Fabio Sabatini

The Empirics of Social Capital and Economic Development: A Critical Perspective

This paper provides an introduction to the concept of social capital, and carries out a critical review of the empirical literature on social capital and economic development. The survey points out six main weaknesses affecting the empirics of social capital. Identified weaknesses are then used to analyze, in a critical perspective, some prominent empirical studies and new interesting researches published in last two years. The need emerges to acknowledge, also within the empirical research, the multidimensional, context-dependent and dynamic nature of social capital. The survey also underlines that, although it has gained a certain popularity in the empirical research, the use of “indirect” indicators may be misleading. Such measures do not represent social capital’s key components identified by the theoretical literature, and their use causes a considerable confusion about what social capital is, as distinct from its outcomes, and what the relationship between social capital and its outcomes may be. Research reliant upon an outcome of social capital as an indicator of it will necessarily find social capital to be related to that outcome. This paper suggests to focus the empirical research firstly on the “structural” aspects of the concept, therefore excluding by the measurement toolbox all indicators referring to social capital’s supposed outcomes.

Does Social Capital Create Trust? Evidence from a Community of Entrepreneurs

Which kind of social capital fosters the diffusion of development-oriented trust? This paper carries out an empirical investigation into the causal relationships connecting four types of social capital (i.e. bonding, bridging, linking, and corporate), and different forms of trust (knowledge-based trust, social trust, trust towards public services and political institutions), in a community of entrepreneurs located in the Italian industrial district of the Tuscia. Our results suggest that the main factors fostering the diffusion of social trust among entrepreneurs are the perception that the local community is a safe place, and the establishment of corporate ties through professional associations. Trust in people is positively and significantly correlated also to higher levels of satisfaction and confidence in public services. Participation in voluntary organizations does not appear to increase trust in people. Rather, we find evidence of the other way round: interpersonal trust seems to encourage civic engagement.

Does social capital improve labour productivity in Small and Medium Enterprises

This paper reports the findings of an empirical study on the relationship between social capital and labour productivity in Small and Medium Enterprises (SMEs) in Italy. By means of Structural Equations Models (SEMs), the analysis investigates the effect of different aspects of the multifaceted concept of social capital. Bonding social capital of strong family ties and bridging social capital shaped by informal ties connecting friends and acquaintances are proved to exert a negative effect on labour productivity, economic performance and human development. On the contrary, linking social capital of voluntary organisations positively influences the stated outcomes.

Economic Growth, Technological Progress and Social Capital: The Inverted U Hypothesis

We set up a theoretical framework to analyse the role of economic growth and technological progress in the erosion of social capital. Under certain conditions on parameters, the relationship between technological progress and social capital can take the shape of an inverted U curve. Furthermore, we show the circumstances that allow the economy to follow trajectories where the stock of social capital grows endogenously and unboundedly.

Resources for the Study of Social Capital

The Social Capital Web site, available in English and Italian, contains useful resources for researchers, teachers, and students interested in social capital and social interactions and in their relationship to human, social, and economic development. Social capital is a multidimensional concept that includes the set of social norms, such as social networks, and organizations that influence relations among people and constitute an asset for the production of well-being. For economics, the concept of social capital can be a useful analytical tool to understand the relational dimension of economic action and to explain some macro phenomena such as growth differentials among similar economies. The Web site contains an extensive and constantly updated reading list that can be used by teachers as a source of bibliographic references for their graduate and undergraduate students. Readings are divided into 30 sections covering topics in micro and macroeconomics, development economics, and institutional economics, both from a theoretical and an empirical point of view. For undergraduate students, the reading list provides an easy access to readings indicated by the course bibliography. For graduate students, it provides constantly updated resources for current debates, giving them the opportunity to broaden their research activity. The Web site includes other useful resources for teaching and learning economics, such as links to conferences, seminars and workshop announcements, and Web sites and databases on topics related to development, growth, and poverty.

