File2-page210 - Social Networks They found that local...

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Unformatted text preview: Social Networks They found that local government efficacy in Italy higher in regions with higher social capital. Demise of social capital in modern US, i.e., “bowling alone.” Think of social capital as a set of nodes that can be connected by links. Social capital specifically is a measure of the number of links. “Social”, because it is embodied in the links between individuals, “capital”, because it increases income without being consumed in use of doing so. Social capital is typically proxied by the measures of “associational activities,” – i.e., being a member of ethnic, religious or civic group etc. Some societies are more polarised along ethnic or income dimensions. The hypothesis (which is always up for testing) is that less close-knit the society, less social capital it possess. Does this affect policy choices in (i) public good provision and (ii) economic performance. Channels of Effect Strand 1: The free rider story Less ethnic diversity leads to less polarisation and thus, more social capital, better information flow and more cooperation. Problems with collective action: – greater supply of public goods – commons less tragic – information as a public good, i.e., technology diffusion or learning from other’s mistakes. Strand 2: Asymmetric information story Less ethnic diversity leads to less polarisation and thus, more social capital, better information flow and more cooperation. Less ethnic diversity – less polarisation – more social capital – better information flow Development Economics, LSE Summer School 2007 207 ...
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This note was uploaded on 12/29/2011 for the course ECO 307 taught by Professor Dublin during the Spring '10 term at SUNY Stony Brook.

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