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Community Networks and the Process of Development

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  • Kaivan Munshi

Abstract

My objective in this paper is to lay the groundwork for a new network-based theory of economic development. The first step is to establish that community-based networks are active throughout the developing world. Plenty of anecdotal and descriptive evidence supports this claim. However, showing that these networks improve the economic outcomes of their members is more of a challenge. Over the course of the paper, I will present multiple strategies that have been employed to directly or indirectly identify network effects. The second step is to look beyond a static role for community networks, one of overcoming market failures and improving the outcomes of their members in the short-run, to examine how these informal institutions can support group mobility. A voluminous literature documents the involvement of communities in internal and international migration, both historically and in the contemporary economy. As with the static analysis, the challenge here is to show statistically that community networks directly support the movement of groups of individuals. I will show how predictions from the theory can be used to infer a link between networks and migration in very different contexts.

Suggested Citation

  • Kaivan Munshi, 2014. "Community Networks and the Process of Development," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 49-76, Fall.
  • Handle: RePEc:aea:jecper:v:28:y:2014:i:4:p:49-76
    Note: DOI: 10.1257/jep.28.4.49
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    References listed on IDEAS

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Labour repression & the Indo-Japanese divergence
      by pseudoerasmus in Pseudoerasmus on 2017-10-02 06:04:55

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    1. repec:eee:deveco:v:127:y:2017:i:c:p:413-430 is not listed on IDEAS
    2. repec:bla:obuest:v:79:y:2017:i:3:p:291-318 is not listed on IDEAS
    3. Goyal, S., 2016. "Networks and Markets," Cambridge Working Papers in Economics 1652, Faculty of Economics, University of Cambridge.
    4. Afridi, Farzana & Dhillon, Amrita & Sharma, Swati, 2015. "Social Networks and Labour Productivity: A Survey of Recent Theory and Evidence," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 50(1), pages 25-42.
    5. repec:pid:journl:v:55:y:2016:i:4:p:331-348 is not listed on IDEAS
    6. Gani Aldashev & Catherine Guirkinger, 2016. "Colonization and Changing Social Structure: Kazakhstan 1896-1910," Working Papers ECARES ECARES 2016-10, ULB -- Universite Libre de Bruxelles.
    7. Julien Gagnon & Sanjeev Goyal, 2017. "Networks, Markets, and Inequality," American Economic Review, American Economic Association, vol. 107(1), pages 1-30, January.
    8. Charles H. Anderton, 2015. "The social evolution of genocide across time and geographic space: Perspectives from evolutionary game theory," Economics of Peace and Security Journal, EPS Publishing, vol. 10(2), pages 5-20, October.
    9. Dagnelie, Olivier & Mayda, Anna Maria & Maystadt, Jean-François, 2018. "The labor market integration of refugees to the United States: Do entrepreneurs in the network help?," CEPR Discussion Papers 12735, C.E.P.R. Discussion Papers.
    10. Samuel Bazzi & Martin Fiszbein & Mesay Gebresilasse, 2017. "Frontier Culture: The Roots and Persistence of “Rugged Individualism†in the United States," Boston University - Department of Economics - Working Papers Series WP2018-004, Boston University - Department of Economics.
    11. Miriam Manchin & Sultan Orazbayev, 2016. "Social networks and the intention to migrate," Development Working Papers 409, Centro Studi Luca d'Agliano, University of Milano, revised 01 Dec 2016.
    12. Sanjeev Goyal, 2015. "Networks in Economics: A Perspective on the Literature," Cambridge Working Papers in Economics 1548, Faculty of Economics, University of Cambridge.

    More about this item

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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