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When Consumption Generates Social Capital: Creating Room for Manoeuvre for Pro-Poor Policies

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  • Leonardo Becchetti

    ()
    (University of Tor Vergata)

  • Melania Michetti

    (Fondazione ENI Enrico Mattei and Università Cattolica del Sacro Cuore - Milano)

Abstract

Economic interactions are often accused of being neutral, or even of generating adverse effects, not only on the social fabric but also on a factor (social capital) which is regarded as the foundation of both socio-economic activity and prosperity. In this paper we document how a particular form of economic interaction (affiliation of marginalised producers to a first level association and to the fair trade import channel) has indeed positive effects on a specific type of social capital. Our findings on a sample of Kenyan farmers show that years of affiliation to Fair Trade significantly affect the participation in elections and the trust placed in trade unions, political parties and the government, net of the impact of other controls and after accounting for the selection bias effect. This implies that consumers buying fair trade products contribute to reinforce both social cohesion and the institutions in countries in which these variables are fundamental in creating room for manoeuvre for pro-poor (equity plus growth) policies.

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File URL: http://www.ecineq.org/milano/WP/ECINEQ2008-88.pdf
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Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 88.

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Length: 32 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2008-88

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Related research

Keywords: Fair trade; social capital; impact study;

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  1. Alberto Alesina & Eliana La Ferrara, 2000. "The Determinants of Trust," NBER Working Papers 7621, National Bureau of Economic Research, Inc.
  2. Redfern, Andy & Snedker, Paul, 2002. "Creating market opportunities for small enterprises : experiences of the fair trade movement," ILO Working Papers, International Labour Organization 357069, International Labour Organization.
  3. Montalvo, Jose G. & Reynal-Querol, Marta, 2005. "Ethnic diversity and economic development," Journal of Development Economics, Elsevier, Elsevier, vol. 76(2), pages 293-323, April.
  4. Dora L. Costa & Matthew E. Kahn, 2001. "Understanding the Decline in Social Capital, 1952-1998," NBER Working Papers 8295, National Bureau of Economic Research, Inc.
  5. LeClair, Mark S., 2002. "Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade," World Development, Elsevier, Elsevier, vol. 30(6), pages 949-958, June.
  6. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(4), pages 1251-88, November.
  7. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 14(3), pages 137-158, Summer.
  8. Schiff, Maurice, 1999. "Labor market integration in the presence of social capital," Policy Research Working Paper Series 2222, The World Bank.
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Cited by:
  1. Ruben, Ruerd & Fort, Ricardo, 2012. "The Impact of Fair Trade Certification for Coffee Farmers in Peru," World Development, Elsevier, Elsevier, vol. 40(3), pages 570-582.

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