NEP: New Economics Papers - Social Norms and Social Capital - Digest, Vol 126, Issue 5

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. Golfing with Trump. Social capital, decline, inequality, and the rise of populism in the US Lee, Neil; Lipp, Cornelius; Rodríguez-Pose, Andrés

2. Institutional Change and Institutional Persistence Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin

3. Affinity, Trust, and Information Guiso, Luigi; Makarin, Alexey

4. Earthquake Hazard and Civic Capital Paolo Buonanno; Giacomo Plevani; Marcello Puca

5. Abstentions and Social Networks in Congress Battaglini, Marco; Leone Sciabolazza, Valerio; Patacchini, Eleonora

6. Wind of Change? Cultural Determinants of Maternal Labor Supply Barbara Boelmann; Anna Raute; Uta Schönberg

7. Trustors’ Disregard for Trustees Deciding Intuitively or Reflectively: Three Experiments on Time Constraints Antonio Cabrales; Antonio M. Espín; Praveen Kujal; Stephen Rassenti

8. Institutional fragility, breakdown of trust: a model of social unrest in Chile Funk, Robert; Velasco, Andrés

9. The Political Effects of Immigration: Culture or Economics? Alesina, Alberto; Tabellini, Marco

10. Social Networks and Job Referrals in Recruitment Marie Lalanne

11. Hate Trumps Love: The Impact of Political Polarization on Social Preferences Eugen Dimant

12. Quantifying Vote Trading Through Network Reciprocity Guerrero, Omar; Matter, Ulrich

13. Trusting me, trusting you - trusting technology? A multidisciplinary analysis to uncover the status quo of research on trust in technology Distel, Bettina; Engelke, Katherine M.; Querfurth, Sydney

14. Revenge of the Experts: Will COVID-19 Renew or Diminish Public Trust in Science? Aksoy, Cevat; Eichengreen, Barry; Saka, Orkun

1. Golfing with Trump. Social capital, decline, inequality, and the rise of populism in the US Lee, Neil; Lipp, Cornelius; Rodríguez-Pose, Andrés In 2000 Robert Putnam forecast that United States (US) democracy was at risk from the twin challenges of declining civic engagement and rising interpersonal inequality. Sixteen years later, his predictions were vindicated by the election of Donald Trump as president of the US. This paper analyses the extent to which the election of Donald Trump was related to levels of social capital and interpersonal inequalities and posits a third alternative: that the rise in vote for Trump in 2016 was the result of long-term economic and population decline in areas with strong social capital. This hypothesis is confirmed by the econometric analysis conducted for counties across the US. Long-term declines in employment and population â?? rather than in earnings, salaries, or wages â?? in places with relatively strong social capital propelled Donald Trump to the presidency. By contrast, low social capital and high interpersonal inequality were not connected to a surge in support for Trump. These results are robust to the introduction of control variables and different inequality measures. The analysis also shows that the discontent at the base of the Trump margin is not just a consequence of the 2008 crisis but had been brewing for a long time. Places in the US that remained cohesive but witnessed an enduring decline are no longer bowling alone, they are golfing with Trump. JEL: D31 D72 O15 R11 Keywords: Counties; Donald Trump; economic and demographic decline; inequality; populism; social capital; US Date: 2020–09 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:15259&r=&r=soc

2. Institutional Change and Institutional Persistence Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin In this essay, we provide a simple conceptual framework to elucidate the forces that lead to institutional persistence and change. Our framework is based on a dynamic game between different groups, who care both about current policies and institutions and future policies, which are themselves determined by current institutional choices, and clarifies the forces that lead to the most extreme form of institutional persistence ("institutional stasis") and the potential drivers of institutional change. We further study the strategic stability of institutions, which arises when institutions persist because of fear of subsequent, less beneficial changes that would follow initial reforms. More importantly, we emphasize that, despite the popularity of ideas based on institutional stasis in the economics and political science literatures, most institutions are in a constant state of flux, but their trajectory may still be shaped by past institutional choices, thus exhibiting "path-dependent change", so that initial conditions determine both the subsequent trajectories of institutions and how they respond to shocks. We conclude the essay by discussing how institutions can be designed to bolster stability, the relationship between social mobility and institutions, and the interplay between culture and institutions. JEL: C73 D72 D74 N10 N40 P16 Keywords: conflict; Constitutions; democracy; Institutional Change; institutions; Persistence; stability Date: 2020–09 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:15295&r=&r=soc

