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Alfred Marshall Lecture Social Capital as Good Culture

Author

Listed:
  • Luigi Guiso
  • Paola Sapienza
  • Luigi Zingales

Abstract

To explain the extremely long-term persistence (more than 500 years) of positive historical experiences of cooperation (Putnam 1993), we model the intergenerational transmission of priors about the trustworthiness of others. We show that this transmission tends to be biased toward excessively conservative priors. As a result, societies can be trapped in a low-trust equilibrium. In this context, a temporary shock to the return to trusting can have a permanent effect on the level of trust. We validate the model by testing its predictions on the World Values Survey data and the German Socio Economic Panel. We also present some anecdotal evidence that these priors are reflected in novels that originate in different parts of the country. (JEL: 04, 016, 043, P16) (c) 2008 by the European Economic Association.

Suggested Citation

  • Luigi Guiso & Paola Sapienza & Luigi Zingales, 2008. "Alfred Marshall Lecture Social Capital as Good Culture," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 295-320, 04-05.
  • Handle: RePEc:tpr:jeurec:v:6:y:2008:i:2-3:p:295-320
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    References listed on IDEAS

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    JEL classification:

    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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