Germs, Social Networks, and Growth

Unbundling Institutions

Alessandra Fogli and Laura Veldkamp

The Review of Economic Studies, 2021, vol. 88, issue 3, 1074-1100

Abstract: Does the pattern of social connections between individuals matter for macroeconomic outcomes? If so, where do differences in these patterns come from and how large are their effects? Using network analysis tools, we explore how different social network structures affect technology diffusion and thereby a country’s rate of growth. The correlation between high-diffusion networks and income is strongly positive. But when we use a model to isolate the effect of a change in social networks on growth, the effect can be positive, negative, or zero. The reason is that networks diffuse both ideas and disease. Low-diffusion networks have evolved in countries where disease is prevalent because limited connectivity protects residents from epidemics. But a low-diffusion network in a low-disease environment compromises the diffusion of good ideas. In general, social networks have evolved to fit their economic and epidemiological environment. Trying to change networks in one country to mimic those in a higher-income country may well be counterproductive.

Keywords: Growth; Development; Technology diffusion; Economic networks; Social networks; Pathogens; Disease; E02; O1; O33; I1 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://hdl.handle.net/10.1093/restud/rdab008 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Germs, Social Networks and Growth (2018)
Working Paper: Germs, Social Networks, and Growth (2018)
Working Paper: Germs, Social Networks and Growth (2014)
Working Paper: Germs, Social Networks and Growth (2012)
Working Paper: Germs, Social Networks and Growth (2012)
Working Paper: Germs, Social Networks, and Growth (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:88:y:2021:i:3:p:1074-1100.

Access Statistics for this article

The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

More articles in The Review of Economic Studies from Review of Economic Studies Ltd
Bibliographic data for series maintained by Oxford University Press ().