3. Affinity, Trust, and Information Guiso, Luigi; Makarin, Alexey Mutually beneficial trades often rely on both trust and trustworthiness. In exchanges where no history of behavior is observable, however, where does trust come from? Recent evidence suggests that the level of affinity parties in an exchange feel for each other positively affects trustworthiness and can, therefore, affect trust. We propose a simple model that predicts a positive relationship between trust beliefs, affinity, and trustworthiness and a negative relationship between the dispersion of trust beliefs and affinity level. Furthermore, the model suggests that trust should be slower to update after a shock to trustworthiness when affinity is high. We show that the model's predictions are supported by data from two unrelated datasets-a proprietary survey of Italian entrepreneurs and an extensive international survey (Eurobarometer). Finally, using data on international trade, we show that, in line with our model, adverse shocks to trustworthiness cause a reallocation of trade from low-affinity to high-affinity partners, and especially so in trust-intensive industries. JEL: D8 D83 D9 F1 Z1 Keywords: Affinity; Information Acquisition; Trust; trustworthiness Date: 2020–09 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:15250&r=&r=soc

4. Earthquake Hazard and Civic Capital Paolo Buonanno (Università di Bergamo); Giacomo Plevani (Università di Torino and Collegio Carlo Alberto.); Marcello Puca (Università di Bergamo, CSEF and Webster University Geneva) We examine the empirical relationship between the exposure to earthquake hazard and civic capital in Italian municipalities. Drawing on the Italian National Institute of Geophysics and Volcanology, we find that earthquake hazard increases civic capital. We decompose the effect of earthquake hazard variation along four dimensions – frequency, space, magnitude, and timing – and observe that the effect is mostly explained by high-magnitude seismic events in the past. Our results are in line with the intuition that cooperative social norms build over a very long time span. JEL: A12 D91 Q54 Z1 Keywords: Civic Capital, Cooperation, Social Norms, Earthquakes. Date: 2021–05–12 URL: http://d.repec.org/n?u=RePEc:sef:csefwp:612&r=&r=soc

5. Abstentions and Social Networks in Congress Battaglini, Marco; Leone Sciabolazza, Valerio; Patacchini, Eleonora We study the extent to which personal connections among legislators influence abstentions in the U.S. Congress. Our analysis is conducted by observing representatives' abstention for the universe of roll call votes held on bills in the 109th-113th Congresses. Our results show that a legislator's propensity to abstain increases when the majority of his or her alumni connections abstains, even after controlling for other well-known predictors of abstention choices and a vast set of fixed effects. We further reveal that a legislator is more prone to abstain than to take sides when the demands from personal connections conflict with those of the legislator's party. JEL: D72 D85 Keywords: abstention; alumni networks; Social Networks; U.S. Congress Date: 2020–09 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:15270&r=&r=soc

6. Wind of Change? Cultural Determinants of Maternal Labor Supply Barbara Boelmann (Department of Economics, University College London, CReAM and University of Cologne, 30 Gordon Street, London WC1H 0AX, United Kingdom); Anna Raute (School of Economics and Finance, Queen Mary University of London, CReAM and CEPR, Mile End Road, London E1 4NS, United Kingdom); Uta Schönberg (Department of Economics, University College London, CReAM and IAB, 30 Gordon Street, London WC1H 0AX, United Kingdom) Does the culture in which a woman grows up influence her labor market decisions once she has had a child? And to what extent can exposure to a different cultural group in adulthood shape maternal labor supply? To address these questions, we exploit the setting of the German reunification. A state socialist country, East Germany strongly encouraged mothers to participate in the labor market full-time, whereas West Germany propagated a more traditional male breadwinner-model. After reunification, these two cultures were suddenly thrown together, with consequent increased social interactions between East and West Germans through migration and commuting. Zooming in on East and West Germans who migrated across the former inner-German border, we document a strong asymmetry in the persistence of the culture in which women were raised. Whereas East German female migrants return to work earlier and work longer hours than their West German colleagues even after long exposure to the more traditional West German culture, West German migrants adjust their post-birth labor supply behavior nearly entirely to that of their East German colleagues. West German return migrants continue to be influenced by the more gender egalitarian East German norm even after their return to the West, pointing towards the importance of learning from peers. Finally, taking advantage of differential inflows of East German migrants across West German workplaces in the aftermath of reunification, we show that even a partial exposure to East German colleagues induces “native” West German mothers to accelerate their return to work after childbirth, suggesting that migration might be a catalyst for cultural change. JEL: J1 J2 Z1 Keywords: cultural transmission, social norms, maternal labor force participation, German reunification Date: 2021–05 URL: http://d.repec.org/n?u=RePEc:ajk:ajkdps:090&r=&r=soc