Economic Insecurity and Fertility Intentions: The Case of Italy

We aim to provide an explanation for the combination of the relatively low female participation rates and lowest-low fertility levels in Italy. Starting from the assumption that childbearing decisions also depend on uncertainty about future employment, income, and wealth, we empirically assess how fertility intentions are affected by job instability, which may severely compromise the employment stability of workers, and economic disadvantages in terms of household income and wealth, which may imply insufficient means to deal with potential adverse future events, thereby generating in the household feelings of anxiety and economic insecurity. We show that the instability of womens work status (i.e., the holding of occasional and precarious jobs) significantly discourages the decision to attempt having a first child. Low levels of household wealth significantly and positively influence the decision to postpone attempting a first child. The chances of further childbirth are significantly and negatively influenced by household income insecurity.

Online Networks and Subjective Well-Being

We argue that the use of online networks may threaten subjective well-being in several ways, due to the inherent attributes of Internet-mediated interaction and through its effects on social trust and sociability. We test our hypotheses on a representative sample of the Italian population. We find a significantly negative correlation between online networking and well-being. This result is partially confirmed after accounting for endogeneity. We explore the direct and indirect effects of the use of social networking sites (SNS) on well-being in a SEM analysis. We find that online networking plays a positive role in subjective well-being through its impact on physical interactions, whereas SNS use is associated with lower social trust. The overall effect of networking on individual welfare is significantly negative.

Social Capital, Public Spending and the Quality of Economic Development

This paper carries out an empirical assessment of the relationship between social capital and the quality of economic development in Italy. The analysis draws on a dataset collected by the author including about two hundred variables representing different aspects of economic development and four “structural” dimensions of social capital. The quality of development is measured through human development and indicators of the state of health of urban ecosystems, public services, gender equality, and labour markets, while social capital is measured through synthetic indicators representing strong family ties, weak informal ties, voluntary organizations, and political participation. The quality of development exhibits a strong positive correlation with bridging weak ties and a negative correlation with strong family ties. Particularly, the analysis shows a strong correlation between informal ties and an indicator of “social well-being” (synthetizing gender equality, public services and labour markets) and between voluntary organizations and the state of health of urban ecosystems. Active political participation proves to be irrelevant in terms of development and well-being. Finally, the role of public spending for education, health care, welfare work, and the environment protection is analysed, revealing a scarce correlation both with social capital and development indicators.

Civility vs. incivility in online social interactions: an evolutionary approach

Evidence is growing that forms of incivility–e.g. aggressive and disrespectful behaviors, harassment, hate speech and outrageous claims–are spreading in the population of social networking sites’ (SNS) users. Online social networks such as Facebook allow users to regularly interact with known and unknown others, who can behave either politely or rudely. This leads individuals not only to learn and adopt successful strategies for using the site, but also to condition their own behavior on that of others. Using a mean field approach, we define anevolutionary game framework to analyse the dynamics of civil and uncivil ways of interaction in online social networks and their consequences for collective welfare. Agents can choose to interact with others–politely or rudely–in SNS, or to opt out from online social networks to protect themselves from incivility. We find that, when the initial share of the population of polite users reaches a critical level, civility becomes generalized if its payoff increases more than that of incivility with the spreading of politeness in online interactions. Otherwise, the spreading of self-protective behaviors to cope with online incivility can lead the economyto non-socially optimal stationary states. JEL Codes: C61, C73, D85, O33, Z13. PsycINFO Codes: 2240, 2750.

The Fragility of Social Capital

This paper addresses two hot topics of the contemporary debate, social capital and economic growth. Our theoretical analysis sheds light on decisive but so far neglected issues: how does social capital accumulate over time? Which is the relationship between social capital, technical progress and economic growth in the long run? The analysis shows that the economy may be attracted by alternative steady states, depending on the initial social capital endowments and cultural exogenous parameters representing the relevance of social interaction and trust in well-being and production. When material consumption and relational goods are substitutable, the choice to devote more and more time to private activities may lead the economy to a “social poverty trap”, where the cooling of human relations causes a progressive destruction of the entire stock of social capital. In this case, the relationship of social capital with technical progress is described by an inverted U-shaped curve. However, the possibility exists for the economy to follow a virtuous trajectory where the stock of social capital endogenously and unboundedly grows. Such result may follow from a range of particular conditions, under which the economy behaves as if there was no substitutability between relational activities and material consumption.