In this issue we feature 9 current papers on the theme of social capital:

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In this issue we have:

1. Regional Economic Development, Social Capital and Governance: A Comparative Institutional Analysis France - Sweden - Karlsson, Charlie; Rouchy, Philippe

2. The educational roots of trust - Francesca Borgonovi; Tracey Burns

3. Cultural Norms, the Persistence of Tax Evasion, and Economic Growth - Dimitrios Varvarigos

4. Social Interactions, Mechanisms, and Equilibrium: Evidence from a Model of Study Time and Academic Achievement - Tim Conley; Nirav Mehta; Ralph Stinebrickner; Todd Stinebrickner

5. Social preferences, culture and corruption - Jiang, T.

6. Wage Dynamics and Peer Referrals - Vincent Boucher; Marion Goussé

7. The network at work: Diffusion of banana cultivation in Tanzania - Anna Folke Larsen

8. Does It Matter Where You Came From? Ancestry Composition and Economic Performance of U.S. Counties, 1850-2010 -  Fulford, Scott L.; Petkov, Ivan; Schiantarelli, Fabio

9. Peer Effects in Endogenous Networks - Timo Hiller; Timo Hiller

1. Regional Economic Development, Social Capital and Governance: A Comparative Institutional Analysis France - Sweden

   Karlsson, Charlie (Centre of Excellence for Science and Innovation Studies

    (CESIS), Jönköping International Business School & Blekinge Institute of

    Technology)

   Rouchy, Philippe (Blekinge Institute of Technology)  The purpose of this paper is to consider how social capital enhance or hamper  regional economic development due to governance systems. To answer this  question, we take a comparative institutional perspective between France and  Sweden based on OECD regional outlook indicators. It comprises 1- a  comparison of both countries regional and municipal governances; 2- a  definition of social capital as a social utility function of region or  localities, i.e. their “social atmosphere”. 3- A comparison of the  participation rate in interest groups in both countries indicating a  propensity to collaborate with institutions. The result of the paper shows a  differential intensity of participation to interest groups between France and  Sweden and an effect of local political institutions on countries’ “social  atmosphere”. In conclusion, we show differential values between France and  Sweden in terms of political ethics supporting the formation of social  capital. We suggest policy implication to increase entrepreneurial solution  in civil society.

   Keywords: Comparative Institutional Analysis; Regional Development; Social

    Capital; Governance; Interest Groups; Public Choice; Cooperation

   JEL: A14 B25 D70 O17 P48 R11 R58

URL: http://d.repec.org/n?u=RePEc:hhs:cesisp:0406&r=soc

2. The educational roots of trust

   Francesca Borgonovi

   Tracey Burns

Trust is important for social and economic well-being, for enhancing social  cohesion and strengthening resilience, and for maintaining security and order  in our societies. Trust is the foundation upon which social capital is built  and it also is intimately related to human capital. This work examines the  association between education and levels of interpersonal trust, using data  from the OECD’s Survey of Adult Skills (PIAAC). Our analysis demonstrated  that education strengthens the cognitive and analytical capacities needed to  develop, maintain, and (perhaps) restore trust in both close relationships as  well as in anonymous others. It does so both directly, through building and  reinforcing literacy and numeracy in individuals, and indirectly, through  facilitating habits and reinforcing behaviours such as reading and writing at  home and at work. Education and trust are thus fundamentally intertwined and  dependent on each other. While all countries across the OECD have been  striving to improve their education systems in terms of student achievement  levels, this analysis suggests that there are also concrete elements that  could be usefully addressed in order to reinforce and strengthen trust.

