In this issue we feature 13 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 - Yann Algan; Sergei Guriev; Elias Papaioannou; Evgenia Passari
2. The Institutional Foundations of Religious Politics: Evidence from Indonesia - Samuel Bazzi; Gabriel Koehler-Derrick; Benjamin Marx 
3. Trust and Law in Credit Markets - Asano, Koji
4. Financial Trust in Social Economic Network and Credit Risk - Muduli, Silu; Dash, Shridhar Kumar
5. Interacting collective action problems in the commons - Nicolas Querou
6. Altruism and Risk Sharing in Networks - Renaud Bourles; Yann Bramoulle; Eduardo Perez-Richet
7. Pro-environmental norms and subjective well-being: panel evidence from the UK - Martin Binder; Ann-Kathrin Blankenberg; Heinz Welsch
8. Giving Once, Giving Twice: A Two-Period Field Experiment on Intertemporal Crowding in Charitable Giving - Adena, Maja; Huck, Steffen
9. Do farmers follow the herd? The influence of social norms in the participation to agri-environmental schemes - Philippe Le Coent; Rapha?le Preget; Sophie Thoyer
10. Racial Bias and In-group Bias in Judicial Decisions: Evidence from Virtual Reality Courtrooms - Samantha Bielen; Wim Marneffe; Naci H. Mocan
11. Culture and collateral requirements: Evidence from developing countries - Panagiota Papadimitri; Fotios Pasiouras; Menelaos Tasiou
12. Dishonesty, Social Information, and Sorting - Akin, Zafer
13. A Model of Competing Narratives - Kfir Eliaz; Ran Spiegler

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 1. The European Trust Crisis and the Rise of Populism

   Yann Algan (D?partement d'?conomie); Sergei Guriev (D?partement

    d'?conomie); Elias Papaioannou (London Business School (LBS)); Evgenia

    Passari (Universit? Paris-Dauphine)

  We study the implications of the Great Recession for voting for

  antiestablishment 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 nonmainstream parties,

  especially populist ones. Moreover, unemployment increases in tandem with

  declining trust toward national and European political institutions, though

  we find only weak or no effects of unemployment on interpersonal trust. The

  correlation between unemployment and attitudes toward immigrants is muted,

  especially for their cultural impact. To explore causality, we extract the

  component of increases in unemployment explained by the precrisis structure

  of the economy, in particular the share of construction in regional value

  added, which is strongly related both to the buildup preceding and the

  bursting of the crisis. Our results imply that crisis-driven economic

  insecurity is a substantial determinant of populism and political distrust.

   Date: 2017

 URL: http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/2i9jel1usb85nr2j7tejsaldfu&r=soc

 

 2. The Institutional Foundations of Religious Politics: Evidence from

     Indonesia

   Samuel Bazzi (Boston University (Boston, Massachusetts) (BU)); Gabriel

    Koehler-Derrick (Harvard University); Benjamin Marx

  Why do religious politics thrive in some societies but not others? This

  paper explores the institutional foundations of this process in Indonesia,

  the world?s largest Muslim democracy. We show that a major Islamic

  institution, the waqf, fostered the entrenchment of political Islam at a

  critical historical juncture. In the early 1960s, rural elites transferred

  large amounts of land into waqf?a type of inalienable charitable trust?to

  avoid expropriation by the government as part of a major land reform effort.

  Although the land reform was later undone, the waqf properties remained. We

  show that greater intensity of the planned reform led to more prevalent waqf

  land and Islamic institutions endowed as such, including religious schools,

  which are strongholds of the Islamist movement. We identify lasting effects

  of the reform on electoral support for Islamist parties, preferences for

  religious candidates, and the adoption of Islamic legal regulations

  (sharia). Overall, the land reform contributed to the resilience and

  eventual rise of political Islam by helping to spread religious

  institutions, thereby solidifying the alliance between local elites and

  Islamist groups. These findings shed new light on how religious institutions

  may shape politics in modern democracies.

   JEL: D72 D74 P16 P26 Z12

   Date: 2018?10

 URL: http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/71lh5oncqk84tbb1d1a8gujtq6&r=soc

 

 3. Trust and Law in Credit Markets

   Asano, Koji

  This study examines the coevolution of trust and legal institutions in a

  model of competitive credit markets plagued by asymmetric information. When

  entrepreneurs' relative payoff to productive activities versus cheating is

  private information, uncivic ones, who intend to cheat, can enter credit

  markets and be cross-subsidized by civic ones, who engage in productive

  activities. To exploit this benefit, uncivic entrepreneurs demand weak legal

  enforcement through the political process. This rent-seeking behavior

  interacts with the formation of trust, generating an underdevelopment trap

  with weak enforcement and distrust. Technological advancement may encourage

  entrepreneurs' rent-seeking and aggravate distrust.

