In this issue we feature 8 current papers on the theme of social capital, chosen by Fabio Sabatini (Università degli Studi di Roma “La Sapienza”):

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1. The European Trust Crisis and the Rise of Populism - Algan, Yann; Guriev, Sergei; Papaioannou, Elias; Passari, Evgenia
2. Laws and Norms: Experimental Evidence with Liability Rules - Claude-Denys Fluet; Romain Espinosa; Bruno Deffains
3. Resistance to Institutions and Cultural Distance: Brigandage in Post-Unification Italy - Giampaolo Lecce; Laura Ogliari; Tommaso Orlando
4. Social capital, resilience and regional diversification in Italy - Roberto Antonietti; Ron Boschma
5. Ethnic Diversity and Political Participation: The Role of Individual Income - Giorgio Bellettini; Carlotta Berti Ceroni; Chiara Monfardini
6. Trust and Growth Revisited - Simplice Asongu; Oasis Kodila-Tedika
7. Cities and the Structure of Social Interactions: Evidence from Mobile Phone Data - Büchel, Konstantin; Ehrlich, Maximilian
8. Demonetisation, Social Networks and Social Protection: Insights from Rural Tamil Nadu - Isabelle Guérin; Youna Lanos; Sébastien Michiels; Christophe Jalil Nordman; Govindan Venkatasubramanian

1. The European Trust Crisis and the Rise of Populism

   Algan, Yann

   Guriev, Sergei

   Papaioannou, Elias

   Passari, Evgenia

 We study the implications of the Great Recession for voting for  anti-establishment parties, as well as for general trust and political  attitudes, using regional data across Europe. We find a strong relationship  between increases in unemployment and voting for non-mainstream, especially  populist parties. Moreover, increases in unemployment go in tandem with a  decline in trust in national and European political institutions, while we  find much attenuated effects of unemployment on interpersonal trust. The  correlation between unemployment and attitudes towards immigrants is muted,  especially for their cultural impact. To advance on causality, we extract the  component of increases in unemployment explained by the pre-crisis structure  of the economy, in particular the share of construction in regional value  added, which is strongly related both to build-up and the burst of the  crisis. Our results imply that crisis-driven economic insecurity is a  substantial driver of populism and political distrust.

   Keywords: crisis; Europe; Immigration; industrial structure; populism;

    Trust; voting

   JEL: A13 E02 F02 F22 F33 J15 O43

URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:12444&r=soc

2. Laws and Norms: Experimental Evidence with Liability Rules

   Claude-Denys Fluet

   Romain Espinosa

   Bruno Deffains

 We conduct an experiment where participants choose between actions that  provide private benefits but may also impose losses on strangers. Three legal  environments are compared: no law, strict liability for the harm caused to  others, and an efficiently designed negligence rule where damages are paid  only when the harmful action causes a net social loss. Legal obligations are  either perfectly enforced (Severe Law) or only weakly so (Mild Law), i.e.,  material incentives are then nondeterrent. We investigate how legal  obligations and social norms interact. Our results show that liability rules  strengthen pro-social behavior and suggest that strict liability has a  greater effect than the negligence rule.

   Keywords: Behavioral law and economics, liability rules, Social norms,

    social preferences, legal norms

   JEL: C91 K13 D03

URL: http://d.repec.org/n?u=RePEc:lvl:crrecr:1705&r=soc

3. Resistance to Institutions and Cultural Distance: Brigandage in

    Post-Unification Italy

   Giampaolo Lecce (Cowles Foundation, Yale University)

   Laura Ogliari (Bocconi University)

   Tommaso Orlando (Bank of Italy)

 We study how cultural distance affects the rejection of imposed institutions.

 To do so, we exploit the transplantation of Piedmontese institutions on  Southern Italy that occurred during the Italian unification. We assemble a  novel and unique dataset containing municipal-level information on episodes  of brigandage, a form of violent uprising against the unitary government. We  use the geographic distance from local settlements of Piedmontese descent as  a proxy for the cultural distance between each municipality and the new  rulers. We find robust evidence that cultural distance from the origins of  the transplanted institutions is significantly associated with more intense  resistance to these institutions. Our results further suggest that the  rejection of the transplanted institutions may have a long-lasting effect on  political participation.

   Keywords: Institutions, Institutional Transplantations, Culture, Social

    Unrest, Electoral Turnout

   JEL: N43 D74 P16 Z10

URL: http://d.repec.org/n?u=RePEc:cwl:cwldpp:2097r&r=soc

4. Social capital, resilience and regional diversification in Italy

   Roberto Antonietti

   Ron Boschma

 There is increasing interest in the question how institutions affect regional  diversification, especially in times of economic crisis. This paper  investigates the role of social capital for the entry of new industries and  the exits of existing industries in Italian provinces during the 2004-2010  period. Our results show that bridging social capital in a region positively  contributes to the entry of new industries, especially when they are  unrelated to existing specializations in the region. Diversification in  regions (especially more unrelated diversification) tends to rely on  bridging, not on bonding social capital. We also find that bridging social  capital loses its impact on regional diversification during the crisis.

 Bonding, not bridging social capital, appears to make regions resilient in  times of crisis, by reducing the probability of exit, especially in  industries unrelated to existing specializations in regions. While bridging  social capital has a negative effect on exit in times of prosperity, it shows  no such effect anymore during the crisis period. Our findings suggest that  bridging social capital loses its supportive role in times of crisis.

