In this issue we feature 14 current papers on the theme of social capital, chosen by Fabio Sabatini (Università degli Studi di Roma “La Sapienza”):

1. The Third Function of Law Is to Transform Cultural Categories Hoff,Karla; Walsh,James Sonam
2. Cohesive Institutions and Political Violence Thiemo Fetzer; Stephan Kyburz
3. Cooperation in a Fragmented Society: Experimental Evidence on Syrian Refugees and Natives in Lebanon Michalis Drouvelis; Bilal Malaeb; Michael Vlassopoulos; Jackline Wahba
4. The Breakdown of Anti-Racist Norms: A Natural Experiment on Normative Uncertainty after Terrorist Attacks Amalia Álvarez-Benjumea; Fabian Winter
5. Trust and trustworthiness after a land restitution program: Lab-in-the-field evidence from Colombia Francesco Bogliacino; Gianluca Grimalda; Laura JimeÌ nez; Daniel Reyes Galvis; Cristiano Codagnone
6. The Refugee’s Dilemma:Evidence from Jewish Migration out of Nazi Germany Johannes Buggle; Mathias Thoenig; Thierry Mayer; Seyhun Orcan Sakalli
7. The Geography of Dictatorship and Support for Democracy MariÌ a AngeÌ lica Bautista; Felipe GonzaÌ lez; Luis R. MartiÌ nez; Pablo Muñoz; Mounu Prem
8. Social Groups and the Effectiveness of Protests Marco Battaglini; Rebecca B. Morton; Eleonora Patacchini
9. Trust to Pay ? Tax Morale and Trust in Africa Kouame,Wilfried Anicet Kouakou
10. Political Connections and Financial Constraints : Evidence from Transition Countries Bussolo,Maurizio; De Nicola,Francesca; Panizza,Ugo G.; Varghese,Richard
11. The interbank market puzzle Allen, Franklin; Covi, Giovanni; Gu, Xian; Kowalewski, Oskar; Montagna, Mattia
12. Financial knowledge and trust in financial institutions Carin van der Cruijsen; Jakob de Haan; Ria Roerink
13. Impacts on trust and social capital of a youth employment program in Yemen: Evaluation of the rural and urban advocates working for development intervention for the Social Fund for Development: Bertelli, Olivia; Kurdi, Sikandra; Mahmoud, Mai; Al-Maweri, Mohamad; Al Bass, Tareq
14. Caught between Cultures: Unintended Consequences of Improving Opportunity for Immigrant Girls Gordon B. Dahl; Christina Felfe; Paul Frijters; Helmut Rainer

1. The Third Function of Law Is to Transform Cultural Categories Hoff,Karla; Walsh,James Sonam

How does law change society? In the rational actor model, law affects behavior only by changing incentives and information -- the command and coordination function of law. Under the view that humans are social animals, law is also a guidepost for social norms that regulate behavior -- the expressive function of law. This paper proposes a third function of law?the schematizing function -- based on cognitive research that shows that individuals cannot think without categories. Law makes possible new kinds of exemplars, role models, and social interactions that give people prototypes that transform the categories they use, thereby reframing their options and influencing their behavior. This paper illustrates the schematizing power of law with examples from field and natural experiments. Like the one-two punch in a boxing match, the command and schematizing functions of law together can change society in situations where the command function alone would be ineffective or backfire. Keywords: Gender and Development,Human Rights,Social Cohesion,Disability,Services&Transfers to Poor,Access of Poor to Social Services,Economic Assistance,Judicial System Reform Date: 2019–08–06 URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:8954&r=soc

2. Cohesive Institutions and Political Violence Thiemo Fetzer (University of Warwick); Stephan Kyburz (Center for Global Development)

