An Experimental Approach to Social Capital in South Africa

This paper measures the social capital of trust and trustworthiness in South Africa using an experimental protocol designed to distinguish these norms from altruism. Experimental participants played multiple roles, making it impossible to construct theoretically-grounded norm measures based on an individual's play across roles. Two-stage estimates of a social interaction model of norms identifies the presence of endogenous social effects, indicating that communities can be meaningfully typified as having and maintaining distinct normative environments. However, in contrast to studies that rely on less direct social capital measures, we do not find that trust boosts mean household living standards when controlling for the endogeneity of norms.