In this issue we feature 10 current papers on the theme of social capital:

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In this issue we have:

1. Social Mobility and Stability of Democracy: Re-evaluating De Tocqueville - Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin
2. Sustainability of common pool resources: A field-experimental approach - Raja Timilsina; Koji Kotani; Yoshio Kamijo
3. Corporate Resilience to Banking Crises: The Roles of Trust and Trade Credit - Ross Levine; Chen Lin; Wensi Xie
4. The New Economics of Religion - Sriya Iyer
5. Social Capital and the Repayment of Microfinance Group Lending - Luminita Postelnicu
6. A Glimpse into the World of High Capacity Givers: Experimental Evidence from a University Capital Campaign - Tova Levin; Steven D. Levitt; John A. List
7. Culture, Diffusion, and Economic Development - Harutyunyan, Ani; Özak, Ömer
8. Facebook-to-Facebook: Online Communication and Economic Cooperation - Anna Lou Abatayo; John Lynham; Katerina Sherstyuk
9. Networks of Enterprises and Innovations: Evidence from SMEs in Vietnam Doan, Quang Hung; Vu, Hoang Nam
10. Can there be a market for cheap-talk information? Some experimental evidence - Cabrales, Antonio; Feri, Francesco; Gottardi, Piero; Meléndez-Jiménez, Miguel A.

 1. Social Mobility and Stability of Democracy: Re-evaluating De Tocqueville

    Acemoglu, Daron

    Egorov, Georgy

    Sonin, Konstantin

 An influential thesis often associated with De Tocqueville views social  mobility as a bulwark of democracy: when members of a social group expect to  join the ranks of other social groups in the near future, they should have  less reason to exclude these other groups from the political process. In this  paper, we investigate this hypothesis using a dynamic model of political  economy. As well as formalizing this argument, our model demonstrates its  limits, elucidating a robust theoretical force making democracy less stable  in societies with high social mobility: when the median voter expects to move  up (respectively down), she would prefer to give less voice to poorer  (respectively richer) social groups. Our theoretical analysis shows that in  the presence of social mobility, the political preferences of an individual  depend on the potentially conflicting preferences of her "future selves", and  that the evolution of institutions is determined through the implicit  interaction between occupants of the same social niche at different points in  time. When social mobility is endogenized, our model identifies new political  economic forces limiting the amount of mobility in society - because the  middle class will lose out from mobility at the bottom and because a  peripheral coalition between the rich and the poor may oppose mobility at the  top.

    Keywords: De Tocqueville; democracy; dynamics.; institutions; Social mobility; stability

    JEL: D71 D74

URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:11209&r=soc

 2. Sustainability of common pool resources: A field-experimental approach

    Raja Timilsina (Kochi University of Technology)

    Koji Kotani (School of Economics and Management, Kochi University of

     Technology)

    Yoshio Kamijo (School of Economics and Management, Kochi University of

     Technology)

 Sustainability has become a key issue in managing natural resources together  with growing concerns for capitalism, environmental and resource problems. We  hypothesize that ongoing modernization of competitive societies, which we  call "capitalism," affects human nature and preference in utilizing common  pool resources, further endangering the sustainability. To test the  hypothesis, this paper designs and implements a dynamic common pool resource  game in the two types of Nepalese fields: (i) rural (non capitalistic) and

 (ii) urban (capitalistic) areas. We find that a proportion of prosocial  people in the urban is lower than that in the rural, and urban people deplete  resources more quickly than rural people. The composition of proself and  prosocial people in a group and the degree of capitalism (rural vs. urban)  are crucial in the sense that an increase of prosocial members in a group and  the rural dummy positively affect resource sustainability by approximately  65% and by 45%, respectively. Overall, this paper concludes that when  societies move toward more capitalistic environments, sustainability of  common pool resources tends to be lost through changes in people’s  preferences, social norms, customs and assumptions for other people. It  implies that people may gradually be losing their coordination abilities for  social dilemmas of resource sustainability in capitalistic societies.

    Keywords: sustainability, dynamic common pool resource, capitalism, field experiment

URL: http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2016-6&r=soc

 3. Corporate Resilience to Banking Crises: The Roles of Trust and Trade Credit

    Ross Levine

    Chen Lin

    Wensi Xie

 Are firms more resilient to systemic banking crises in economies with higher  levels of social trust? Using firm-level data in 34 countries from 1990  through 2011, we find that liquidity-dependent firms in high-trust countries  obtain more trade credit and suffer smaller drops in profits and employment  during banking crises than similar firms in low-trust economies. The results  are consistent with the view that when banking crises block the normal  banking-lending channel, greater social trust facilitates access to informal  finance, cushioning the effects of these crises on corporate profits and  employment.

