NEP: New Economics Papers - Social Norms and Social Capital - Digest, Vol 131, 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. Golfing with Trump: social capital, decline, inequality, and the rise of populism in the US Rodríguez-Pose, Andrés; Lee, Neil; Lipp, Cornelius

2. Populists in Power Luisa Doerr; Niklas Potrafke; Felix Roesel

3. Norm Prevalence and Interdependence: Evidence from a Large-Scale Historical Survey of German speaking Villages Radost Holler; Paul Ivo Schäfer

4. Formal insurance and altruism networks Tizié Bene; Yann Bramoullé; Frédéric Deroïan

5. Relationship lending, Trust, and SME bank financing in the UK Degryse, Hans; Matthews, Kent; Zhao, Tianshu

6. Media negativity bias and tax compliance: Experimental evidence Fisar, Milos; Reggiani, Tommaso; Sabatini, Fabio; Spalek, Jirí

7. Let’s call! Using the phone to increase acceptance of COVID-19 vaccines Alex Armand; Mattia Fracchia; Pedro C. Vicente

8. Religious Practice and Student Performance: Evidence from Ramadan Fasting Erik Hornung; Guido Schwerdt; Maurizio Strazzeri

9. Group Identity, Social Learning and Opinion Dynamics Sebastiano Della Lena; Luca Paolo Merlino

10. Where do angry birds tweet? Income inequality and online hate in Italy Denti, Daria; Faggian, Alessandra

11. What Would Others Say? Exploring the Gendered and Caste-based Social Norms in Central India through Vignettes Surendran Padmaja, Subash; KHED, VIJAYALAXMI Dundappa; Krishna, Vijesh V.

1. Golfing with Trump: social capital, decline, inequality, and the rise of populism in the US Rodríguez-Pose, Andrés; Lee, Neil; Lipp, Cornelius 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 2016 election of Donald Trump—and his failed re-election bid in 2020—have been related to levels of social capital and interpersonal inequalities. We posit an alternative: that the rise in votes for Trump has been 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 US counties. Long-term declines in employment and population—rather than in earnings, salaries, or wages—in places with relatively strong social capital propelled Donald Trump to the presidency and almost secured his re-election. 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 have golfed with Trump and will, in all likelihood, continue to golf with Trumpism or other forms of populism. JEL: D31 D72 O15 R11 Keywords: populism; social capital; inequality; economic and demographic decline; Donald Trump; USA; 724363; OUP deal Date: 2021–09–25 URL: http://d.repec.org/n?u=RePEc:ehl:lserod:112201&r=&r=soc

2. Populists in Power Luisa Doerr; Niklas Potrafke; Felix Roesel We examine how populist governments influence political culture and economic outcomes. Some Austrian communities are governed by far-right populist mayors, directly elected by a majority of voters. We exploit close elections and find that the electorate becomes more polarized under populist mayors. However, polarization is not limited to politics. A major innovation of our study is using data on team members of local football teams. Our results show that diversity in local football teams decreases when populists are in power, indicating that populists infiltrate the civic society. When it comes to economic outcomes, migration and budget transparency decrease under populist governments. JEL: D72 P16 H72 Z18 Keywords: populism, far-right politics, partisan politics, polarization, immigration, economic policy, local government, budget transparency Date: 2021 URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_9336&r=&r=soc

3. Norm Prevalence and Interdependence: Evidence from a Large-Scale Historical Survey of German speaking Villages Radost Holler (Bonn Graduate School of Economics); Paul Ivo Schäfer (Bonn Graduate School of Economics) We use large-scale survey data of German speaking villages from the 1930's to investigate drivers of cooperation, gender, and religious norms. Through geographic cluster analysis, we show that inter-regional variation explains only little heterogeneity in norms. Villages in the same physical and institutional environment still maintain different norms. We argue that local differences in the structure of social relationships can explain intra-regional heterogeneity in norms. We focus on a community's ability to transmit and enforce norms to derive theoretical links between correlates of community social relationships and the number of norms it maintains (norm prevalence). Empirically we find that: (1) norm prevalence is positively related to three correlates of community social relationships: religiously homogeneous villages, villages that border on other villages with a different majority religion, and villages with more within-village social gatherings; (2) villages with stronger community-level social relationships are also less likely to segment their reference group for the cooperation norm to smaller social units; (3) cooperation norms make other norms more likely. JEL: Z10 N94 J16 D03 Z12 Keywords: social norms; gender; religion; cooperation; culture; geography; communities Date: 2021–10 URL: http://d.repec.org/n?u=RePEc:ajk:ajkdps:118&r=&r=soc

