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Social Capital as Good Culture

Author

Listed:
  • Luigi Guiso
  • Paola Sapienza
  • Luigi Zingales

Abstract

To explain the extremely long-term persistence (more than 500 years) of positive historical experiences of cooperation (Putnam, 1993), we model the intergenerational transmission of priors about the trustworthiness of others. We show that this transmission tends to be biased toward excessively conservative priors. As a result, societies can be trapped in a low-trust equilibrium. In this context, a temporary shock to the return to trusting can have a permanent effect on the level of trust. We validate the model by testing its predictions on the World Values Survey data and the German Socio Economic Panel. We also present some anecdotal evidence that these priors are reflected in the novels originated in different parts of the country.

Suggested Citation

  • Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007. "Social Capital as Good Culture," Economics Working Papers ECO2007/57, European University Institute.
    • Handle: RePEc:eui:euiwps:eco2007/57
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    More about this item

    Keywords

    social capital; culture; trust;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • N00 - Economic History - - General - - - General
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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