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The Productivity of Social Capital - An Econometric Analysis of 49 Peruvian Highland Communities

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  • Wiig, Henrik

    ()
    (Dept. of Economics, University of Oslo)

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    Abstract

    Many empirical studies find a partial negative effect of market integration on cooperation in traditional poor small-scale farmer communities in developing countries, blaming an erosion of collective action enhancing norms (Social Capital). This paper takes the empirical analysis one step further by estimating the effect on income. A survey on cooperation, institutions and income level was conducted by the author in 49 Peruvian highland communities in order to estimate a production function including Social Capital. None of the variables representing customary cooperation were significant in an econometric regression analysis, but various aspects of integration that can be interpreted to facilitate more modern forms of cooperation had a significant positive income effect. Communities resettling after the civil war draw on common organizational experience and emigrants represent a network to the modern society.The positive effect of the latter was significantly lower in communities with individual property rights to land. One possible explanation is the increasing tensions between emigrants and people in their communities of origin as the governmental land entitlement program proceeds. Communities with common property rights are not affected by the program and solve land disputes themselves in local assemblies.

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    File URL: http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2003/Memo-27-2003.pdf
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    Bibliographic Info

    Paper provided by Oslo University, Department of Economics in its series Memorandum with number 27/2003.

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    Length: 23 pages
    Date of creation: 31 Aug 2003
    Date of revision:
    Handle: RePEc:hhs:osloec:2003_027

    Contact details of provider:
    Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
    Phone: 22 85 51 27
    Fax: 22 85 50 35
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    Web page: http://www.oekonomi.uio.no/indexe.html
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    Related research

    Keywords: Social capital; collective action; institutions; poverty; market integration; survey; Peru;

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    1. Javier Escobal & Carmen Ponce, 2003. "The benefits of rural roads. Enhancing income opportunities for the rural poor," Documentos de Investigación dt40b, Grupo de Análisis para el Desarrollo (GRADE).
    2. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 811-846, August.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    3. Torsvik, G., 2000. "Social Capital and Economic Development," Norway; Department of Economics, University of Bergen 216, Department of Economics, University of Bergen.
    4. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
    5. Bardhan, Pranab, 2000. "Irrigation and Cooperation: An Empirical Analysis of 48 Irrigation Communities in South India," Economic Development and Cultural Change, University of Chicago Press, vol. 48(4), pages 847-65, July.
    6. Durlauf,S.N., 2001. "On the empirics of social capital," Working papers 3, Wisconsin Madison - Social Systems.
    7. Dayton-Johnson, Jeff, 2000. "Determinants of collective action on the local commons: a model with evidence from Mexico," Journal of Development Economics, Elsevier, vol. 62(1), pages 181-208, June.
    8. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
    9. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
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