Do Welfare Programs Damage Interpersonal Trust?: Experimental Evidence from Representative Samples for Four Latin American Cities
This paper argues that welfare programs are linked with the destruction of social capital, as measured by interpersonal trust in laboratory games. The paper employs experimental data for representative samples of individuals in four Latin American capital cities (Bogota, Lima, Montevideo, and San Jose), finding that participation in welfare programs damage trust. This result is robust to the inclusion of individual risk measures and a broad array of controls. The findings also support the notion that low take-up rates may be due to stigma linked with trust and social capital, rather than transaction costs.
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- Nava Ashraf & Colin F. Camerer & George Loewenstein, 2005. "Adam Smith, Behavioral Economist," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 131-145, Summer.
- Alberto Chong & Hugo Ñopo & Juan Camilo Cardenas, 2008. "To What Extent do Latin Americans Trust and Cooperate? Field Experiments on Social Exclusion In Six Latin American Countries," Research Department Publications 4577, Inter-American Development Bank, Research Department.
- Juan Camilo Cárdenas & Alberto E. Chong & Hugo R. Ñopo, 2008. "To What Extent do Latin Americans Trust and Cooperate?: Field Experiments on Social Exclusion In Six Latin American Countries," IDB Publications (Working Papers) 6739, Inter-American Development Bank.
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