NEP: New Economics Papers - Social Norms and Social Capital - Digest, Vol 127, Issue 2

In this issue we feature 11 current papers on the theme of social capital, chosen by Fabio Sabatini (Università degli Studi di Roma “La Sapienza”):

1. Calamities, Common Interests, Shared Identity: What Shapes Altruism and Reciprocity? Aksoy, Cevat Giray; Cabrales, Antonio; Dolls, Mathias; Durante, Ruben; Windsteiger, Lisa

2. Tolerance and Compromise in Social Networks Garance Genicot

3. Elections, Political Connections and Cash Holdings: Evidence from Local Assemblies David Adeabah; Charles Andoh; Simplice A. Asongu; Isaac Akomea-Frimpong

4. Social capital and the spread of Covid-19: Insights from European countries Bartscher, Alina; Seitz, Sebastian; Siegloch, Sebastian; Slotwinski, Michaela; Wehrhöfer, Nils

5. Social Capital and Protests in the United States Carolyn Chisadza; Matthew Clance; Rangan Gupta

6. Confidence in public institutions is critical in containing the COVID-19 pandemic Adamecz-Völgyi, Anna; Szabó-Morvai, Ágnes

7. Bitter Sugar: Slavery and the Black Family Bertocchi, Graziella; Dimico, Arcangelo

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

9. Echoes of Violent Conflict: The Effect of the Israeli-Palestinian Conflict on Hate Crimes in the U.S. Christensen, Love; Enlund, Jakob

10. With a Little Help from Friends: Strategic Financing and the Crowd Dasgupta, Sudipto; Fan, Tingting; Li, Yiwei; Xiao, Yizhou

11. Social interactions and the prophylaxis of SI epidemics on networks Géraldine Bouveret; Antoine Mandel

1. Calamities, Common Interests, Shared Identity: What Shapes Altruism and Reciprocity? Aksoy, Cevat Giray (European Bank for Reconstruction and Development); Cabrales, Antonio (University College London); Dolls, Mathias (Ifo Institute for Economic Research); Durante, Ruben (CEPR); Windsteiger, Lisa (Max Planck Institute for Tax Law and Public Finance) We conduct a large-scale survey experiment in nine European countries to study how priming a major crisis (COVID-19), common economic interests, and a shared identity influences altruism, reciprocity and trust of EU citizens. We find that priming the COVID-19 pandemic increases altruism and reciprocity towards compatriots, citizens of other EU countries, and non-EU citizens. Priming common European values also boosts altruism and reciprocity but only towards compatriots and fellow Europeans. Priming common economic interests has no tangible impact on behaviour. Trust in others is not affected by any treatment. Our results are consistent with the parochial altruism hypothesis, which asserts that because altruism arises out of inter-group conflict, humans show a tendency to favor members of their own groups. JEL: D72 H51 H53 H55 O52 P52 Keywords: COVID-19, Europe, altruism, reciprocity, survey experiment Date: 2021–06 URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp14411&r=&r=soc

2. Tolerance and Compromise in Social Networks Garance Genicot (Department of Economics, Georgetown University) Individuals typically differ in their identities---the behaviors that they deem ideal for themselves and for the members of their network---and in their tolerance for behaviors that deviate from their own ideals.This paper studies the possibility of compromise, i.e., departures from one's ideal points in order to be accepted by others. I show that an individual's compromise in equilibrium is bounded by the difference between her tolerance level and the lowest tolerance level in society. Heterogeneity in tolerance is necessary for compromise. Relatively intolerant individuals, who can serve as ``bridges'', are critical for the reciprocated compromise of more tolerant individuals. The joint distribution of tolerance levels and identities matters for the equilibrium patterns of compromise. When individuals with extreme identities are systematically less tolerant, societies become more polarized. In contrast, intolerance among moderates encourages cohesion. Classification-D85, L14, O12, Z13 Keywords: Compromise, Social Networks, Social Capital, Tolerance, Homophily, Identity Date: 2021–06–01 URL: http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~21-21-14&r=&r=soc

