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The development of trust and social capital in rural Uganda: An experimental approach

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Author Info
Paul Mosley ()
Arjan Verschoor (Department of Economics, The University of Sheffield)

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Abstract

Trust is important for development but can be hard to build. In this paper, we report on experiments designed to understand the determinants of trust in villages in eastern Uganda, and in particular whether trust can be `built´ by offering insurance to people as a protection against the possibility that the trust they offer will not be reciprocated. We find, firstly, that the effects of income and wealth on trust are ambiguous: trust is higher in the richer than the poorer village, but once association and female education are added as explanatory variables, the wealth effect disappears. Secondly, although the offer of insurance is taken up by a majority of players, this is in most cases not an `effective demand´ in the sense of incentivising higher levels of trust. Effective demand for insurance, defined in this way, however responds positively to high levels of risk efficacy, microfinance membership and female education. Insurance offered in this form, therefore, is on its own apparently not a reliable technology for building trust; but its effectiveness as a trust-building instrument appears to increase if certain complementary institutions are in position.

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File URL: http://www.shef.ac.uk/content/1/c6/03/91/72/SERP2005011.pdf
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File URL: http://www.shef.ac.uk/content/1/c6/03/91/72/SERP2005011.pdf
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Publisher Info
Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2005011.

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Length: 36 pages
Date of creation: Jun 2005
Date of revision: Jun 2005
Handle: RePEc:shf:wpaper:2005011

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Related research
Keywords: Trust; Social Capital; Insurance; Uganda;

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Find related papers by JEL classification:
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment
C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991. "Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study," American Economic Review, American Economic Association, vol. 81(5), pages 1068-95, December. [Downloadable!] (restricted)
  2. Guth, Werner & Tietz, Reinhard, 1990. "Ultimatum bargaining behavior : A survey and comparison of experimental results," Journal of Economic Psychology, Elsevier, vol. 11(3), pages 417-449, September. [Downloadable!] (restricted)
  3. Steven N. Durlauf, 2002. "On the Empirics of Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 459-479, November. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
  5. Abigail Barr, 2003. "Trust and expected trustworthiness: experimental evidence from zimbabwean villages," Economic Journal, Royal Economic Society, vol. 113(489), pages 614-630, 07. [Downloadable!] (restricted)
  6. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Olof Johansson Stenman & Minhaj Mahmud & Peter Martinsson, 2006. "Trust, Trust Games and Stated Trust: Evidence from Rural Bangladesh," Keele Economics Research Papers KERP 2006/11, Centre for Economic Research, Keele University. [Downloadable!]
    Other versions:
  2. Tanaka, Tomomi & Camerer, Colin & Nguyen, Quang, 2009. "Measuring Norms of Redistributive Transfers: Trust Experiments and Survey Data from Vietnam," MPRA Paper 16119, University Library of Munich, Germany. [Downloadable!]
  3. Juan Camilo Cardenas & Jeffrey P. Carpenter, 2005. "Experiments and Economic Development: Lessons from Field Labs in the Developing World," Middlebury College Working Paper Series 0505, Middlebury College, Department of Economics. [Downloadable!]
  4. Greig, Fiona & Bohnet, Iris, 2005. "Is There Reciprocity in a Reciprocal Exchange Economy? Evidence from a Slum in Nairobi, Kenya," Working Paper Series rwp05-044, Harvard University, John F. Kennedy School of Government. [Downloadable!]
  5. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2006. "Preferences, Poverty and Politics: Experimental and Survey Data from Vietnam," Levine's Bibliography 321307000000000054, UCLA Department of Economics. [Downloadable!]
  6. Tomomi Tanaka & Colin F Camerer & Quang Nguyen, 2006. "Poverty, politics, and preferences: Field Experiments and survey data from Vietnam," Levine's Bibliography 122247000000001099, UCLA Department of Economics. [Downloadable!]
  7. Jeffery Carpenter & Juan Camilo Cardenas, 2006. "Behavioural Development Economics: Lessons from field labs in the developing world," Middlebury College Working Paper Series 0616, Middlebury College, Department of Economics. [Downloadable!]
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