Identity, civic capital, and the narrow path

Robert Funk and Velasco, Andrés

No 19035, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: How to induce pro-social and civic behavior among our fellow beings? The question is as old as human society. We build a model in which identities à la Akerlof and Kranton (2010) help select equilibria that feature civic behaviour, following the original insight of Hume (1751). The model jointly determines identities, trust, and civic capital in a fully dynamic setting. Because of strategic complementarities, there are two steady steady-states that can be Pareto ranked. Starting from an abundant stock of civic capital, the resulting level of trust is high and society follows a “narrow path†to the high-trust, abundant-civic-capital steady state. The opposite happens if society starts from a low stock of civic capital. For moderate initial levels of civic capital, identities are not enough to pin down the equilibrium, and self-fulfilling prophecies can occur: once citizens stop trusting and come to believe others will behave un-civically, they change their behavior in ways that ensure that un-civic behaviour will occur. When we introduce one-time psychological costs of switching identities, the unique equilibrium can involve frozen levels of trust and civic capital. Since such equilibria only occur at moderate stocks of civic capital, and echoing the idea of a middle-income trap, we call this the “middle-civility trap†.

Date: 2024-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP19035 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
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:cpr:ceprdp:19035

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP19035
orders@cepr.org

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by (repec@cepr.org).