7. Trustors’ Disregard for Trustees Deciding Intuitively or Reflectively: Three Experiments on Time Constraints Antonio Cabrales (Dept. of Economics, Universidad Carlos III de Madrid); Antonio M. Espín (Department of Social Anthropology, University of Granada and Loyola Behavioral Lab, Loyola Andalucía University); Praveen Kujal (Department of Economics, Middlesex University); Stephen Rassenti (Economic Science Institute, Chapman University) Human decisions in the social domain are modulated by the interaction between intuitive and reflective processes. Requiring individuals to decide quickly or slowly triggers these processes and is thus likely to elicit different social behaviors. Meanwhile, time pressure has been associated with inefficiency in market settings and market regulation often requires individuals to delay their decisions via cooling-off periods. Yet, recent research suggests that people who make reflective decisions are met with distrust. If this extends to external time constraints, then forcing individuals to delay their decisions may be counterproductive in scenarios where trust considerations are important. In three Trust Game experiments (total n = 1,872), including within- and betweensubjects designs, we test whether individuals trust more someone who is forced to respond quickly (intuitively) or slowly (reflectively). We find that trustors do not adjust their behavior (or their beliefs) to the trustee’s time conditions. This seems to be an appropriate response because time constraints do not affect trustees’ behavior, at least when the game decisions are binary (trust vs. don’t trust; reciprocate vs. don’t reciprocate) and therefore mistakes cannot explain choices. Thus, delayed decisions per se do not seem to elicit distrust. JEL: C90 C91 D91 Keywords: trust; trustworthiness; beliefs; reflection; dual process; intuition Date: 2021 URL: http://d.repec.org/n?u=RePEc:chu:wpaper:21-08&r=&r=soc

8. Institutional fragility, breakdown of trust: a model of social unrest in Chile Funk, Robert; Velasco, Andrés We build a formal model of how trust in government institutions can arise -and also disappear overnight. At the heart of our argument is a two-way causation: government effectiveness helps engender trust, but governments that are widely trusted find it easier to be effective at providing the things -like high-quality public services- people want. External effects are also at work: the trust we place on a governmental institution matters, but other citizens' trust matters just as much. Two-way causation plus external effects yields multiple equilibria. Therefore our model can explain how a small exogenous shock can yield a big change in outcomes, as people change their behavior in ways that make government institutions less effective, triggering in turn an additional (and potentially sharp) decrease in trust. Self-fulfilling prophecies can also occur: once citizens come to believe that institutions are ineffectual, they change our behaviour in ways that ensure that institutions do become ineffectual and no longer trustworthy. We use the model to explore the recent experience of Chile, a middle-income country whose institutions, once viewed as strong and credible, are increasingly distrusted by angry citizens, who in 2019 took to the streets in massive and often violent demonstrations. Date: 2020–10 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:15343&r=&r=soc

9. The Political Effects of Immigration: Culture or Economics? Alesina, Alberto (Harvard University); Tabellini, Marco (Harvard Business School) We review the growing literature on the political effects of immigration. After a brief summary of the economics of immigration, we turn to the main focus of the paper: how immigrants influence electoral outcomes in receiving countries, and why. We start from the "standard" view that immigration triggers political backlash and raises support for nativist, anti-immigrant political parties. We present evidence from a variety of studies that the causes of natives' political discontent are unlikely to have (solely) economic roots, but are instead more tightly linked to cultural and social concerns. Next, we discuss works that paint a more nuanced picture of the effects of immigration, which, in some cases, can move natives' preferences in a more liberal direction. We also consider the factors that can explain a seemingly puzzling empirical regularity: the anti-immigration rhetoric has become a banner of right wing parties. We conclude by outlining what, to us, are promising avenues for future research. JEL: D72 J11 J15 J61 Z1 Keywords: immigration, diversity, culture, politics Date: 2021–05 URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp14354&r=&r=soc

10. Social Networks and Job Referrals in Recruitment Marie Lalanne This paper investigates whether using recommendations for recruitment reduce information asymmetries or allow the exchange of favors in the labor market of board directors. I use data on all directors of large listed US companies between 2004 and 2008. These are linked with extensive information on their social networks and detailed information on the referrals underpinning new independent board appointments. Compared to non-connected new directors, connected directors are 14% more likely to be referred by current board members with whom they share employment history. Predictions of a theoretical model allow me to further discriminate between information provision and favoritism in the use of such referrals for recruitment. Results show that referrals help select directors with higher ability, in particular the type of ability that is partially observed at the time of hiring. JEL: M51 J44 D82 Keywords: social networks, job referrals, recruitment, board appointments, asymmetric information. Date: 2021 URL: http://d.repec.org/n?u=RePEc:cca:wpaper:652&r=&r=soc