3. Elections, Political Connections and Cash Holdings: Evidence from Local Assemblies David Adeabah (University of Ghana, Legon, Ghana); Charles Andoh (University of Ghana, Legon, Ghana); Simplice A. Asongu (Yaoundé, Cameroon); Isaac Akomea-Frimpong (Western Sydney University, Australia) We examine the relationship between elections, political connections, and cash holdings in Ghanaian local assemblies. Using a panel dataset of 179local assemblies over a period 2012 to 2017, a panel regression and the generalized method of moments estimation techniques was employed for the analysis. We find that local assemblies hold less cash during election years, which suggests that election may be one of the potential factors to mitigate agency conflict in weak governance environment. Further, we demonstrate that local assemblies that have political connections hold less cash; however, political uncertainty makes these entities conducive to agency problems than their non-connected peers because they hold more cash. Additional analysis indicates that one year prior to elections, managerial conservatism kicks-in and leads managers to hold more cash in local assemblies that have political connections, which continues and becomes more pronounced in election years. Our results have implications for regulations on the cash management practices of local assemblies. Keywords: agency problem; cash holdings; generalized method of moments;panel regression; political connections Date: 2021–01 URL: http://d.repec.org/n?u=RePEc:abh:wpaper:21/004&r=&r=soc

4. Social capital and the spread of Covid-19: Insights from European countries Bartscher, Alina; Seitz, Sebastian; Siegloch, Sebastian; Slotwinski, Michaela; Wehrhöfer, Nils We explore the role of social capital in the first wave of the recent Covid-19 pandemic in independent analyses for Austria, Germany, Great Britain, Italy, the Netherlands, Sweden and Switzerland. Exploiting within-country variation, we show that a one standard deviation increase in social capital leads to between 14% and 40% fewer Covid-19 cases per capita accumulated from mid-March until end of June, as well as between 7% and 16% fewer excess deaths per capita. Our results have important implications for the design of local containment policies in possible future waves of the pandemic. JEL: A13 D04 D91 H11 H12 I10 I18 Keywords: collective action; COVID-19; Europe; health costs; social capital Date: 2020–06 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:14866&r=&r=soc

5. Social Capital and Protests in the United States Carolyn Chisadza (Department of Economics, University of Pretoria, Private Bag X20, Hateld 0028, South Africa); Matthew Clance (Department of Economics, University of Pretoria, Private Bag X20, Hateld 0028, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield, 0028, South Africa) In the last decade we have witnessed rising protests in the United States associated with issues that form part of society's social fabric that can either facilitate or break down collective behaviour. Rising social inequalities can cause people to no longer share the same values and force individuals to work against each other. This breakdown in social capital can be a key driver for protests as the marginalised attempt to voice their grievances. Using social capital data from the Social Capital Project and protest data from the GDELT Project for U.S counties, we find that higher social capital decreases different types of protests, moreso demonstrations and violent protests. At a disaggregated level, we find that community engagement and collective efficacy (i.e. level of social organisation) are better predictors of protests in relation to quality of household health and level of condence in institutions. These results remain consistent when controlling for economic and social inequalities, such as income, unemployment and race. The findings highlight the importance of social capital in the development process, particularly in mitigating the incentives to engage in violence. JEL: Z13 D74 O51 Keywords: social capital, protests, USA URL: http://d.repec.org/n?u=RePEc:pre:wpaper:202139&r=&r=soc

6. Confidence in public institutions is critical in containing the COVID-19 pandemic Adamecz-Völgyi, Anna; Szabó-Morvai, Ágnes This paper investigates the relative importance of confidence in public institutions to explain cross-country differences in the severity of the COVID-19 pandemic. We extend the related literature by employing regression and machine learning methods to identify the most critical predictors of deaths attributed to the pandemic. We find that a one standard deviation increase (e.g., the actual difference between the US and Finland) in confidence is associated with 350.9 fewer predicted deaths per million inhabitants. Confidence in public institutions is one of the most important predictors of deaths attributed to COVID-19, compared to country-level measures of individual health risks, the health system, demographics, economic and political development, and social capital. Our results suggest that effective policy implementation requires citizens to cooperate with their governments, and willingness to cooperate relies on confidence in public institutions. JEL: I18 P16 Keywords: COVID-19,death rate,confidence in public institutions,machine learning Date: 2021 URL: http://d.repec.org/n?u=RePEc:zbw:glodps:861&r=&r=soc