   Keywords: bonding social capital, bridging social capital, regional

    diversification, resilience, economic crisis, Italy

   JEL: R11 O14 D02

URL: http://d.repec.org/n?u=RePEc:egu:wpaper:1804&r=soc

5. Ethnic Diversity and Political Participation: The Role of Individual Income

   Giorgio Bellettini

   Carlotta Berti Ceroni

   Chiara Monfardini

 We exploit a unique dataset merging data on individual socio-economic  characteristics and political participation in an Italian municipality to  investigate the relationship between ethnic diversity in residential  neighborhoods and individuals’ propensity to vote. We document a sizable  negative impact of diversity on overall electoral turnout which reflects  differential effects at the individual level, depending on household  equivalent income. Specifically, we show that ethnic heterogeneity in the  neighborhood reduces the political participation of the poor, while it  fosters that of the more affluent. These results highlight a potential  democratic deficit stemming from reduced and unequal electoral turnout in  increasingly ethnically heterogeneous neighborhoods.

   Keywords: ethnic heterogeneity, electoral turnout, income

   JEL: D72

URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_6772&r=soc

6. Trust and Growth Revisited

   Simplice Asongu (Yaoundé/Cameroun)

   Oasis Kodila-Tedika (Kinshasa, Democratic Republic of Congo)  The paper extends Breggren et al. (2008, EE) on ‘trust and growth: a shaky  relationship” by incorporating recent developments in the trust-growth  literature and using a robust methodological underpinning that accounts for  the presence of outliers. The empirical evidence is based on 63 countries.

 Two main findings are established. First, the substantially documented  positive trust-growth nexus is broadly confirmed. Second, when initial levels  of growth come into play in determining the relationship, only the 25th  quartile and 90th decile confirm the positive nexus. The results suggest that  the trust-growth nexus cannot be generalized for all countries as some  previous studies have concluded. Accordingly, trust-growth policies should be  contingent on existing levels of development and tailored differently across  rich and poor countries.

   Keywords: Trust; Growth; Conditional Effects

   JEL: A13 O40 Z13

URL: http://d.repec.org/n?u=RePEc:agd:wpaper:17/054&r=soc

7. Cities and the Structure of Social Interactions: Evidence from Mobile Phone

    Data

   Büchel, Konstantin (University of Bern and CRED)

   Ehrlich, Maximilian v. (‡University of Bern, CAGE, CRED, and CESifo)  Social interactions are considered pivotal to agglomeration economies. We  explore a unique dataset on mobile phone calls to examine how distance and  population density shape the structure of social interactions. Exploiting an  exogenous change in travel times, we find that distance is highly detrimental  to interpersonal exchange. We show that, despite distance-related costs,  urban residents do not benefit from larger networks when spatial sorting is  accounted for. Higher density rather generates a more efficient network in  terms of matching and clustering. These differences in network structure  capitalize into land prices, corroborating the hypothesis that agglomeration  economies operate via network efficiency.Keywords: Economic Geography;  Agglomeration Economies; Social Interactions; Network Analysis; Spatial  Sorting JEL Classification: R10; R23; D83; D85; Z13.creation-date: 2018

URL: http://d.repec.org/n?u=RePEc:cge:wacage:356&r=soc

8. Demonetisation, Social Networks and Social Protection: Insights from Rural

    Tamil Nadu

   Isabelle Guérin (IRD, CESSMA (Paris, France), IFP (Pondicherry, India))

   Youna Lanos (IRD, UMR 225 DIAL, PSL, Université Paris Dauphine, LEDa)

   Sébastien Michiels (IRD, UMR 225 DIAL, PSL, Université Paris Dauphine,

    LEDa, IFP (Pondicherry, India))

   Christophe Jalil Nordman (IRD, UMR 225 DIAL, PSL, Université Paris

    Dauphine, LEDa, IFP (Pondicherry, India))

   Govindan Venkatasubramanian (IFP (Pondicherry, India))  The demonetisation that took place in India in November 2016 caused an  unprecedented shock. Among its other objectives, the measure was championed  as an efficient means to promote a less-cash economy, in order to formalise  economic transactions and boost social protection. This paper draws on  ground-breaking data from rural South India to voice serious reservations  over those stated goals. In the short run, the importance of cash in the  Indian economy resulted in this measure strongly affecting employment, daily  financial practices, and social network use for over three months. People  came to rely more strongly on their networks to sustain their economic and  social activities. Demonetisation has not fought, but has largely  strengthened the informal economy. It has also probably further marginalised  those without supportive networks. In a context such as India, where state  social protection is weak and governmental schemes are notoriously subject to  patronage and clientelistic networks, dense networks of supportive relatives,  friends and patrons remain key for safeguarding daily life and the future. It  can only be counterproductive to eliminate such arrangements without offering  alternative protection. With cashless policies flourishing in various parts  of the world, we believe our findings have major implications, seriously  questioning their merit, especially among the most marginalised segments of  the population.

   Keywords: Demonetisation, Digitalisation, Social Regulation, Social

    Networks, Tamil Nadu, Caste and Gender Segmentation,

   JEL: J16 J24 J31 J71 C21 O12

URL: http://d.repec.org/n?u=RePEc:dia:wpaper:dt201710&r=soc

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