec.org/n?u=RePEc:cge:wacage:224&r=soc

 

 

 13. Spontaneous order and social norms. Hayek’s theory of socio-cultural evolution

 

    Gedeon, Péter

 

 Hayek's theory of socio-cultural evolution is a generalization of his theory  on spontaneous market order. Hayek explains both the emergence of market and  social institutions serving as a social basis for that order within the  framework of a unified evolutionary logic. This logic interprets the  emergence and survival of spontaneous order and group-level rules of conduct  as an unintended consequence of human action. In order to explain the  emergence of social norms exclusively on the basis of methodological  individualism, one would have to give up an exclusively evolutionary  explanation of these norms. Since Hayek applies the invisiblehand explanation  to the investigation of social norms, he combines the position of  methodological individualism with functionalist-evolutionary arguments in his  analysis. Hayek's theory of socio-cultural evolution represents a theory in  the framework of which methodological individualism and functionalism do not  crowd out but complement each other.

 

    Keywords: socio-cultural evolution, invisible-hand explanations,

 

     spontaneous market order, social norms, methodological individualism,

 

     functionalism

 

    JEL: A13 B25 B52 B53

 

URL: http://d.repec.org/n?u=RePEc:cvh:coecwp:2015/09&r=soc

 

 

 14. Friendship at Work: Can Peer Effects Catalyze Female Entrepreneurship?

 

    Erica Field

 

    Seema Jayachandran

 

    Rohini Pande

 

    Natalia Rigol

 

 Does the lack of peers contribute to the observed gender gap in  entrepreneurial success, and is the constraint stronger for women facing more  restrictive social norms? We offered two days of business counseling to a  random sample of customers of India’s largest women’s bank. A random  subsample was invited to attend with a friend. The intervention had a  significant immediate impact on participants’ business activity, but only if  they were trained in the presence of a friend. Four months later, those  trained with a friend were more likely to have taken out business loans, were  less likely to be housewives, and reported increased business activity and  higher household income. The positive impacts of training with a friend were  stronger among women from religious or caste groups with social norms that  restrict female mobility.

 

    JEL: O0

 

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21093&r=soc

 

 

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 End of nep-soc Digest, Vol 53, Issue 4

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