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When Consumption Generates Social Capital: Creating Room for Manoeuvre for Pro-Poor Policies

Author

Listed:
  • Leonardo Becchetti

    () (University of Tor Vergata)

  • Melania Michetti

    (Fondazione ENI Enrico Mattei and Università Cattolica del Sacro Cuore - Milano)

Abstract

Economic interactions are often accused of being neutral, or even of generating adverse effects, not only on the social fabric but also on a factor (social capital) which is regarded as the foundation of both socio-economic activity and prosperity. In this paper we document how a particular form of economic interaction (affiliation of marginalised producers to a first level association and to the fair trade import channel) has indeed positive effects on a specific type of social capital. Our findings on a sample of Kenyan farmers show that years of affiliation to Fair Trade significantly affect the participation in elections and the trust placed in trade unions, political parties and the government, net of the impact of other controls and after accounting for the selection bias effect. This implies that consumers buying fair trade products contribute to reinforce both social cohesion and the institutions in countries in which these variables are fundamental in creating room for manoeuvre for pro-poor (equity plus growth) policies.

Suggested Citation

  • Leonardo Becchetti & Melania Michetti, 2008. "When Consumption Generates Social Capital: Creating Room for Manoeuvre for Pro-Poor Policies," Working Papers 88, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2008-88
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2008-88.pdf
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    References listed on IDEAS

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    1. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    2. Alberto Alesina & Eliana La Ferrara, 2000. "The Determinants of Trust," NBER Working Papers 7621, National Bureau of Economic Research, Inc.
    3. Schiff, Maurice, 1999. "Labor market integration in the presence of social capital," Policy Research Working Paper Series 2222, The World Bank.
    4. repec:wbk:wbpubs:28198 is not listed on IDEAS
    5. Dora L. Costa & Matthew E. Kahn, 2001. "Understanding the Decline in Social Capital, 1952-1998," NBER Working Papers 8295, National Bureau of Economic Research, Inc.
    6. repec:ilo:ilowps:357069 is not listed on IDEAS
    7. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, pages 137-158.
    8. Montalvo, Jose G. & Reynal-Querol, Marta, 2005. "Ethnic diversity and economic development," Journal of Development Economics, Elsevier, pages 293-323.
    9. Redfern, Andy. & Snedker, Paul., 2002. "Creating market opportunities for small enterprises : experiences of the fair trade movement," ILO Working Papers 993570693402676, International Labour Organization.
    10. LeClair, Mark S., 2002. "Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade," World Development, Elsevier, vol. 30(6), pages 949-958, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ruben, Ruerd & Fort, Ricardo, 2012. "The Impact of Fair Trade Certification for Coffee Farmers in Peru," World Development, Elsevier, vol. 40(3), pages 570-582.

    More about this item

    Keywords

    Fair trade; social capital; impact study;

    JEL classification:

    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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