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Social capital and the reproduction of economic inequality in polarized societies

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  • Mogues, Tewodaj
  • Carter, Michael

Abstract

This paper explores the idea of how wealth is distributed across social groups (ethnic or language groups, gender, etc.) and how such distribution fundamentally affects the evolution of economic inequality. By providing microfoundations suitable for this exploration, the paper hopes to enhance the understanding of when social forces contribute to the reproduction of economic inequality. In tackling this issue, the paper offers contributions in two domains. First, it models social capital as a real capital asset with direct use and collateral value. Second, it extends the concepts of identity, alienation and polarization used by Esteban and Ray (1994). This generalization permits consideration of the multiple characteristics that shape social identity, inclusion and exclusion. It also underwrites a higher-order measure of socioeconomic polarization that permits exploration of the hypothesis that economic inequality is most pernicious and persistent when it is socially embedded. Among other things the paper shows that holding constant the initial levels of economic polarization and wealth inequality, higher socioeconomic polarization increases subsequent income and wealth inequality. Far from being a distributionally neutral panacea for missing markets, social capital in this model may itself generate exclusion and deepen social and economic cleavages.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series DSGD discussion papers with number 25.

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Date of creation: 2005
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Handle: RePEc:fpr:dsgddp:25

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Keywords: Equality ; Social capital ; economic distribution ;

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Citations

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Cited by:
  1. Dinda, Soumyananda, 2008. "Social capital in the creation of human capital and economic growth: A productive consumption approach," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 37(5), pages 2020-2033, October.
  2. Saint-Macary, Camille, 2012. "Are Ethnically Diverse Communities “Bad” Communities? An Empirical Study on Social Capital Formation in Northern Vietnam," Economics Papers from University Paris Dauphine 123456789/11437, Paris Dauphine University.
  3. Mogues, Tewodaj, 2008. "A two-dimensional measure of polarization:," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 837, International Food Policy Research Institute (IFPRI).
  4. Santos, Paulo & Barrett, Christopher B., 2006. "Informal Insurance in the Presence of Poverty Traps: Evidence from Southern Ethiopia," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia, International Association of Agricultural Economists 25487, International Association of Agricultural Economists.
  5. Carter, Michael R. & Little, Peter D. & Mogues, Tewodaj & Negatu, Workneh, 2005. "Shocks, Sensitivity and Resilience: Tracking the Economic Impacts of Environmental Disaster on Assets in Ethiopia and Honduras," Staff Paper Series, University of Wisconsin, Agricultural and Applied Economics 489, University of Wisconsin, Agricultural and Applied Economics.
  6. Chani, Muhammad Irfan & Hassan, Mahboob Ul & Shahid, Muhammad, 2012. "Human capital formation and economic development in Pakistan: an empirical analysis," MPRA Paper 38925, University Library of Munich, Germany.
  7. Chantarat, Sommarat & Barrett, Christopher B., 2008. "Social Network Capital, Economic Mobility and Poverty Traps," MPRA Paper 6841, University Library of Munich, Germany.
  8. Carter, Michael R. & Little, Peter D. & Mogues, Tewodaj & Negatu, Workneh, 2007. "Poverty Traps and Natural Disasters in Ethiopia and Honduras," World Development, Elsevier, Elsevier, vol. 35(5), pages 835-856, May.
  9. Mogues, Tewodaj, 2006. "Shocks, livestock asset dynamics and social capital in Ethiopia:," DSGD discussion papers, International Food Policy Research Institute (IFPRI) 38, International Food Policy Research Institute (IFPRI).
  10. Ronelle Burger & Marisa Coetzee & Carina van der Watt, 2013. "Estimating the benefits of linking ties in a deeply divided society: considering the relationship between domestic workers and their employers in South Africa," Working Papers 18/2013, Stellenbosch University, Department of Economics.
  11. Muhammad Chani & Sajjad Jan & Zahid Pervaiz & Amatul Chaudhary, 2014. "Human capital inequality and income inequality: testing for causality," Quality & Quantity: International Journal of Methodology, Springer, Springer, vol. 48(1), pages 149-156, January.

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