The effect of associational membership on socio-economic development: an empirical analysis

The paper investigates the effect of associational membership on trustworthiness by using panel data at a regional level. The proxy of trustworthiness is based on indicators of opportunistic behaviour in a cooperative framework. This proxy is analysed in relation to many socio-economic variables, in particular focusing on different types of horizontal associations usually considered as "Putnam groups": a) cultural; b) ecological, human rights and peace and c) volunteer. The paper shows that: i) volunteer associations positively affect the level of trustworthiness; ii) cultural and ecological, human rights and peace associations have no positive effects on trustworthiness. On the contrary, they show a negative (even though only in some model specifications significant) correlation to trustworthiness. Not all the associations usually considered "Putnam groups" seem to reflect the theoretical approach of this author. The analysis of the trustworthiness' determinants has important economic implications. The absence of opportunistic behaviour decreases transaction costs and promotes cooperation, positively affecting socio-economic development. The empirical analysis uses region fixed effects, random effects and instrumental variables to consider endogeneity problems and it is based on an original panel dataset collected by the author from existing national sources.