Violence and social capital: Evidence of a microeconomic vicious circle
We test with a randomized experiment in the slums of Nairobi whether violence suffered during the 2007 political outbreaks affects trustworthiness learning when participants live group experiences and face opportunism and free riding in public good games (PGGs) between two subsequent trust games (TGs). Our findings document that participants move toward balanced reciprocity after the PGG with the exception of those who have experienced directly or indirectly physical violence and/or forced relocation who exhibit significantly less trustworthiness in the second TG round. Results are robust to several robustness checks controlling for selection into victimization. Since in a framework of asymmetric information and incomplete contracts, trust games mimic sequential economic exchanges whose functioning is crucial to economic growth, we argue that our results identify a microeconomic nexus among socio-political instability, violence and growth helping to solve identification problems of the cross-country literature on the subject.
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- Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2003.
"Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score,"
Econometric Society, vol. 71(4), pages 1161-1189, 07.
- Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2000. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," NBER Technical Working Papers 0251, National Bureau of Economic Research, Inc.
- Guido Imbens, 2000. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," Econometric Society World Congress 2000 Contributed Papers 1166, Econometric Society.
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