4. Formal insurance and altruism networks Tizié Bene (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Yann Bramoullé (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Frédéric Deroïan (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université) We study how altruism networks affect the adoption of formal insurance. Agents have private CARA utilities and are embedded in a network of altruistic relationships. Incomes are subject to both a common shock and a large idiosyncratic shock. Agents can adopt formal insurance to cover the common shock. We show that ex-post altruistic transfers induce interdependence in ex-ante adoption decisions. We characterize the Nash equilibria of the insurance adoption game. We show that adoption decisions are substitutes and that the number of adopters is unique in equilibrium. The demand for formal insurance is lower with altruism than without at low prices, but higher at high prices. Remarkably, individual incentives are aligned with social welfare. We extend our analysis to CRRA utilities and to a fixed utility cost of adoption. Keywords: Formal Insurance,Informal Transfers,Altruism Networks Date: 2021–09 URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03355219&r=&r=soc

5. Relationship lending, Trust, and SME bank financing in the UK Degryse, Hans; Matthews, Kent (Cardiff Business School); Zhao, Tianshu It is well recognized that relationship banking helps to relieve the credit constraints faced by SMEs to access bank finance. Trust is an important part of relationship banking. However, the term trust is nebulous, and relationship banking means different things to different banks and different borrowers. How trust enables the credit market for SMEs through relationship banking is largely unexplored. Using a unique primary dataset of SMEsin the UK, we construct a measure of trust-based relationship banking from the perspective of the borrower. We examine the drivers of trust-based relationship banking in terms of organizational trust in the relationship manager, defined as the delegation of operational autonomy, along with local market and social capital factors, and the style of the bank-borrower relationship. Along with bank, firm, and market factors, trust-based relationship banking helped to reduce the credit constraints faced by SMEs in the decade following the global financial crisis. JEL: G21 G29 L14 Keywords: Trust, Relationship Banking, SME Financing, Bank Organization Date: 2021–10 URL: http://d.repec.org/n?u=RePEc:cdf:wpaper:2021/24&r=&r=soc

6. Media negativity bias and tax compliance: Experimental evidence Fisar, Milos; Reggiani, Tommaso (Cardiff Business School); Sabatini, Fabio; Spalek, Jirí We study the impact of the media negativity bias on tax compliance. Through a framed laboratory experiment, we assess how the exposure to biased news about government action affects compliance in a repeated taxation game. Subjects treated with positive news are signicantly more compliant than the control group. Instead, the exposure to negative news does not prompt any significant reaction compared to the neutral condition, suggesting that participants may perceive the media negativity bias in the selection and tonality of news as the norm rather than the exception. Overall, our results suggest that biased news provision is a constant source of psychological priming and plays a vital role in taxpayers' compliance decisions. JEL: C91 D70 H26 H31 Keywords: tax compliance, media bias, taxation game, laboratory experiment.; tax compliance, media bias, taxation game, laboratory experiment. Date: 2021–10 URL: http://d.repec.org/n?u=RePEc:cdf:wpaper:2021/26&r=&r=soc

