Do Welfare Programs Damage Interpersonal Trust? Experimental Evidence from Representative Samples for Four Latin American Cities

Alberto Chong, Hugo Ñopo and Vanessa Rios

No 4609, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: This paper argues that welfare programs are linked with the destruction of social capital, as measured by interpersonal trust in laboratory games. The paper employs experimental data for representative samples of individuals in four Latin American capital cities (Bogota, Lima, Montevideo, and San Jose), finding that participation in welfare programs damage trust. This result is robust to the inclusion of individual risk measures and a broad array of controls. The findings also support the notion that low take-up rates may be due to stigma linked with trust and social capital, rather than transaction costs.

Keywords: Experiments; Surveys; Social Programs; Trust; Stigma; Latin America (search for similar items in EconPapers)
JEL-codes: D01 O10 O12 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-dev, nep-exp, nep-lam and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Do Welfare Programs Damage Interpersonal Trust?: Experimental Evidence from Representative Samples for Four Latin American Cities (2009)
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