Social Capital, Trust, and Multiple Equilibria in Economic Performance

Katarzyna Growiec and Jakub Growiec

MPRA Paper from University Library of Munich, Germany

Abstract: We propose a novel mechanism giving rise to poverty traps and multiple equilibria in economic performance. It is a potentially important source of persistent underdevelopment across countries and regions. At the core of this mechanism, bridging social capital and social trust feed back on each other, interdependently affecting individuals' earnings and subjective well-being. High trust and abundant bridging social capital reinforce each other, leading to a "high" equilibrium where both these variables take persistently high values, and earnings and well-being are high as well, whereas low trust and lacking bridging social capital create a vicious circle, leading to a "low trust trap" where all these variables are persistently low. The workings of our theoretical model are in agreement with a wide range of findings from the contemporary literature in sociology and social psychology.

Keywords: bridging social capital; social trust; earnings; subjective well-being; multiple equilibria; poverty trap (search for similar items in EconPapers)
JEL-codes: D10 J22 O11 (search for similar items in EconPapers)
Date: 2009-12-22
New Economics Papers: this item is included in nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/19518/1/MPRA_paper_19518.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/39976/2/MPRA_paper_39976.pdf revised version (application/pdf)

Related works:
Journal Article: SOCIAL CAPITAL, TRUST, AND MULTIPLE EQUILIBRIA IN ECONOMIC PERFORMANCE (2014)
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:pra:mprapa:19518

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().