+ Measuring Social Capital Michael J. Gilligan, New York University

+

Measuring Social Capital

Michael J. Gilligan, New York University

+Social Capital: Definitions

“institutions, relationships, attitudes, and values that govern interactions among people and contribute to economic and social development” (Grootvaert and Bastelaer, 2002).

They divide social capital into three categories: “Structural” membership in associations and networks “Cognitive” trust and adherence to norms “Collective action”

We are mainly interested in three behaviors/attitudes: Trust Trustworthiness Obligation, i.e. willingness to contribute to joint community

endeavors

+Implications for Conflict Prevention and Development

Trust: crucial for cost-effective self enforcement of contracts and peace agreements

Obligation: Compliance with social norms: non-violence, compromise, fairness

Obligation: contributions to public goods

Obligation: Respect for legitimate sources of authority

+A Few Findings (among many)

Putnam (1993) shows that local governments in Italy are more efficient where there is greater civic engagement.

Knack and Keefer (1997) demonstrate that increases in country-level trust lead to large increases in the country’s economic growth.

La Porta et. al. (1997) establish a strong positive link between trust and judicial efficiency and a strong negative link between trust and corruption.

+Implications

Because social capital is linked to development and post conflict peace the World Bank and other international actors have many programs to foster the growth of social capitalCommunity-based DDRCommunity-driven development

programsA focus on local capacity in

peacekeeping efforts“Local ownership” of development and

peacebuilding programs

+Measuring Social Capital

These are very difficult concepts to measureIn many cases they are not observed

directlyIndicators differ greatly across different

cultures

Three sorts of measures can be employed”ObservationalSurveyBehavioral

+Familiarization

Community Tours

Interviews with local leaders

Focus groups

Including locals on the team is crucial

+Community Observation

Focus group discussion

Crime reports

School attendance

Upkeep of public spaces

Use of public space

Participation at public events—very context dependent, so be careful!

+Surveys

Collective ActionCommunity clean-ups, road building,

church raising etc.Cooperatives: financial, child care,

agricultural, fishing, etc.Peaceful political activities, for

example lobbying of central government

+ Surveys

Community associationsList of those that are activeActivitiesMembership: both individual level and

total

+Surveys

Attitudinal questionsIs this a good place to raise children?I am proud of my communityLocal community leaders are

honest/indifferent/corruptAnd many others

+Behavioral activitiesCommunity observation and surveys

can fail to uncover true individual social attitudes.

Behavioral group activities can be better measures because they isolate and incentivize the precise attitudes and behavior we need to measure.

These are referred to as “games” in the academic literature, but that name understates their seriousness as an effective tool for measuring social capital

+Behavioral games

Four important games are:Risk gameAltruism game Trust game Public goods game

Our main interest is in trust and public goods games, but we also need to conduct risk and altruism games to control for risk attitudes and altruism

+Game Instruction

+Physical Set up

+LotteryMeasures subjects’ attitudes toward risk

It is important to control for this attitude because behavior that appears to be trust may really be risk acceptance

+Example from Nepal

Lottery Heads Tails1 40 402 30 503 20 604 10 705 0 80

+Nepal Lottery Choices

Lottery Freq. Percent Cum.

------------+-----------------------------------

1 | 50 39.06 39.06

2 | 28 21.88 60.94

3 | 21 16.41 77.34

4 | 12 9.38 86.72

5 | 17 13.28 100.00

------------+-----------------------------------

Total | 128 100.00

+Altruism Game

Subjects were given a sum of money In Nepal 40 NPR in 5 NPR notes

Subjects are asked how much they wanted to contribute to a local needy family

The identity of the family is not revealed

+

+Altruism Game: Amount SentExample from Nepal

Sent Freq. Percent Cum.

0 16 6.35 6.355 52 20.63 26.98

10 75 29.76 56.7515 15 5.95 62.720 59 23.41 86.1125 3 1.19 87.330 3 1.19 88.4935 6 2.38 90.8740 23 9.13 100

Total 252 100

+Trust Game

Subjects are randomly assigned to one of two roles: sender or receiver

Both types are given initial endowment of money

Senders decide how much of their endowment to send to the receiver

We triple that amount and give it to the receiver

The receiver decides how much of this total to return to the sender

All players and types are anonymous

Nash: send zero, return zero

Social optimum: send full endowment, return whatever

+Trust

Different than “trustworthiness” (Glaeser et. al)

Confounded with risk aversion (Schechter 2006)

Confounded by feelings of altruism and fairness (Cox 2002)

Confounded with patience (de Oliviera et. al 2010)

+Public Goods Game

All subjects play simultaneously

Each player is given two cards, one with an “X” and one blank

For each “X” card turned in in the first round all players receive an amount of money, say 4NPR

Turning in an “X” card in the second round earns the player that turned it in a larger amount, say 20 NPR

Nash: keep “X” card

Social optimum: everyone turns in “X” card

+Example from Nepal:Does exposure to Conflict Affect Social Capital?Victimization may lead to lack of trust

Difficult circumstances may force communities to work together

If the former a vicious cycle could result

An answer is important for transitional programming.

Blattman (2009) and Voors et. al. (2009) using different measures have found a positive link between conflict exposure and social capital

+Trust: Amount sent

+Trust: Percent returned

+Effect of Conflict on Trust

Variable | Coef. Std. Err. T-stat----------------------------------------------------------------------Dictator sent .1457.029 5.09Log income -.532 .213

-2.49Log Family Mem. .619 .465 1.33 Conflict area 1.257 .722

1.74Constant 7.297 2.738

2.67

N = 93Standard error are clustered on village

+ Effect of Conflict on Trustworthiness

Variable Coef. Std. Err. T-stat

----------------------------------------------------------------------Sender sent 1.053 .246

4.28Log income -.0187 .213

-0.09Log Family Mem. 1.674 1.979 0.85Dictator sent .254 .0749

3.39Conflict Area 1.172 1.095

1.07Constant -5.216 3.863

-1.35

N = 88Standard errors clustered on village

+Public goods and Conflict

Variable Coef. Std. Err. Z-stat

--------------------------------------------------------------------------Log income 0.185 0.102

1.82Log Family Mem. -0.471 0.186

-2.53Conflict Area -0.527 0.270

-1.95Constant -1.673 1.125

-1.49

N = 178Standard errors clustered on village

+Summary of findings

Conflict is associated with…(1) A greater willingness to provide public goods (2) Higher levels of trust (3) But not higher levels of trustworthiness.

+Conclusion

Social capital is an important component of post-conflict stability and economic development

Many development programs are designed to foster the growth social capital

The extent to which these programs accomplish this goal is an important evaluative criterion of these programs

Social capital is measurable by observational survey and behavioral measures