Alfred Marshall lecture: Social capital as good culture

Luigi Guiso*, Paola Sapienza, Luigi Zingales

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

231 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)295-320
Number of pages26
JournalJournal of the European Economic Association
Volume6
Issue number2-3
DOIs
StatePublished - Apr 2008

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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