Can institutionalized transfers of resource rents be a source of civil conflict? Are cohesive institutions better in managing distributive conflicts? We study these questions exploiting exogenous variation in revenue disbursements to local governments together with new data on local democratic institutions in Nigeria. We make three contributions. First, we document the existence of a strong link between rents and conflict far away from the location of the actual resource. Second, we show that distributive conflict is highly organized involving political militias and concentrated in the extent to which local governments are non-cohesive. Third, we show that democratic practice in form having elected local governments significantly weakens the causal link between rents and political violence. We document that elections (vis-a-vis appointments), by producing more cohesive institutions, vastly limit the extent to which distributional conflict between groups breaks out following shocks to the available rents. Throughout, we confirm these findings using individual level survey data. Keywords: conflict, ethnicity, natural resources, political economy, commodity prices JEL Classification: Q33, O13, N52, R11, L71 Date: 2018–06 URL: http://d.repec.org/n?u=RePEc:hic:wpaper:271&r=soc

3. Cooperation in a Fragmented Society: Experimental Evidence on Syrian Refugees and Natives in Lebanon Michalis Drouvelis; Bilal Malaeb; Michael Vlassopoulos; Jackline Wahba

Lebanon is the country with the highest density of refugees in the world, raising the question of whether the host and refugee populations can cooperate harmoniously. We conduct a lab-in-the-field experiment in Lebanon studying intra- and inter-group behavior of Syrian refugees and Lebanese nationals in a repeated public good game without and with punishment. We find that homogeneous groups, on average, contribute and punish significantly more than mixed groups. These patterns are driven by the Lebanese participants. Our findings suggest that it is equally important to provide adequate help to the host communities to alleviate any economic and social pressures. JEL: D91 J50 F22 Keywords: refugees, public good game, cooperation, punishment Date: 2019 URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_8038&r=soc

4. The Breakdown of Anti-Racist Norms: A Natural Experiment on Normative Uncertainty after Terrorist Attacks Amalia Álvarez-Benjumea (Max Planck Institute for Research on Collective Goods); Fabian Winter (Max Planck Institute for Research on Collective Goods)

Terrorist attacks can have profound consequences for the erosion of social norms, yet the causes of this erosion are not well understood. We argue that these attacks create substantial uncertainty about whether norms of civic conversation still hold. Observing breaches of these norms then leads people to express their own anti-immigrant attitudes more readily, as compared to a context where these norms are unambiguous. To test our theory, we examine (i) the impact of terrorist attacks on the level of hate speech against refugees in online discussions, and (ii) how the effect of terrorist attacks depends on the uncertainty about social norms of prejudice expression. To this end, we report on the results of a unique combination of a natural and a lab-in-the-field experiment. We exploit the occurrence of two consecutive Islamist terrorist attacks in Germany, the Würzburg and Ansbach attacks, in July 2016. Hateful comments towards refugees in an experimental online forum, but not towards other minority groups (i.e., gender rights), increased as a result of the attacks. The experiment compares the effect of the terrorist attacks in contexts where a descriptive norm against the use of hate speech is emphasized, i.e., participants observe only neutral or positive comments towards a minority group, to contexts in which the norm is ambiguous because participants observe anti-minority comments. Observing anti-immigrant comments had a considerable impact on our participants’ own comments after the attacks, while observing anti-gender-rights comments did not. We end by discussing implications of the findings for the literature on social norms, sociological methods and policy. Date: 2020–02 URL: http://d.repec.org/n?u=RePEc:mpg:wpaper:2020_05&r=soc

5. Trust and trustworthiness after a land restitution program: Lab-in-the-field evidence from Colombia Francesco Bogliacino (Universidad Nacional de Colombia, Centro de Investigaciones para el Desarrollo, Carrera 30, No 45-03, BogotaÌ , Bloque 311, Oficina 12b, 3165000 ext. 12431); Gianluca Grimalda (Kiel Institute for the World Economy, Centre for Global Cooperation Research); Laura JimeÌ nez (Universidad Nacional de Colombia); Daniel Reyes Galvis (Universidad Nacional de Colombia); Cristiano Codagnone (Universitat Oberta de Catalunya; UniversitaÌ€ degli Studi di Milano)