   JEL: O10 O16 Z13

   Keywords: culture, institutions, financial development, adverse selection

   Date: 2018?12?13

 URL: http://d.repec.org/n?u=RePEc:pra:mprapa:90482&r=soc

 

 4. Financial Trust in Social Economic Network and Credit Risk

   Muduli, Silu; Dash, Shridhar Kumar

  Paper models lender?s decision based on project riskiness, trust from

  borrower?s socioeconomic network, and social cost of default for the

  borrower. The paper suggests a methodology to estimate aggregate level of

  trustworthiness of borrower in socio-economic network. Our model links the

  social cost of default to credit default. A relatively safer project

  executed by a borrower with lower social cost of default is likely to be a

  willful defaulter. Similarly, relatively safer project executed by a

  borrower with high social cost of default is likely to pay-back the loan.

   JEL: D85 G21 L14

   Keywords: Social Economic Network,Trust,Credit Risk

   Date: 2019

 URL: http://d.repec.org/n?u=RePEc:zbw:esprep:190918&r=soc

 

 5. Interacting collective action problems in the commons

   Nicolas Querou (CEE-M - Centre d'Economie de l'Environnement - Montpellier

    - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM -

    Universit? de Montpellier - CNRS - Centre National de la Recherche

    Scientifique - Montpellier SupAgro - Institut national d??tudes

    sup?rieures agronomiques de Montpellier)

  We consider a setting where agents are subject to two types of collective

  action problems, any group user's individual extraction inducing an

  externality on others in the same group (intra-group problem), while

  aggregate extraction in one group induces an externality on each agent in

  other groups (intergroup problem). One illustrative example of such a

  setting corresponds to a case where a common-pool resource is jointly

  extracted in local areas, which are managed by separate groups of

  individuals extracting the resource in their respective location. The

  interplay between both types of externality is shown to affect the results

  obtained in classical models of common-pool resources. We show how the

  fundamentals affect the individual strategies and welfare compared to the

  benchmark commons problems. Finally, different initiatives (local

  cooperation, inter-area agreements) are analyzed to assess whether they may

  alleviate the problems, and to understand the conditions under which they do

  so.

   Keywords: externalities,common-pool resource,collective action

   Date: 2018

 URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01936007&r=soc

 

 6. Altruism and Risk Sharing in Networks

   Renaud Bourl?s (AMSE - Aix-Marseille Sciences Economiques - EHESS - ?cole

    des hautes ?tudes en sciences sociales - AMU - Aix Marseille Universit? -

    ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche

    Scientifique); Yann Bramoull? (AMSE - Aix-Marseille Sciences Economiques -

    EHESS - ?cole des hautes ?tudes en sciences sociales - AMU - Aix Marseille

    Universit? - ECM - Ecole Centrale de Marseille - CNRS - Centre National de

    la Recherche Scientifique); Eduardo Perez-Richet (IEP Paris - Sciences Po

    Paris - Institut d'?tudes politiques de Paris, CEPR)

  We provide the first analysis of the risk-sharing implications of altruism

  networks. Agents are embedded in a fixed network and care about each other.

  We study whether altruistic transfers help smooth consumption and how this

  depends on the shape of the network. We identify two benchmarks where

  altruism networks generate efficient insurance: for any shock when the

  network of perfect altruism is strongly connected and for any small shock

  when the network of transfers is weakly connected. We show that the extent

  of informal insurance depends on the average path length of the altruism

  network and that small shocks are partially insured by endogenous

  risk-sharing communities. We uncover complex structural effects. Under iid

  incomes, central agents tend to be better insured, the consumption

  correlation between two agents is positive and tends to decrease with

  network distance, and a new link can decrease or increase the consumption

  variance of indirect neighbors. Overall, we show that altruism in networks

  has a first-order impact on risk and generates specific patterns of

  consumption smoothing.

