The literature has credited social capital with a role in many economically relevant phenomena, from the efficiency of markets and public institutions to growth. However, the multidimensionality of the concept, the problems in its measurement and the shortage of data have made it difficult to disentangle the sources of social capital and to identify its causal linkage with economic outcomes. This project aims at exploring the roots and the outcomes of social capital by adopting a twofold strategy that relies on new data and methods.
1) As previous studies suggest that the accumulation of social capital is a path dependent process that develops over centuries, we will employ historical analyses to search for exogenous sources of variation of social capital that are rooted in the deep past.
In addition to improving our comprehension of the roots of the phenomenon, this task entails the development of new strategies for reliably identifying the impact of social capital on its hypothetical outcomes.
2) Even though a component of social capital is persistent over time, quick changes in its stock can still occur in response to specific events or policies. The project aims to explore the role of specific exogenous shocks such as terrorism and earthquakes. To this purpose, we will develop a new methodology for measuring social capital and its possible sources of variation "in real time" through the exploitation of big data.
The outcomes of this project will add to the existing literature in three substantial ways, through: 1) The identification of so far unexplored historical sources of social capital. 2) The building and exploitation of novel data sources for building new measurement methods and identification strategies. 3) The provision of the first empirical analysis of how social capital relates to the exogenous shocks possibly determined by terrorism and natural disasters, whose potential effects were never investigated in the economics literature before.
Despite the huge attention that social capital has raised in the social science and policy debates, we still have a limited knowledge of its roots and consequences. This project will innovate the literature in several substantial ways.
1) The spreading of the Italian Società di mutuo soccorso along the 19th century and the exodus of the French Huguenots between the 16th and 17th century constitute historical natural experiments that were never addressed in the economics literature before.
To the best of our knowledge, this project will be the first to exploit these experiments as exogenous sources of variation in the levels of social and human capital to the purpose of identifying their effect on a series of economically relevant outcomes such as the efficiency and fairness of public institutions, the incidence of prosocial behaviors and per capita income.
2) Recent studies have proved that cities that were self-governed in the Middle Ages developed persistently higher levels of social capital over the following centuries. We propose the first empirical investigation into the roots of the transition to self-government, focusing on the creation of the first universities in Northern Italy between the 11th and the 14th centuries.
3) To complement the analysis, we will build an evolutionary framework to theoretically analyse the establishment and long-term development of the social norms that can lead to the emergence of non-exploitative institutions. Bowles and Gintis (2002) suggested that group social interactions endogenously shape institutions. Dixit (2003) showed that self-enforcing honesty and cooperation could only survive in a small world. Greif (1994) claimed that when two segregated, one collectivist and one individualist, communities start to interact, pre-existing institutional arrangements may be no longer sustainable. Belloc (2009) modelled such a mechanism triggered by the integration shock and showed under which conditions this is true. In this part of the project, we will exploit an evolutionary model of endogenous preferences and institutions (Belloc and Bowles, 2017) to investigate whether cooperation and other pro-social behaviors are sustainable after the exposition to different societal models, which rely, e.g., on individualistic and rule-based arrangements. As long as cooperation is efficiency enhancing, the public policy can play a role in designing the incentives to achieve the desirable evolution path.
4) As it concerns the role of exogenous shocks, our project will be the first to exploit big data to analyse the roots and effects of terrorism. Merging Google data with existing information about terrorist attacks and individual radicalization will lead to set up a unique dataset probably providing the most comprehensive academic source of information about terrorism and culture. The resulting database will allow conducting unprecedented empirical analyses about the possible impact of the terrorist threat on trust, social cohesion, civic and political engagement, and prosocial behavior.
5) A better understanding of the cultural, social and political causes and consequences of terrorism could provide crucial policy implications concerning the prevention of radicalization and attacks. As this topic is tightly connected with the political agenda throughout the world, its development could likely attract funding from European and other international agencies to the Sapienza University of Rome in the short term.
6) Finally, our project will be the first to exploit detailed data from a national Strong Motion Network to assess the impact of earthquakes on social capital. Our findings could help designing strategies to cope with the societal and economic outcomes of natural disasters and to support a faster recovery, which is a crucial issue in a country with a high seismic risk like Italy.
References
Belloc M. (2009). Cross-Cultural Trade and Institutional Stability. B.E. Journal of Theoretical Economics 9: 34.
Belloc M., S. Bowles (2017). Persistence and Change in Culture and Institutions under Autarchy, International Trade, and Factor Mobility. American Economic Journal: Microeconomics, forthcoming.
Bowles, S., Gintis, H. (2002). Social Capital and Community Governance, Economic Journal 112, F419-F436.
Dixit AK. (2003). Trade Expansion and Contract Enforcement, Journal of Political Economy 111: 1293-1317.
Greif A. (1994). Cultural Beliefs and the Organization of Society: a Historical and Theoretical Reflection on Collectivist and Individualist Societies, Journal of Political Economy 102: 912-50.