La  confiance est un élément important du bien-être social et économique, qui  permet de renforcer la cohésion sociale et la résilience tout en maintenant  la sécurité et l’ordre dans nos sociétés. La confiance est le fondement sur  lequel repose le capital social et elle est également liée intimement au  capital humain. Ces travaux ont pour objectif d’examiner le rapport entre  l’éducation et les niveaux de confiance interpersonnelle, grâce aux données  de l’étude de l’OCDE intitulée Programme pour l'évaluation internationale des  adultes (PIAAC). Notre analyse a démontré que l’éducation renforçait les  capacités cognitives et analytiques nécessaires au développement, au maintien  et (éventuellement) à la restauration de la confiance, à la fois dans les  relations avec les proches et dans les relations avec le reste du monde. Elle  le fait directement, en inculquant et en renforçant l’apprentissage en  lecture, écriture et calcul de chacun et aussi indirectement, en facilitant  l’accès et en incitant à la lecture et à l’écriture aussi bien à la maison  que sur le lieu de travail. De ce fait, éducation et confiance sont  intimement liés et interdépendantes. S’il est vrai que tous les pays de  l’OCDE se sont efforcés d’améliorer leurs systèmes éducatifs en termes de  niveaux de réussite des élèves, cette analyse montre qu’il existe aussi des  éléments concrets qui peuvent être efficacement utilisés pour asseoir et  renforcer la confiance.

URL: http://d.repec.org/n?u=RePEc:oec:eduaab:119-en&r=soc

3. Cultural Norms, the Persistence of Tax Evasion, and Economic Growth

   Dimitrios Varvarigos

I study the effects of tax evasion on economic growth by focusing on the  cultural aspects of tax compliance and their effect on the extensive margin  of tax evasion. A cultural norm that determines the contemptibility of tax  dodging practices links the past incidence of tax evasion with the tax  payers’ current incentives to conceal sources of income. This dynamic  complementarity may lead to multiple equilibria in the evolution of tax  evasion. Due to the latter’s effect on capital accumulation, this  multiplicity may lead economies in divergent development paths, as long as  they differ in the initial magnitude of tax evasion. This happens even though  economies may be, on the outset, identical in terms of capital stock and  structural characteristics, including those that govern tax enforcement.

   Keywords: Tax evasion; Economic Growth; Cultural Norms

   JEL: H26 O41 Z1

URL: http://d.repec.org/n?u=RePEc:lec:leecon:15/10&r=soc

4. Social Interactions, Mechanisms, and Equilibrium: Evidence from a Model of Study Time and Academic Achievement

   Tim Conley (University of Western Ontario)

   Nirav Mehta (University of Western Ontario)

   Ralph Stinebrickner (Berea College)

   Todd Stinebrickner (University of Western Ontario)  We develop and estimate an equilibrium model of study time choices of  students on a social network. We examine how network structure interacts with  student characteristics to affect academic achievement. Due to data  limitations, few papers examine the mechanisms through which peer effects  operate. The model is designed to exploit unique data collected in the Berea  Panel Study. Study time data allow us to quantify an intuitive mechanism for  social interactions: the cost of own study time may depend on friend study  time. Social network data allow study time choices and resulting academic  achievement to be embedded in an equilibrium framework. We find friend study  time strongly affects own study time, and, therefore, student achievement.

 Not taking into account equilibrium behavior would drastically understate the  effect of peers. Sorting on friend characteristics appears important in  explaining variation across students in study time and achievement, and  determines the aggregate achievement level.

   Keywords: Social Networks; Peer Effects; Homophily; Time-use

URL: http://d.repec.org/n?u=RePEc:uwo:hcuwoc:20154&r=soc

5. Social preferences, culture and corruption

   Jiang, T. (Tilburg University, School of Economics and Management)  Neoclassical economics more or less postulates that agents tend to maximize  their own narrow self-interests and will hence break the law if the gains  outweigh the costs of potential punishment. In this thesis, I argue that more  understandings of corruption can be obtained incorporating insights from  behavioral economics such as the postulates of social preferences. To  understand why, and in what context, an individual decides to be corrupt, and  in what context, it is helpful to recognize that economic agents care about  not only their own narrow-interests, but also others’ payoff consequences as  well as their moral image. I argue that the characteristics of other  regarding preferences (synonymously as social preferences in Economics, and  social value<br/>orientation in Psychology) are relevant factors of  decision-making in general, and corrupt decision making is no exception. More  effective policies can be designed if we gain more realistic behavioral  insights.<br/>

URL: http://d.repec.org/n?u=RePEc:tiu:tiutis:488aa1b0-f588-4c1b-8a85-de8844ab8879&r=soc

6. Wage Dynamics and Peer Referrals

   Vincent Boucher

   Marion Goussé

 We present a flexible model of wage dynamics where information about job  openings is transmitted through social networks. The model is based on  Calvó-Armengol & Jackson (2004, 2007) and extends their results outside the  stationary distribution, and under observed and unobserved heterogeneity. We  present an empirical application using the British Household Panel Survey by  exploiting direct information about individual’s social networks. We find  that the distribution of job offers is positively affected by the employment  status of an individual’s friends, and that this relationship is stronger for  women.