   Keywords: altruism,networks,risk sharing,informal insurance

   Date: 2018?11

 URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01943862&r=soc

 

 7. Pro-environmental norms and subjective well-being: panel evidence from

     the UK

   Martin Binder (Bard College Berlin); Ann-Kathrin Blankenberg; Heinz Welsch

    (University of Oldenburg, Department of Economics)

  Tying in with a small number of studies on green norms, identity and

  subjective well-being, this paper studies the relationship between holding a

  green self-image and life satisfaction in the UK. Focusing on (sub-national)

  regions as the unit of reference, we investigate if and how the

  individual-level greenness-satisfaction relationship varies with measures of

  the prevalence and distribution (disparity) of greenness at the regional

  level, taking these measures as indicators of a green social norm. Two key

  findings emerge from our analysis. First, life satisfaction is negatively

  related to the regional-level mean (prevalence) and positively related to

  the regional-level diversity of greenness, while being unrelated to the

  degree of polarization of greenness. Taking the prevalence as a direct and

  diversity as an inverse measure of the validity of a greenness norm, these

  results are consistent with the idea that the norm is experienced (by

  greens) as a standard of reference in the process of green status

  competition or (by non-greens) as a source of social pressure. Second, the

  well-being benefits from holding a greener self-image are unrelated to the

  prevalence and diversity of greenness, but positively related to the

  polarization of greenness for those either very green or not green at all.

  This is consistent with the idea that green self-image yields well-being

  benefits through identity, that is, by identifying with the own group and

  differentiating oneself from other groups ? a possibility that relies on

  sufficiently large differentiation/polarization of groups. We discuss

  differences between these results and previous findings based on measures of

  nation-wide prevalence and disparity of greenness.

   Keywords: subjective well-being, norms, green behavior, green self-image,

    fractionalization, polarization

   Date: 2019?01

 URL: http://d.repec.org/n?u=RePEc:old:dpaper:417&r=soc

 

 8. Giving Once, Giving Twice: A Two-Period Field Experiment On

     Intertemporal Crowding in Charitable Giving

   Adena, Maja (WZB Berlin); Huck, Steffen (WZB Berlin and University College

    London)

  We study intertemporal crowding between two fundraising campaigns for the

  same charitable organization by manipulating donors\' beliefs about the

  likelihood of future campaigns in two subsequent field experiments. The data

  shows that initial giving is decreasing in the likelihood of a future

  campaign while subsequent giving increases in initial giving. While this

  refutes the predictions of a simple expected utility model, the pattern is

  in line with a model that allows for (anticipated or unanticipated) habit

  formation provided that donations in the two periods are substitutes.

   JEL: C93 D64 D12

   Keywords: charitable giving; field experiments; intertemporal crowding;

   Date: 2018?12?20

 URL: http://d.repec.org/n?u=RePEc:rco:dpaper:130&r=soc

 

 9. Do farmers follow the herd? The influence of social norms in the

     participation to agri-environmental schemes.

   Philippe Le Coent (CEE-M - Centre d'Economie de l'Environnement -

    Montpellier - FRE2010 - INRA - Institut National de la Recherche

    Agronomique - UM - Universit? de Montpellier - CNRS - Centre National de

    la Recherche Scientifique - Montpellier SupAgro - Institut national

    d??tudes sup?rieures agronomiques de Montpellier); Rapha?le Preget (CEE-M

    - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA -

    Institut National de la Recherche Agronomique - UM - Universit? de

    Montpellier - CNRS - Centre National de la Recherche Scientifique -

    Montpellier SupAgro - Institut national d??tudes sup?rieures agronomiques

    de Montpellier); Sophie Thoyer (CEE-M - Centre d'Economie de

    l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la

    Recherche Agronomique - UM - Universit? de Montpellier - CNRS - Centre

    National de la Recherche Scientifique - Montpellier SupAgro - Institut

    national d??tudes sup?rieures agronomiques de Montpellier)

  This article analyses the role played by social norms in farmers' decisions

  to enroll into an agri-environmental scheme (AES). First, it develops a

  simple theoretical model highlighting the interplay of descriptive and

  injunctive norms in farmers' utility functions. Second, an empirical

  valuation of the effect of social norms is provided based on the results of

  a stated preference survey conducted with 98 wine-growers in the South of

  France. Proxies are proposed to capture and measure the weight of social

  norms in farmers' decision to sign an agri-environmental contract. Our

  empirical results indicate that the injunctive norm seems to play a stronger

  role than the descriptive norm.

