Social Capital, Trust, and Multiple Equilibria in Economic Performance
We propose a novel mechanism giving rise to poverty traps and multiple equilibria in economic performance. It is a potentially important source of persistent underdevelopment across countries and regions. At the core of this mechanism, bridging social capital and social trust feed back on each other, interdependently affecting individuals' earnings and subjective well-being. High trust and abundant bridging social capital reinforce each other, leading to a "high" equilibrium where both these variables take persistently high values, and earnings and well-being are high as well, whereas low trust and lacking bridging social capital create a vicious circle, leading to a "low trust trap" where all these variables are persistently low. The workings of our theoretical model are in agreement with a wide range of findings from the contemporary literature in sociology and social psychology.
|Date of creation:||22 Dec 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- FALL, Falilou, 2005.
"Endogenous persistent inequality,"
CORE Discussion Papers
2005094, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Falilou Fall, 2005. "Endogenous persistent inequality," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00196084, HAL.
- Falilou Fall, 2005. "Endogenous persistent inequality," Cahiers de la Maison des Sciences Economiques v05059, Université Panthéon-Sorbonne (Paris 1).
- Robert Tamura, 2001. "Teachers, Growth, and Convergence," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 1021-1059, October.
- Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
- Piketty, Thomas, 1997. "The Dynamics of the Wealth Distribution and the Interest Rate with Credit Rationing," Review of Economic Studies, Wiley Blackwell, vol. 64(2), pages 173-89, April.
- Buly A Cardak, 2001.
"Education Choice, Neoclassical Growth and Class Structure,"
2001.07, School of Economics, La Trobe University.
- Buly A. Cardak, 2004. "Education choice, neoclassical growth, and class structure," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 643-666, October.
- Buly A Cardak, 2001. "Education Choice, Neoclassical Growth and Class Structure," Working Papers 2001.07, School of Economics, La Trobe University.
- Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
- Rangazas Peter C, 2005. "Human Capital and Growth: An Alternative Accounting," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-43, September.
- Jess Benhabib & Mark Spiegel, 2002.
"Human capital and technology diffusion,"
Federal Reserve Bank of San Francisco, issue Nov.
- Jim Davies, 2003.
"Empirical Evidence on Human Capital Externalities,"
University of Western Ontario, Economic Policy Research Institute Working Papers
20035, University of Western Ontario, Economic Policy Research Institute.
- Sjoerd Beugelsdijk & Sjak Smulders, 2003. "Bridging and Bonding Social Capital: which type is good for economic growth?," ERSA conference papers ersa03p517, European Regional Science Association.
- Helliwell, John F., 2003.
"How's life? Combining individual and national variables to explain subjective well-being,"
Elsevier, vol. 20(2), pages 331-360, March.
- John F. Helliwell, 2002. "How's Life? Combining Individual and National Variables to Explain Subjective Well-Being," NBER Working Papers 9065, National Bureau of Economic Research, Inc.
- Azariadis, Costas & Drazen, Allan, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 501-26, May.
- Aghion, Philippe & Bolton, Patrick, 1997. "A Theory of Trickle-Down Growth and Development," Review of Economic Studies, Wiley Blackwell, vol. 64(2), pages 151-72, April.
- Katarzyna Growiec & Jakub Growiec, 2011. "Trusting Only Whom You Know, Knowing Only Whom You Trust: The Joint Impact of Social Capital and Trust on Individuals' Economic Performance and Well-Being in CEE Countries," EcoMod2011 2762, EcoMod.
- Growiec, Katarzyna & Growiec, Jakub, 2010. "Trusting Only Whom You Know, Knowing Only Whom You Trust: The Joint Impact of Social Capital and Trust on Individuals' Economic Performance and Well-Being in CEE Countries," MPRA Paper 23350, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:19518. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.