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Links and Architecture in Village Networks (previously: Endogenous Network Formation and Informal Institutions in Village Economies)

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Author Info
Krishnan, P.
Sciubba, E.

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Abstract

This paper o¤ers a bridge between the theoretical literature on endogenous network formation and the empirical work on the impact of social networks on economic performance. We provide a theoretical framework of endogenous network formation that yields testable predictions for the network architectures generated by a particular informal institution common in village economies. We test the implications of the model on data from rural Ethiopia. In contrast to the current literature, we demonstrate the critical role of both number of links and architecture in determining the impact of social networks on outcomes.Social capital matters, but its impact di¤ers by the architecture of the network to which one belongs.

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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0462.

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Length: 32
Date of creation: Nov 2004
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Handle: RePEc:cam:camdae:0462

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Related research
Keywords: Endogenous network formation; rural institutions;

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Find related papers by JEL classification:
D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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  2. Andrea Galeotti & Sanjeev Goyal, 2002. "Network Formation with Heterogeneous Players," Tinbergen Institute Discussion Papers 02-069/1, Tinbergen Institute. [Downloadable!]
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  3. Marcel Fafchamps, 2002. "Returns to social network capital among traders," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 173-206, April.
    Other versions:
  4. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December. [Downloadable!] (restricted)
    Other versions:
  5. Oriana Bandiera & Imran Rasul, 2002. "Social Networks and Technology Adoption in Northern Mozambique," STICERD - Development Economics Papers 35, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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  6. Hans Haller & Sudipta Sarangi, 2003. "Nash Networks with Heterogeneous Agents," Discussion Papers of DIW Berlin 337, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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  7. Christopher Udry & Timothy G. Conley, 2004. "Social Networks in Ghana," Working Papers 888, Economic Growth Center, Yale University. [Downloadable!]
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  10. Manski, C.F., 1990. "The Selection Problem," Working papers 90-12, Wisconsin Madison - Social Systems.
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    Other versions:
    • Steven N. Durlauf & Marcel Fafchamps, 2004. "Social Capital," NBER Working Papers 10485, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    • Durlauf, Steven N. & Fafchamps, Marcel, 2005. "Social Capital," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 26, pages 1639-1699 Elsevier. [Downloadable!] (restricted)
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  14. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
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  16. De Weerdt, Joachim, 2002. "Risk-Sharing and Endogenous Network Formation," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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