Was Banfield Right? New Insights from a Nationwide Laboratory Experiment

The north-south gap in Italian social capital has been considered by international scholars as an example of how cultural diversity within a country can generate different developmental outcomes. Most studies, however, suffer from limited external validity and measurement-error problems. This paper exploits a new and representative online lab-experiment to assess social capital patterns in Italy. Our study only partially confirms previous findings: northerners perform better in trustworthiness, but they are statistically similar to southerners in many other economic preferences such as cooperation, trust, expected trustworthiness, altruism, and risk tolerance. A novelty of this study is that the gap in trustworthiness stems from the lower reciprocity of southerners in response to large transfers from trustors, and it is characterized by the intergenerational transmission of norms. Effective convergence policies should target, within social capital, reciprocity, while looking to other, and perhaps more compelling gaps.