7. Let’s call! Using the phone to increase acceptance of COVID-19 vaccines Alex Armand; Mattia Fracchia; Pedro C. Vicente Vaccinating against COVID-19 is the main hope to end the current pandemic. We develop and test experimentally three phone-based cumulative interventions to increase COVID-19 vaccine acceptance in Mozambique. First, the provision of a simple positive message informing about these vaccines. Second, the activation of social memory on the country’s success in eradicating wild polio. Finally, the inoculation against fake news by developing among participants a critical view towards misleading information. We find that the combination of the three interventions increases COVID-19 vaccine acceptance and trust in institutions. JEL: O12 D83 D91 I12 I15 Keywords: COVID-19, vaccines, acceptance, hesitancy, information, trust, social memory, fake news, misinformation, inoculation theory, Mozambique, Africa Date: 2021 URL: http://d.repec.org/n?u=RePEc:unl:novafr:wp2113&r=&r=soc

8. Religious Practice and Student Performance: Evidence from Ramadan Fasting Erik Hornung (University of Cologne, CMR, Albertus-Magnus-Platz, 50923 Cologne); Guido Schwerdt (University of Konstanz, Department of Economics, 78457 Konstanz); Maurizio Strazzeri (University of Bern, Department of Economics, Schanzeneckstrasse 1, CH-3001 Bern) We investigate how the intensity of Ramadan affects educational outcomes by exploiting spatio-temporal variation in annual fasting hours. Longer fasting hours are related to increases in student performance in a panel of TIMMS test scores (1995--2019) across Muslim countries but not other countries. Results are confirmed in a panel of PISA test scores (2003--2018) allowing within country-wave comparisons of Muslim to non-Muslim students across Europe. We provide evidence consistent with the hypothesis that a demanding Ramadan during adolescence affects educational performance by facilitating formation of social capital and social identity via increased religious participation and shared experiences among students. JEL: I21 Z12 J24 O15 Keywords: Education, Religion, Religious Participation, Ramadan, Social Identity, Social Capital, PISA, TIMMS Date: 2021–10 URL: http://d.repec.org/n?u=RePEc:ajk:ajkdps:117&r=&r=soc

9. Group Identity, Social Learning and Opinion Dynamics Sebastiano Della Lena; Luca Paolo Merlino In this paper, we study opinion dynamics in a balanced social structure consisting of two groups. Agents learn the true state of the world naively learning from their neighbors and from an unbiased source of information. Agents want to agree with others of the same group -- in-group identity, -- but to disagree with those of the opposite group -- out-group conflict. We characterize steady state opinions, and show that agents' influence depends on their Bonacich centrality in the signed network of opinion exchange. Finally, we study the effect of group size, the weight given to unbiased information and homophily when agents in the same group are homogeneous. Date: 2021–10 URL: http://d.repec.org/n?u=RePEc:arx:papers:2110.07226&r=&r=soc

10. Where do angry birds tweet? Income inequality and online hate in Italy Denti, Daria; Faggian, Alessandra Do spatial socioeconomic features influence a digital behaviour like cyberhate? Our contribution provides an answer to this question, showing how high levels of income inequality determine high volumes of hate tweets in Italy. Our findings are robust to potential endogeneity problems of income inequality, as well as to the inclusion of confounding factors and to competing estimation strategies. Additionally, we find that education does not act as a protective factor against cyberhate in unequal places, aligning with existing evidence showing that inequality may trigger intolerance, including among educated people, threatening the perceived stability of social positions. Also, in the Italian case, the perception of economic insecurity fuels cyberhate, alongside the transmission of self-interest values along family generations. The latter finding relates to existing evidence supporting the role of persistent social norms in shaping people’s attitudes. JEL: D31 D74 J15 Z10 Keywords: hate; online behaviour; inequality; self-interest; conflict; OUP deal Date: 2021–08–26 URL: http://d.repec.org/n?u=RePEc:ehl:lserod:112200&r=&r=soc

11. What Would Others Say? Exploring the Gendered and Caste-based Social Norms in Central India through Vignettes Surendran Padmaja, Subash; KHED, VIJAYALAXMI Dundappa; Krishna, Vijesh V. Keywords: Community/Rural/Urban Development, Institutional and Behavioral Economics, Consumer/Household Economics Date: 2021–08 URL: http://d.repec.org/n?u=RePEc:ags:aaea21:314028&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.