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Does Industrialization Build or Destroy Social Networks?

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  • Miguel, Edward
  • Gertler, Paul
  • Levine, David I

Abstract

This article estimates the relationship between changes in industrialization and changes in social networks measures in Indonesia during 1985-97 using repeated cross sections of nationally representative surveys. We analyze a rich set of social interaction measures, including various measures of voluntary associational activity, levels of trust, and informal cooperation. Districts that experienced rapid industrialization showed significant increases in most measures of social interaction. However, districts that neighbor rapidly industrializing areas exhibited high rates of out-migration, significantly fewer community credit cooperatives, and a reduction in "mutual cooperation" as assessed by village elders. Manufacturing growth can be thought of as a proxy for income growth here. The findings are contrary to several recent claims regarding the role of social capital in economic development.

Suggested Citation

  • Miguel, Edward & Gertler, Paul & Levine, David I, 2006. "Does Industrialization Build or Destroy Social Networks?," Economic Development and Cultural Change, University of Chicago Press, vol. 54(2), pages 287-317, January.
  • Handle: RePEc:ucp:ecdecc:y:2006:v:54:i:2:p:287-317
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    File URL: http://dx.doi.org/10.1086/497014
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    References listed on IDEAS

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    1. Duncan Thomas & Elizabeth Frankenberg & James P. Smith, 2001. "Lost but Not Forgotten: Attrition and Follow-up in the Indonesia Family Life Survey," Journal of Human Resources, University of Wisconsin Press, vol. 36(3), pages 556-592.
    2. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
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    Cited by:

    1. Takayama, Taisuke & Nakatani, Tomoaki, 2015. "The Impact of Participatory Projects on Social Capital: Evidence from Farmland Consolidation Projects in Japan," 2015 Conference, August 9-14, 2015, Milan, Italy 211938, International Association of Agricultural Economists.
    2. Labonne, Julien & Chase, Robert S., 2008. "Do community-driven development projects enhance social capital ? evidence from the Philippines," Policy Research Working Paper Series 4678, The World Bank.
    3. Bartolini, Stefano & Bonatti, Luigi, 2007. "Endogenous growth, decline in social capital and expansion of market activities," MPRA Paper 3341, University Library of Munich, Germany.
    4. Shoji, Masahiro, 2016. "Incentive of risk sharing and trust formation: Experimental and survey evidence from Bangladesh," MPRA Paper 71950, University Library of Munich, Germany.
    5. Tiago Freire & J. Vernon Henderson & Ari Kuncoro, 2017. "Volunteerism after the Tsunami: The Effects of Democratization," World Bank Economic Review, World Bank Group, vol. 31(1), pages 176-195.
    6. Scott Yabiku & Sarah Schlabach, 2009. "Social Change and the Relationships Between Education and Employment," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 28(4), pages 533-549, August.
    7. Casson, Mark C. & Della Giusta, Marina & Kambhampati, Uma S., 2010. "Formal and Informal Institutions and Development," World Development, Elsevier, vol. 38(2), pages 137-141, February.
    8. Buck, Steven & Alwang, Jeffrey Roger, 2006. "The Role of Trust in Knowledge Acquisition: Results from Field Experiments in the Ecuadorian Amazon," 2006 Annual meeting, July 23-26, Long Beach, CA 21139, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Takahashi, Motoki, 2017. "Enterprise promotion in the road construction sector in a conflict-ridden area in Kenya : a solution for the nexus of developmental problems?," IDE Discussion Papers 670, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    10. Fikret Adaman & Oya Pinar Ardic & Didem Tuzemen, 2006. "Network Effects in Risk Sharing and Credit Market Access: Evidence from Istanbul," Working Papers 2006/17, Bogazici University, Department of Economics.
    11. Bartolini, Stefano & Bonatti, Luigi, 2008. "Endogenous growth, decline in social capital and expansion of market activities," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 917-926, September.
    12. Labonne, Julien & Chase, Robert S., 2010. "A road to trust," Journal of Economic Behavior & Organization, Elsevier, vol. 74(3), pages 253-261, June.
    13. Shoji, Masahiro & Aoyagi, Keitaro & Kasahara, Ryuji & Sawada, Yasuyuki & Ueyama, Mika, 2012. "Social Capital Formation and Credit Access: Evidence from Sri Lanka," World Development, Elsevier, vol. 40(12), pages 2522-2536.
    14. Lu Ming & Zhao Chen & Yongqin Wang & Yan Zhang & Yuan Zhang & Changyuan Luo, 2013. "China’s Economic Development," Books, Edward Elgar Publishing, number 14502.
    15. Labonne, Julien & Chase, Robert S., 2008. "A road to trust," Policy Research Working Paper Series 4706, The World Bank.
    16. Shoji, Masahiro & Aoyagi, Keitaro & Kasahara, Ryuji & Sawada, Yasuyuki, 2010. "Motives behind Community Participation," Working Papers 16, JICA Research Institute.
    17. Miller, Douglas L. & Scheffler, Richard & Lam, Suong & Rosenberg, Rhonda & Rupp, Agnes, 2006. "Social capital and health in Indonesia," World Development, Elsevier, vol. 34(6), pages 1084-1098, June.
    18. Vial, Virginie & Hanoteau, Julien, 2015. "Returns to Micro-Entrepreneurship in an Emerging Economy: A Quantile Study of Entrepreneurial Indonesian Households’ Welfare," World Development, Elsevier, vol. 74(C), pages 142-157.
    19. A. Lasagni & E. Lollo, 2011. "Participation in Rotating Savings and Credit Associations in Indonesia: New Empirical Evidence on Social Capital," Economics Department Working Papers 2011-EP05, Department of Economics, Parma University (Italy).

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