Violence and social capital: Evidence of a microeconomic vicious circle
AbstractWe test with a randomized experiment in the slums of Nairobi whether violence suffered during the 2007 political outbreaks affects trustworthiness learning when participants live group experiences and face opportunism and free riding in public good games (PGGs) between two subsequent trust games (TGs). Our findings document that participants move toward balanced reciprocity after the PGG with the exception of those who have experienced directly or indirectly physical violence and/or forced relocation who exhibit significantly less trustworthiness in the second TG round. Results are robust to several robustness checks controlling for selection into victimization. Since in a framework of asymmetric information and incomplete contracts, trust games mimic sequential economic exchanges whose functioning is crucial to economic growth, we argue that our results identify a microeconomic nexus among socio-political instability, violence and growth helping to solve identification problems of the cross-country literature on the subject.
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Bibliographic InfoPaper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 197.
Length: 39 pages
Date of creation: 2011
Date of revision:
trust games; public good games; randomized experiment; social capital; socioeconomic instability and development.;
Find related papers by JEL classification:
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-11 (All new papers)
- NEP-CBE-2011-06-11 (Cognitive & Behavioural Economics)
- NEP-EVO-2011-06-11 (Evolutionary Economics)
- NEP-EXP-2011-06-11 (Experimental Economics)
- NEP-PBE-2011-06-11 (Public Economics)
- NEP-SOC-2011-06-11 (Social Norms & Social Capital)
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