   Keywords: agri-environmental contracts,behaviour,social norms

   Date: 2018

 URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01936004&r=soc

 

10. Racial Bias and In-group Bias in Judicial Decisions: Evidence from

     Virtual Reality Courtrooms

   Samantha Bielen; Wim Marneffe; Naci H. Mocan

  We shot videos of criminal trials using 3D Virtual Reality (VR) technology,

  prosecuted by actual prosecutors and defended by actual defense attorneys in

  an actual courtroom. This is the first paper that utilizes VR technology in

  a non-computer animated setting, which allows us to replace white defendants

  in the courtroom with individuals who have Middle Eastern or North African

  descent in a real-life environment. We alter only the race of the defendants

  in these trials, holding all activity in the courtroom constant

  (http://proficient.ninja/splitscreen/). Law students, economics students and

  practicing lawyers are randomly assigned to watch with VR headsets, from the

  view point of the judge, the trials that differed only in defendants? skin

  color. Background information obtained from the evaluators allowed us to

  identify their cultural heritage. Evaluators made decisions on

  guilt/innocence in these burglary and assault cases, as well as prison

  sentence length and fine in accordance with the guidelines provided by the

  relevant law. There is suggestive evidence of negative in-group bias in

  conviction decisions where evaluators are harsher against defendants of

  their own race. There is, however, significant overall racial bias in

  conviction decisions against minorities. In the sentencing phase, we find

  in-group favoritism in prison times and fines, driven by white evaluators.

  This translates into overall racial bias against minority defendants in

  prison sentences and fines. We find only scant evidence that the concerns of

  the evaluators about terrorism, about immigration, or their trust in the

  judiciary or the police have an impact on their judicial decisions,

  suggesting that the source of the bias may be deep-rooted. Merging a small

  sample of judges and prosecutors with the sample of lawyers provides very

  similar results as those obtained from the analysis of lawyers.

   JEL: K4 Z1

   Date: 2018?12

 URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:25355&r=soc

 

11. Culture and collateral requirements: Evidence from developing

     countries

   Panagiota Papadimitri (Portsmouth Business School); Fotios Pasiouras

    (Montpellier Business School); Menelaos Tasiou (Portsmouth Business School)

  We study the relationship between culture and the use of collateral in

  corporate borrow- ing. Using a dataset of over 14,000 firms from 70

  transition and developing countries, we find evidence that the likelihood to

  pledge collateral is lower in countries with higher un- certainty avoidance

  and corporate ethical behavior. In contrast, long-term orientation and

  individualism enhance the likelihood to use collateral. These results hold

  when using sub- samples and further controls for various firm and

  country-specific attributes. Additional analysis reveals that culture

  influences not only the likelihood to pledge collateral but also its type

  (movable versus non-movable) and its value relative to the value of the loan.

   JEL: G21 G32

   Keywords: Culture, Ethics, Collateral

   Date: 2019?01?09

 URL: http://d.repec.org/n?u=RePEc:pbs:ecofin:2019-04&r=soc

 

12. Dishonesty, Social Information, and Sorting

   AKIN, ZAFER

  The dishonesty literature investigates how people behave when they are

  provided certain types of information. However, this approach predominantly

  ignores the fact that people -to some extent- can choose which information

  they want to be exposed to. By conducting a laboratory experiment, we study

  individuals? decisions to choose which social information they would like to

  observe and the effect of this sorting on their engagement in unethical

  conduct. We find evidence that sorting exacerbates the prevalence of

  dishonesty, which is mainly driven by the ones who chose maximum

  information. Our results demonstrate that sorting is an important factor

  determining dishonest behavior and that previously observed levels of

  prevalence of dishonesty in the literature can be an underestimate of actual

  level of dishonest behavior in real-world situations.

   JEL: C91 D03

   Keywords: Dishonesty; social norms; selection; laboratory experiments

   Date: 2018?08?01

 URL: http://d.repec.org/n?u=RePEc:pra:mprapa:90412&r=soc

 

13. A Model of Competing Narratives

   Kfir Eliaz; Ran Spiegler

  We formalize the argument that political disagreements can be traced to a

  "clash of narratives". Drawing on the "Bayesian Networks" literature, we

  model a narrative as a causal model that maps actions into consequences,

  weaving a selection of other random variables into the story. An equilibrium

  is defined as a probability distribution over narrative-policy pairs that

  maximizes a representative agent's anticipatory utility, capturing the idea

  that public opinion favors hopeful narratives. Our equilibrium analysis

  sheds light on the structure of prevailing narratives, the variables they

  involve, the policies they sustain and their contribution to political

  polarization.

   Date: 2018?11

 URL: http://d.repec.org/n?u=RePEc:arx:papers:1811.04232&r=soc

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