Social Capital and Government in the Production of Public Goods
AbstractAs a response to the rapidly growing empirical literature on social capital and the evidence of its correlation with government performance, we build a theoretical framework to study the interactions between social capital and government's action. This paper presents a model of homogeneous agents in an overlapping generations framework incorporating social capital as the values transmitted from parent to child. The government's role is to provide public goods. First, government expenditure is exogenously given. Then, it will be chosen at the preferred level of the representative agent. For both setups the equilibrium outcomes are characterized and the resulting dynamics studied. Briefly we include an analysis of the effect of productivity growth on the evolution of social capital. The results obtained caution caution against both the crowding out effect of the welfare state and the impact of sustained economic growth on social capital.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 580.03.
Date of creation: 03 Jul 2003
Date of revision:
Social Capital; Productivity Growth; Government; Public Goods;
Find related papers by JEL classification:
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
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