We assess the impact of a governmental program to compensate victims of forced displacement on pro-social behavior. All our subjects were eligible to apply for restitution of their land in accordance with the "Bill of Victims" (Ley de ViÌ ctimas, Bill 1448/2011). The key independent variable of our analysis is whether a subject had obtained land within this or similar programs. Our dependent variables are a subject's trust and trustworthiness to unknown others, as measured by a modified version of a Trust Game. We focus on interpersonal trust and trustworthiness because of their well-documented positive effect on economic development. Our design also included a treatment in which subjects voted on their most preferred outcomes in the Trust Game, because we wanted to understand whether forms of consultative democracy could engender higher mutual trust. We find that land restitution significantly increases trustworthiness, while there is no effect on trust. This is consistent with findings that trust and trustworthiness tap into different aspects of pro-sociality. Voting does not improve either trust or trustworthiness, but there is a positive effect once interacted with restitution. Keywords: trust; trustworthiness; internally displaced population; reparations JEL Classification: C93, I38, Q15 Date: 2019–01 URL: http://d.repec.org/n?u=RePEc:hic:wpaper:291&r=soc

6. The Refugee’s Dilemma:Evidence from Jewish Migration out of Nazi Germany Johannes Buggle; Mathias Thoenig; Thierry Mayer; Seyhun Orcan Sakalli

In this paper we estimate the push and pull factors involved in the outmigration of Jews facing persecution in Nazi Germany from 1933 to 1941 when migration was banned. Our empirical investigation makes use of a unique individual-level dataset that records the migration history of almost the entire universe of Jews living in Germany over the period. Our analysis highlights new channels, specific to violent contexts, through which social networks affect the decision to flee. We first estimate a structural model of migration where individuals base their own migration decision on the observation of persecution and migration among their peers. Identification rests on exogenous variations in push and pull factors across peers who live in different cities of residence. Then we perform various counterfactual policy experiments in order to quantify how migration restrictions in destination countries affected the fate of Jews. For example, removing work restrictions for refugees after the Nuremberg Laws (in 1935) would have led to 27% increase in Jewish migration out of Germany. JEL: F22 N40 F50 D74 Keywords: Refugees, Migration Policy, Antisemitism, Nazi Germany Date: 2020–02 URL: http://d.repec.org/n?u=RePEc:lau:crdeep:20.01&r=soc

7. The Geography of Dictatorship and Support for Democracy MariÌ a AngeÌ lica Bautista (University of Chicago, Harris School of Public Policy); Felipe GonzaÌ lez (Pontificia Universidad CatoÌ lica de Chile, Instituto de EconomiÌ a); Luis R. MartiÌ nez (University of Chicago, Harris School of Public Policy); Pablo Muñoz (University of California Berkeley, Department of Economics); Mounu Prem (Universidad del Rosario, Department of Economics)

We study whether exposure to the military dictatorship of Augusto Pinochet in Chile (1973-1990) affected political attitudes and behavior, exploiting the plausibly exogenous location of military bases shortly before the coup that brought Pinochet to power. We show that residents of counties housing military bases both registered to vote and voted “No†to Pinochet’s continuation in power at higher rates in the crucial 1988 plebiscite that bolstered the democratic transition. Counties with military bases also experienced substantially more civilian deaths during the dictatorship, suggesting that increased exposure to repression is an important mechanism driving the larger rates of political participation and regime opposition. Evidence from survey responses and elections after democratization shows that military presence led to long-lasting support for democracy without changing political ideologies or electoral outcomes. Keywords: dictatorship, repression, democratization, human rights JEL Classification: D72, N46 Date: 2019–03 URL: http://d.repec.org/n?u=RePEc:hic:wpaper:298&r=soc

8. Social Groups and the Effectiveness of Protests Marco Battaglini; Rebecca B. Morton; Eleonora Patacchini

We present an informational theory of public protests, according to which public protests allow citizens to aggregate privately dispersed information and signal it to the policy maker. The model predicts that information sharing of signals within social groups can facilitate information aggregation when the social groups are sufficiently large even when it is not predicted with individual signals. We use experiments in the laboratory and on Amazon Mechanical Turk to test these predictions. We find that information sharing in social groups significantly affects citizens' protest decisions and as a consequence mitigates the effects of high conflict, leading to greater efficiency in policy makers' choices. Our experiments highlight that social media can play an important role in protests beyond simply a way in which citizens can coordinate their actions; and indeed that the information aggregation and the coordination motives behind public protests are intimately connected and cannot be conceptually separated. JEL: D72 D78 Date: 2020–02 URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:26757&r=soc