    JEL: D22 G01 G21 G32 Z13

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:22153&r=soc

 4. The New Economics of Religion

    Sriya Iyer

 The economics of religion is a relatively new field of research in economics.

 This survey serves two purposes – it is backward-looking in that it traces  the historical and sociological origins of this field, and it is  forward-looking in that it examines the insights and research themes that are  offered by economists to investigate religion globally in the modern world.

 Several factors have influenced the economics of religion: (1) new  developments in theoretical models including spatial models of religious  markets and evolutionary models of religious traits; (2) empirical work which  addresses innovatively econometric identification in examining causal  influences on religious behavior; (3) new research in the economic history of  religion that considers religion as an independent rather than as a dependent  variable; and (4) more studies of religion outside the Western world. Based  on these developments, this paper discusses four themes – first,  secularization, pluralism, regulation and economic growth; second, religious  markets, club goods, differentiated products and networks; third,  identification including secular competition and charitable giving; and  fourth, conflict and cooperation in developing societies. In reviewing this  paradoxically ancient yet burgeoning field, this paper puts forward  unanswered questions for scholars of the economics of religion to reflect  upon in years to come.

URL: http://d.repec.org/n?u=RePEc:cam:camdae:1544&r=soc

 5. Social Capital and the Repayment of Microfinance Group Lending

    Luminita Postelnicu

 Microfinance Performance and Social Capital: A Cross-country AnalysisThis  paper investigates the relationship between the extent to which social  capital formation is facilitated within different societies, and the  financial and social performance of MFIs. We carry out a cross-country  analysis on a dataset containing 100 countries. We identify different social  dimensions that we use as proxies for how easy social capital can be  developed in different countries, and we hypothesize that microfinance is  more successful, both in terms of their financial and social aims, in  societies that are more conducive to the development of social capital. Our  empirical results support our hypothesis.

 Defining Social Collateral in Microfinance Group Lending: Microfinance group  lending with joint liability allows asset-poor individuals to replace  physical collateral by social collateral. This paper provides a theoretical  framework to evaluate the impact of social collateral pledged by group  borrowers on group lending repayment. We take into account the external ties  of group borrowers, i.e. the social ties linking borrowers to non-borrowers  from their community, whereas previous work in this field has looked solely  at internal ties (i.e. ties between group members). Our model stresses the  impact of network configuration on the amount of social capital pledged as  collateral. It shows why the group lending methodology works better in rural  areas than in urban areas, namely because rural social networks are typically  denser than urban ones, which results in higher social collateral.

 The Economic Value of Social Capital:Empirical studies on the importance of  social capital for poor households show divergent outcomes. This divergence  may stem from the lack of a conceptual framework for capturing the social  capital dimensions that deliver economic value to individuals. This paper  defines individual social capital from an economic perspective and proposes a  measurement based on the two dimensions of individual social capital that  bring economic value to individuals: (1) informal risk insurance arrangements  and (2) information advantages that arise from personal social networks.

 Using this measurement, I present a numerical application to argue that  differing network configurations drive asymmetry of social interactions among  individuals.

 Social Capital and the Repayment of Microfinance Group Lending: A Case Study  of Pro Mujer Mexico:In this paper, we investigate how social networks of  group borrowers come into play in joint liability group lending. We use a  large, original dataset with 802 mapped social networks of borrowers from Pro  Mujer Mexico. We are the first to examine external ties, that is, social ties  with individuals outside the borrowing group. We have two main findings.

 First, borrowers with stronger informal risk insurance arrangements are in  better economic shape and have a higher capacity to pay than borrowers with  weaker informal risk insurance arrangements. Second, borrowers who pledge  valuable ties as social collateral have fewer repayment problems. We  postulate that borrowers receive effective help from their ties in cases of  need.

    Keywords: microfinance; social collateral; social capital; group lending; social capital measurement

URL: http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/223521&r=soc

 6. A Glimpse into the World of High Capacity Givers: Experimental Evidence from a University Capital Campaign

    Tova Levin

    Steven D. Levitt

    John A. List

 The wealthiest 10% of donors now give 90% of charitable dollars in the U.S.,  but little is known about what motivates them. Using a natural field  experiment on over 5,000 high capacity donors, we find persistence in giving  patterns, that signals of program quality influence giving, and that the  price of giving is not unduly important. Unlike typical small donors, our  givers respond only on the intensive margin, and often with a longer time  lag. Our study highlights the value to practitioners of partnering with  academics, as our intervention has generated $30 million in incremental  donations to the University.

