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Trust-based social capital, institutions, and development

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  • Baliamoune-Lutz, Mina

Abstract

We estimate fixed-effects and Arellano-Bond GMM equations using panel data from a large group of developing countries and test whether trust-based social capital, proxied by contract-intensive money, complements the role of institutions in promoting development. The results we obtain provide robust evidence that social capital enhances the contribution of institutions when we focus on political institutions and weaker evidence when we use civil liberties. Both social capital and institutions have positive effects on income but the relationships these variables have with income tend to be non-monotonic. Moreover, social capital has a positive influence on the effectiveness of human capital.

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  • Baliamoune-Lutz, Mina, 2011. "Trust-based social capital, institutions, and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 335-346, August.
  • Handle: RePEc:eee:soceco:v:40:y:2011:i:4:p:335-346
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    7. Sana Zaouali & Amira Zaouali, 2015. "Terms of Trade Instability, Economic Vulnerability and Economic Growth: The Role of Institutions in Sub-Saharan Africa," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(4), pages 579-590, April.
    8. Jasmine Mondolo, 2018. "How do informal institutions influence inward FDI? A systematic review," "Marco Fanno" Working Papers 0218, Dipartimento di Scienze Economiche "Marco Fanno".
    9. Guido Sechi & Alexander Tatarko & Jurgis Skilters, 2014. "Institutions, Civil Society, Trust and Quality of Life: A Social Capital- And Social Identity-Based Approach. Evidence from the Russian Federation," ERSA conference papers ersa14p595, European Regional Science Association.
    10. Jasmine Mondolo, 2019. "How do informal institutions influence inward FDI? A systematic review," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(1), pages 167-204, April.
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