   Keywords: Labour Market, Peer Referrals, Social Networks

   JEL: C33 J31

URL: http://d.repec.org/n?u=RePEc:lvl:lacicr:1514&r=soc

7. The network at work: Diffusion of banana cultivation in Tanzania

   Anna Folke Larsen (Department of Economics, University of Copenhagen)  This paper investigates the role of networks for diffusion of improved banana  cultivation introduced by an agricultural project in Tanzania. In the  existing literature on networks and technology adoption, network effects are  interpreted as learning. I show that a farmer's network can affect the  adoption of a new crop not only through social learning, but also by  providing necessary inputs for adoption. I set up a simple model for adoption  and derive similar model implications for the provision of either inputs or  information through the network. Empirically, I find that a farmer is 37  percentage points more likely to adopt banana cultivation if there is at  least one project participant growing bananas in the farmer's network. I use  three falsication tests to support causal interpretation of the network  effect on adoption. Provision of inputs (banana seedlings) through networks  is found to play an important role for the network effects found.

   Keywords: Technology adoption, networks, agriculture, Tanzania, Africa

   JEL: D83 O13 O33 Q12 Q16

URL: http://d.repec.org/n?u=RePEc:kud:kuieca:camwp2015_01&r=soc

8. Does It Matter Where You Came From? Ancestry Composition and Economic Performance of U.S. Counties, 1850-2010

   Fulford, Scott L. (Boston College)

   Petkov, Ivan (Boston College)

   Schiantarelli, Fabio (Boston College)  The United States provides a unique laboratory for understanding how the  cultural, institutional, and human capital endowments of immigrant groups  shape economic outcomes. In this paper, we use census micro-sample  information to reconstruct the country-of-ancestry distribution for US  counties from 1850 to 2010. We also develop a county-level measure of GDP per  capita over the same period. Using this novel panel data set, we investigate  whether changes in the ancestry composition of a county matter for local  economic development and the channels through which the cultural,  institutional, and educational legacy of the country of origin affects  economic outcomes in the US. Our results show that the evolution of the  country-of-origin composition of a county matters. Moreover, the culture,  institutions, and human capital that the immigrant groups brought with them  and pass on to their children are positively associated with local  development in the US. Among these factors, measures of culture that capture  attitudes towards cooperation play the most important and robust role.

 Finally, our results suggest that while fractionalization of ancestry groups  is positively related with county GDP, fractionalization in attributes such  as trust, is negatively related to local economic performance.

   Keywords: immigration, ethnicity, ancestry, economic development, culture,

    institutions, human capital

   JEL: J15 N31 N32 O10 Z10

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9060&r=soc

9. Peer Effects in Endogenous Networks

   Timo Hiller

   Timo Hiller

 This paper presents a simple model of strategic network formation with local  complementarities in effort levels and positive local externalities for a  general class of payoff functions. Results are obtained for one-sided and  two-sided link creation. In both cases (pairwise) Nash equilibrium networks  are nested split graphs, which are a strict subset of core-periphery  networks. The relevance of the convexity of the value function (gross payoffs  as a function of neighbours' effort levels when best responding) in obtaining  nested split graphs is highlighted. Under additional assumptions on payoffs,  we show that the only efficient networks are the complete and the empty  network. Furthermore, there exists a range of linking cost such that any

 (pairwise) Nash equilibrium is inefficient and for a strict subset of this  range any (pairwise) Nash equilibrium network structure is different from the  efficient network. These findings are relevant for a wide range of social and  economic phenomena, such as educational attainment, criminal activity, labor  market participation, and R&D expenditures of firms.

   Keywords: Strategic network formation, peer effects, strategic complements,

    positive externalities.

   JEL: D62 D85

URL: http://d.repec.org/n?u=RePEc:cep:stitep:564&r=soc

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