9. Trust to Pay ? Tax Morale and Trust in Africa Kouame,Wilfried Anicet Kouakou

Although low tax morale hits developing countries hardest, little is known about its determinants in those countries. This paper examines the impact of trust in public institutions and the neighborhood on individual tax morale in four African countries: Algeria, Ghana, Morocco, and Nigeria. First, the paper provides theoretical foundations of such a relationship. Further, the paper uses the World Value Survey to estimate the effects of trust in public institutions and the neighborhood on individual tax morale. The identification strategy employs the instrumental variables method and relies on historical data on the slave trade and the literature on the cultural heritage of trust. The paper finds that trust in public institutions and the neighborhood are largely associated with tax morale in the African countries under consideration. The findings are robust to an alternative identification strategy, additional controls, and a falsification test. Keywords: Tax Law,Educational Sciences,International Trade and Trade Rules,Culture in Sustainable Development,Literature&Folklore,Culture and Cultural Practice,Artisans,Arts&Music,Cultural Policy,Cultural Heritage&Preservation Date: 2019–08–06 URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:8968&r=soc

10. Political Connections and Financial Constraints : Evidence from Transition Countries Bussolo,Maurizio; De Nicola,Francesca; Panizza,Ugo G.; Varghese,Richard

This paper examines whether political connections ease financial constraints faced by firms. Using firm-level data from six Central and Eastern European economies, the paper shows that politically connected firms: (i) have high levels of leverage, (ii) have low levels of profitability, (iii) are less capitalized, (iv) have low marginal productivity of capital, and (v) do not invest more than unconnected firms. Next, the paper shows that connected firms borrow more because they have easier access to credit and that political connections lead to a misallocation of capital. The results are consistent with the idea that political connections distort capital allocation and may have welfare costs. Keywords: Economics and Finance of Public Institution Development,State Owned Enterprise Reform,Economic Theory&Research,Economic Growth,Industrial Economics,Financial Regulation&Supervision,De Facto Governments,Public Sector Administrative&Civil Service Reform,Public Sector Administrative and Civil Service Reform,Administrative&Civil Service Reform,Democratic Government,Armed Conflict Date: 2019–08–06 URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:8956&r=soc

11. The interbank market puzzle Allen, Franklin; Covi, Giovanni; Gu, Xian; Kowalewski, Oskar; Montagna, Mattia

This study documents significant differences in the interbank market lending and borrowing levels across countries. We argue that the existing differences in interbank market usage can be explained by the trust of the market participants in the stability of the country’s banking sector and counterparties, proxied by the history of banking crises and failures. Specifically, banks originating from a country that has lower level of trust tend to have lower interbank borrowing. Using a proprietary dataset on bilateral exposures, we investigate the Euro Area interbank network and find the effect of trust relies on the network structure of interbank markets. Core banks acting as interbank intermediaries in the network are more significantly influenced by trust in obtaining interbank funding, while being more exposed in a community can mitigate the negative effect of low trust. Country-level institutional factors might partially substitute for the limited trust and enhance interbank activity. JEL Classification: G01, G21, G28, D85 Keywords: centrality, community detection, interbank market, networks, trust Date: 2020–02 URL: http://d.repec.org/n?u=RePEc:ecb:ecbwps:20202374&r=soc

12. Financial knowledge and trust in financial institutions Carin van der Cruijsen; Jakob de Haan; Ria Roerink

Using fourteen years of data on Dutch consumers' trust in financial institutions, we find that financially literate consumers are more likely to trust banks, insurance companies and pension funds, and the competence and integrity of the managers of these institutions. This holds both for broad-scope and narrow-scope trust. Although trust in respondents' own financial institutions is significantly higher than general trust in financial institutions, both forms of trust are positively related. Financially knowledgeable people are more likely to trust the prudential supervisor. Finally, our results indicate that trust in the supervisor is positively related to trust in the financial sector. JEL: D12 D83 E58 G21 G22 Keywords: trust; financial institutions; financial literacy; consumer survey Date: 2019–12 URL: http://d.repec.org/n?u=RePEc:dnb:dnbwpp:662&r=soc

