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

Vanessa Ríos, Alberto Chong and Hugo Ñopo

No 1639, IDB Publications (Working Papers) from Inter-American Development Bank

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: WP-668 (search for similar items in EconPapers)
JEL-codes: D01 O10 O12 (search for similar items in EconPapers)
Date: 2009-01
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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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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:1639

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