Alfred Marshall Lecture Social Capital as Good Culture

Luigi Guiso, Paola Sapienza and Luigi Zingales

Journal of the European Economic Association, 2008, vol. 6, issue 2-3, 295-320

Abstract: To explain the extremely long-term persistence (more than 500 years) of positive historical experiences of cooperation (Putnam 1993), we model the intergenerational transmission of priors about the trustworthiness of others. We show that this transmission tends to be biased toward excessively conservative priors. As a result, societies can be trapped in a low-trust equilibrium. In this context, a temporary shock to the return to trusting can have a permanent effect on the level of trust. We validate the model by testing its predictions on the World Values Survey data and the German Socio Economic Panel. We also present some anecdotal evidence that these priors are reflected in novels that originate in different parts of the country. (JEL: O4, O16, O43, P16) (c) 2008 by the European Economic Association.

JEL-codes: O16 O4 O43 P16 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (307)

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