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Violence and social capital: Evidence of a microeconomic vicious circle

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  • Leonardo Becchetti

    ()
    (University of Rome Tor Vergata)

  • Pierluigi Conzo

    ()
    (University of Rome Tor Vergata & EIEF)

  • Alessandro Romeo

    ()
    (University of Rome Tor Vergata & World Bank)

Abstract

We 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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File URL: http://www.ecineq.org/milano/WP/ECINEQ2011-197.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 197.

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Length: 39 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2011-197

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Related research

Keywords: trust games; public good games; randomized experiment; social capital; socioeconomic instability and development.;

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  1. Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2003. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," Econometrica, Econometric Society, vol. 71(4), pages 1161-1189, 07.
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Cited by:
  1. Marc Sangnier & Yanos Zylberberg, 2013. "Protests and Beliefs in Social Coordination in Africa," AMSE Working Papers 1328, Aix-Marseille School of Economics, Marseille, France, revised Apr 2013.
  2. Alessandra Cassar & Pauline Grosjean & Sam Whitt, 2011. "Social Cooperation and the Problem of the Conflict Gap: Survey and Experimental Evidence from Post-War Tajikistan," Discussion Papers 2011-15, School of Economics, The University of New South Wales.
  3. Conzo, Pierluigi, 2014. "Trust and Cheating in Sri Lanka: The Role of Experimentally-Induced Emotions about Tsunami," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201403, University of Turin.
  4. Leonardo Becchetti & Stefano Castriota & Pierluigi Conzo, 2012. "Calamity, Aid and Indirect Reciprocity: the Long Run Impact of Tsunami on Altruism," CEIS Research Paper 239, Tor Vergata University, CEIS, revised 06 Jul 2012.
  5. Lisa Cook, 2014. "Violence and economic activity: evidence from African American patents, 1870–1940," Journal of Economic Growth, Springer, vol. 19(2), pages 221-257, June.
  6. Alessandra Cassar & Pauline Grosjean & Sam Whitt, 2013. "Legacies of violence: trust and market development," Journal of Economic Growth, Springer, vol. 18(3), pages 285-318, September.

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