11. Hate Trumps Love: The Impact of Political Polarization on Social Preferences Eugen Dimant Political polarization has ruptured the fabric of U.S. society. I quantify this phenomenon through the use of 5 pre-registered studies, comprising 15 behavioral experiments and a diverse set of over 8,600 participants. The focus of this paper is to examine various behavioral-, belief-, and norm-based layers of (non-)strategic decision-making that are plausibly affected by existing polarization in the context of Donald J. Trump. I find strong heterogeneous effects: ingroup-love occurs in the perceptional domain (how close one feels towards others), whereas outgroup-hate occurs in the behavioral domain (how one helps/harms/cooperates with others). The rich setting also allows me to examine the mechanisms of observed intergroup conflict, which can be attributed to one’s grim expectations regarding cooperativeness of the opposing faction, rather than one’s actual unwillingness to cooperate. In a final step, I test whether popular behavioral interventions (defaults and norm-nudging) can eradicate the detrimental impact of polarization in the (non-) strategic contexts studied here. The interventions are ineffective in closing the polarization gap, suggesting that structural – on top of behavioral - changes are needed to mend existing fractions and heal the society. JEL: C90 D01 D90 Keywords: identity, norms, nudging, polarization, social preferences Date: 2021 URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_9073&r=&r=soc

12. Quantifying Vote Trading Through Network Reciprocity Guerrero, Omar; Matter, Ulrich Building on the concept of reciprocity in directed weighted networks, we propose a framework to study legislative vote trading. We first discuss the conditions to quantify vote trading empirically. We then illustrate how a simple empirical framework—complementary to existing approaches—can facilitate the discovery and measurement of vote trading in roll-call data. The application of the suggested procedure preserves the micro-structure of trades between individual legislators, shedding light on, so far, unstudied aspects of vote trading. Validation is provided via Monte Carlo simulation of the legislative process (with and without vote trading). Applications to two major studies in the field provide richer, yet consistent evidence on vote trading in US politics. JEL: D72 D85 Keywords: Vote trading, roll-call voting, networks, reciprocity, US Congress Date: 2021–06 URL: http://d.repec.org/n?u=RePEc:usg:econwp:2021:06&r=&r=soc

13. Trusting me, trusting you - trusting technology? A multidisciplinary analysis to uncover the status quo of research on trust in technology Distel, Bettina; Engelke, Katherine M.; Querfurth, Sydney [Conclusion] As far as we are aware, this study is one of the first to give a comprehensive overview of research on trust in the context of technology. It thus goes beyond previous studies that examine trust in the context of specific technologies in that it uncovers and structures the status quo of scientific research in this area, with a special focus on trust in technologies. Furthermore, this article contributes to current research by deriving five fundamental propositions for future research. The added value of this study lies in the derivation of propositions that not only consider topics for future research as often done in literature reviews, but also with regard to methods, applied theories, and necessary conceptual considerations. Thus, this article is research-oriented and its practical added value arises within the scientific discourse. [...] Date: 2021 URL: http://d.repec.org/n?u=RePEc:zbw:ercisw:35&r=&r=soc

14. Revenge of the Experts: Will COVID-19 Renew or Diminish Public Trust in Science? Aksoy, Cevat; Eichengreen, Barry; Saka, Orkun It is sometimes said that an effect of the COVID-19 pandemic will be heightened appreciation of the importance of scientific research and expertise. We test this hypothesis by examining how exposure to previous epidemics affected trust in science and scientists. Building on the "impressionable years hypothesis" that attitudes are durably formed during the ages 18 to 25, we focus on individuals exposed to epidemics in their country of residence at this particular stage of the life course. Combining data from a 2018 Wellcome Trust survey of more than 75,000 individuals in 138 countries with data on global epidemics since 1970, we show that such exposure has no impact on views of science as an endeavor but that it significantly reduces trust in scientists and in the benefits of their work. We also illustrate that the decline in trust is driven by the individuals with little previous training in science subjects. Finally, our evidence suggests that epidemic-induced distrust translates into lower compliance with health-related policies in the form of negative views towards vaccines and lower rates of child vaccination. Date: 2020–11 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:15447&r=&r=soc

This nep-soc issue is ©2021 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice. General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director at nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected. NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.