13. Impacts on trust and social capital of a youth employment program in Yemen: Evaluation of the rural and urban advocates working for development intervention for the Social Fund for Development: Bertelli, Olivia; Kurdi, Sikandra; Mahmoud, Mai; Al-Maweri, Mohamad; Al Bass, Tareq

This paper evaluates the impacts on the participants of the Yemen Social Fund for Development’s youth employment and training program called Rural and Urban Advocates Working for Development (RUAWFD). The evaluation used both traditional surveys and an innovative experimental game methodology to show that the employment program, in addition to aiding youth individually, has important benefits for the country as a whole by contributing to stronger social capital. The survey analysis finds for the program participants significant increases between the baseline and follow-up surveys in self-reported trust in local government institutions and officials, political parties, and tribes. In reflecting on the level of cooperativeness in their own communities, participants reported increased awareness of the presence of marginalized groups and increased perception of cooperativeness in surrounding communities. There was also a significant increase in self-reported trust in people generally, especially for trust in other young people and in people from other areas of Yemen. The experimental game methodology uses a common pool game from the experimental economics literature incentivized by cash payments to measure trust levels between pairs of RUAWFD participants from different geographic regions. This approach confirms the findings from the survey analysis while avoiding possible self-reporting bias. The game results show that trust was lowest at baseline for partners in which one of the partners was from one of the Northern governorates and the other was from one of the Southern governorates. After the intervention, however, not only were average trust levels higher, but Northern-Southern pairs of RUAWFD participants had trust levels closer to those for pairs from the same regions. These findings are consistent with the literature on inter-group contact theory suggesting that community interventions can increase trust in individuals and institutions. This research contributes to a growing literature on trust and social capital as important development indicators, particularly in relation to conflict. The main results suggest that reinforcing social ties across regions in Yemen is an important benefit of the Social Fund for Development’s role as a national development agency and an achievable objective to consider in planning development interventions to contribute to future post-conflict reconstruction. Keywords: EGYPT, ARAB COUNTRIES, MIDDLE EAST, NORTH AFRICA, AFRICA,YEMEN, ARAB COUNTRIES, MIDDLE EAST, SOUTHWESTERN ASIA, ASIA, social capital, youth, youth employment, rural employment, urban population, development programmes, Date: 2019 URL: http://d.repec.org/n?u=RePEc:fpr:menawp:24&r=soc

14. Caught between Cultures: Unintended Consequences of Improving Opportunity for Immigrant Girls Gordon B. Dahl; Christina Felfe; Paul Frijters; Helmut Rainer

What happens when immigrant girls are given increased opportunities to integrate into the workplace and society, but their parents value more traditional cultural outcomes? Building on Akerlof and Kranton's identity framework (2000), we construct a simple theoretical model which shows how expanding opportunities for immigrant girls can have the unintended consequence of reducing their well-being, since identity-concerned parents will constrain their daughter's choices. The model can explain the otherwise puzzling findings from a reform which granted automatic birthright citizenship to eligible immigrant children born in Germany after January 1, 2000. Using survey data we collected in 57 German schools and comparing those born in the months before versus after the reform, we find that birthright citizenship lowers measures of life satisfaction and self-esteem for immigrant girls. This is especially true for Muslims, where traditional cultural identity is particularly salient. Birthright citizenship results in disillusionment where immigrant Muslim girls believe their chances of achieving their educational goals are lower and the perceived odds of having to forgo a career for family rise. Consistent with the model, immigrant Muslim parents invest less in their daughters' schooling and have a lower probability of speaking German with their daughters if they are born after the reform. We further find that immigrant Muslim girls granted birthright citizenship are less likely to self-identify as German and are more socially isolated. In contrast, immigrant boys experience, if anything, an improvement in well-being and other outcomes we examine. Taken together, the findings point towards immigrant girls being pushed by parents to conform to a role within traditional culture, whereas boys are allowed to take advantage of the opportunities that come with citizenship. Alternative models can explain some of the findings in isolation, but are not consistent more generally. JEL: Z10 J15 J16 Keywords: identity, citizenship, immigration, integration Date: 2020 URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_8045&r=soc

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