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Links and Architecture in Village Networks (previously: Endogenous Network Formation and Informal Institutions in Village Economies)

  • Krishnan, P.
  • Sciubba, E.

This paper o¤ers a bridge between the theoretical literature on endogenous network formation and the empirical work on the impact of social networks on economic performance. We provide a theoretical framework of endogenous network formation that yields testable predictions for the network architectures generated by a particular informal institution common in village economies. We test the implications of the model on data from rural Ethiopia. In contrast to the current literature, we demonstrate the critical role of both number of links and architecture in determining the impact of social networks on outcomes.Social capital matters, but its impact di¤ers by the architecture of the network to which one belongs.

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File URL: http://www.econ.cam.ac.uk/research/repec/cam/pdf/cwpe0462.pdf
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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0462.

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Length: 32
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:cam:camdae:0462
Note: DE
Contact details of provider: Web page: http://www.econ.cam.ac.uk/index.htm

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  1. Besley, T. & Coate, S. & Loury, G., 1990. "The Economics Of Rotating Savings And Credit Associations," Working papers 556, Massachusetts Institute of Technology (MIT), Department of Economics.
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  12. De Weerdt, Joachim, 2002. "Risk-Sharing and Endogenous Network Formation," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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  18. Grimard, Franque, 1997. "Household consumption smoothing through ethnic ties: evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 53(2), pages 391-422, August.
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