7. Bitter Sugar: Slavery and the Black Family Bertocchi, Graziella; Dimico, Arcangelo We empirically assess the effect of historical slavery on the African American family structure. Our hypothesis is that female single headship among blacks is more likely to emerge in association not with slavery per se, but with slavery in sugar plantations, since the extreme demographic and social conditions prevailing in the latter have persistently affected family formation patterns. By exploiting the exogenous variation in sugar suitability, we establish the following. In 1850, sugar suitability is indeed associated with extreme demographic outcomes within the slave population. Over the period 1880-1940, higher sugar suitability determines a higher likelihood of single female headship. The effect is driven by blacks and starts fading in 1920 in connection with the Great Migration. OLS estimates are complemented with a matching estimator and a fuzzy RDD. Over a linked sample between 1880 and 1930, we identify an even stronger intergenerational legacy of sugar planting for migrants. By 1990, the effect of sugar is replaced by that of slavery and the black share, consistent with the spread of its influence through migration and intermarriage, and black incarceration emerges as a powerful mediator. By matching slaves' ethnic origins with ethnographic data we rule out any influence of African cultural traditions. JEL: J12 J47 N30 O13 Z10 Keywords: Black family; Culture; migration; Slavery; Sugar Date: 2020–06 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:14837&r=&r=soc

8. Wind of Change? Cultural Determinants of Maternal Labor Supply Barbara Boelmann; Anna Christina Raute; Uta Schönberg 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: J10 J20 Z10 Keywords: cultural transmission, social norms, maternal labor force participation, German reunification Date: 2021 URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_9094&r=&r=soc

9. Echoes of Violent Conflict: The Effect of the Israeli-Palestinian Conflict on Hate Crimes in the U.S. Christensen, Love (Department of Political Science, University of Gothenburg); Enlund, Jakob (Department of Economics, School of Business, Economics and Law, Göteborg University) Do social identity ties facilitate the spread of violent conflict? We assess whether the Israeli-Palestinian conflict causes hate crime towards Jews and Muslims in the U.S using daily data between 2000-2016. We measure the timing, intensity and instigator in the conflict using the number of conflict fatalities and U.S. mass media coverage of the conflict. Analyses using both conflict measures find that conflict events trigger hate crimes in the following days following a retaliatory pattern: Anti-Jewish hate crimes increase after Israeli attacks and anti-Islamic hate crimes increase after Palestinian attacks. There is little evidence that the ethno-religiousgroup not associated with the attacker is subjected to hate crimes. Moreover, the lack of an effect of non-violent conflict reporting suggests that hate crimes are not triggered by the salience of the Israeli-Palestinian conflict in itself. Our findings suggest that victimization transcends the locality of the conflict, implying that violent conflict may be more costly than existing research suggests. JEL: D74 J15 K42 L82 Keywords: Conflict; Hate crime; Violence; Israel; Palestine; Media Date: 2021–05 URL: http://d.repec.org/n?u=RePEc:hhs:gunwpe:0805&r=&r=soc

10. With a Little Help from Friends: Strategic Financing and the Crowd Dasgupta, Sudipto; Fan, Tingting; Li, Yiwei; Xiao, Yizhou Based on a crowdfunding platform and social media account login data, we study the information role of financing from connected individuals (e.g., family and friends) of entrepreneurs. While financing from connected individuals is generally considered as a signal of high-quality projects, our results suggest that this might be a signal of funding performance manipulation. Entrepreneurs with moderate early funding performance strategically solicit investments from friends to encourage naïve investors to herd. Sophisticated investors discern manipulation and are less likely to invest. Manipulation exists even when sophisticated investors have significant market power and projects with manipulation deliver poorer funding performance. Date: 2020–07 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:15058&r=&r=soc

11. Social interactions and the prophylaxis of SI epidemics on networks Géraldine Bouveret (NTU - Nanayang Technological University - Nanayang Technological University); Antoine Mandel (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) We investigate the containment of epidemic spreading in networks from a normative point of view. We consider a susceptible/infected model in which agents can invest in order to reduce the contagiousness of network links. In this setting, we study the relationships between social efficiency, individual behaviours and network structure. First, we characterise individual and socially efficient behaviour using the notions of communicability and exponential centrality. Second, we show, by computing the Price of Anarchy, that the level of inefficiency can scale up to linearly with the number of agents. Third, we prove that policies of uniform reduction of interactions satisfy some optimality conditions in a vast range of networks. In setting where no central authority can enforce such stringent policies, we consider as a type of second-best policy the implementation of cooperation frameworks that allow agents to subsidise prophylactic investments in the global rather than in the local network. We then characterise the scope for Pareto improvement opened by such policies through a notion of Price of Autarky, measuring the ratio between social welfare at a global and a local equilibrium. Overall, our results show that individual behaviours can be extremely inefficient in the face of epidemic propagation but that policy can take advantage of the network structure to design welfare improving containment policies. Keywords: Network,Price of Anarchy,Epidemic Spreading,Public Good Date: 2021–03 URL: http://d.repec.org/n?u=RePEc:hal:pseptp:halshs-03165772&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.