    JEL: C93 H4

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:22099&r=soc

 7. Culture, Diffusion, and Economic Development

    Harutyunyan, Ani

    Özak, Ömer

 This research explores the effects of culture on technological diffusion and  economic development. It shows that culture's direct effects on development  and barrier effects to technological diffusion are, in general,  observationally equivalent. In particular, using a large set of cultural  measures, it establishes empirically that pairwise differences in  contemporary development are associated with pairwise cultural differences  relative to the technological frontier, only in cases where observational  equivalence holds. Additionally, it establishes that differences in cultural  traits that are correlated with genetic and linguistic distances are  statistically and economically significantly correlated with differences in  economic development. These results highlight the difficulty of disentangling  the direct and barrier effects of culture, while lending credence to the idea  that common ancestry generates persistence and plays a central role in  economic development.

    Keywords: Comparative economic development, economic growth, culture,

     barriers to technological diffusion, genetic distances, linguistic distances

    JEL: O10 O11 O20 O33 O40 O47 O57 Z10

URL: http://d.repec.org/n?u=RePEc:pra:mprapa:70502&r=soc

 8. Facebook-to-Facebook: Online Communication and Economic Cooperation

    Anna Lou Abatayo (University of Hawaii at Manoa)

    John Lynham (University of Hawaii at Manoa)

    Katerina Sherstyuk (University of Hawaii at Manoa)  Communication is often critical for economic cooperation and enhancement of  trust. Traditionally, direct face-to-face communication has been found to be  more effective than any form of indirect, mediated communication. We study  whether this is still the case given that many people routinely use texting  and online social media to conduct economic transactions. In out laboratory  experiment, groups of participants communicate either (i) face-to-face, (ii)  through the most popular online social network – Facebook, or (iii) using  text messaging, before participating in a public goods or a trust game. While  people talk significantly more under traditional face-to-face, discussion  through Facebook and text messages prove as effective as face-to-face  communication in enhancing cooperation and increasing trust. For all three  media, discussions that focus on the game of use more positive emotion words  are correlated with enhanced trust. It appears that young American adults are  now just as adept at communicating and reducing social distance online as  they are in person.

    Keywords: communication technology; laboratory experiments; public good, games; trust games

    JEL: C91 C92 D03 D71

URL: http://d.repec.org/n?u=RePEc:hae:wpaper:2015-9&r=soc

 9. Networks of Enterprises and Innovations: Evidence from SMEs in Vietnam

    Doan, Quang Hung

    Vu, Hoang Nam

 By using the latest dataset from the survey of SMEs conducted in Vietnam in  2011, we show that a firm both participating in a wider network of input  suppliers, buyers, and associations of enterprises and conducting innovative  activities in production has higher labor productivity than others, implying  that networks of enterprises and innovation are complementary to each other  in affecting performance of SMEs in Vietnam. We also find that supports of  the government including providing better infrastructure to the SMEs and  helping the SMEs to be formalized when being established are conducive to the  development of the SMEs in Vietnam.

    Keywords: Complementary, supermodularity, Network, Innovation, SMEs.

    JEL: D58 O3

URL: http://d.repec.org/n?u=RePEc:pra:mprapa:70591&r=soc

10. Can there be a market for cheap-talk information? Some experimental evidence

    Cabrales, Antonio; Feri, Francesco; Gottardi, Piero; Meléndez-Jiménez,

     Miguel A.

 This paper reports on experiments testing the viability of markets for cheap  talk information. We find that these markets are fragile. The reasons are  surprising given the previous experimental results on cheap-talk games. Our  subjects provide low-quality information even when doing so does not increase  their monetary payoff. We show that this is not because subjects play a  different (babbling) equilibrium. By analyzing subjects’ behavior in another  game, we find that those adopting deceptive strategies tend to have envious  or non-pro-social traits. The poor quality of the information transmitted  leads to a collapse of information markets.

    Keywords: Experiment, Cheap talk, Auction, Information Acquisition, Information Sale

    JEL: D83 C72 G14

URL: http://d.repec.org/n?u=RePEc:eui:euiwps:eco2016/07&r=soc

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