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Social Capital, Institutional Accessibility and Local Governance

Periodic Reporting for period 1 - socialog (Social Capital, Institutional Accessibility and Local Governance)

Reporting period: 2016-01-04 to 2018-01-03

The issue addressed in this Fellowship has been to study how a country’s quality of Institutions affects the form, function and societal returns of Social Capital (SC). SC refers to features of social life, such as social trust, norms of reciprocity, and mutual aid that give value to social networks. SC is expected to contribute to a country’s welfare by making citizens collaborate towards society’s desirable goals. If people of a country trust each other, they are more prone to contribute to the public goods, by paying their taxes for example. The basic hypothesis set out to be tested here was whether, when the formal institutions “fail” their citizens in either a political (political instability), economic (unemployment, depression) societal (corruption, political scandals), executional (inefficiency in provision of public good) or administrative (high bureaucratic procedures) level, SC takes a form that work as a substitute rather as a complement to the formal Institutions. Under this hypothesis, trustful citizens in countries with low quality of Institutions, will be less inclined to be civic citizens (i.e. social via the formal channels of the State). More technically, the Fellow tried to test whether the quality of Institutions moderate the effect SC has on civic cooperation.
This is an important and a very timely topic. European governments and the public institutions were proved not ready to handle the challenges brought by the 2008 budget crisis and the large refugees waves, leaving their citizens largely unprotected in many cases. As a response a large number of social movements were founded in order to face the challenges that the formal institutions could not address. However, these movements did not always coordinate with the established forms of public goods provision of the governments. For example, local markets were organized where people traded basic goods in low, affordable prices, but without paying taxes. What is more, these movements, adopted in many cases a more general anti-government character, like the “I do not pay” movement in Greece, were citizens are refusing pay taxes or the fees for public transportation. Therefore, while SC has evidently increased, it took an ostensibly “un-civic” form in the traditional sense. In other words, people seem to be social but not civic. Apart from the short-term consequences of these form of SC (such as lowering tax revenues), they might also be contributing to long term anti-government attitudes which might have a severe effect for the proper function of modern States.
Therefore, the objective of the Fellowship was to study and quantify the effects of institutional quality in shaping the SC-civic behaviour relationship. The ultimate goal of is to inform policy makers regarding the potential backfire of policies aimed to enhance Social Capital, and how such an effect can be avoided.
To accomplish the above goal, the fellow collected primary data from various countries in order to study the relationship between social capital and civic behaviour as a function of the Institutions of the country. In particular, a novel economic experiment was designed that allowed to measure and quantify individual-level social capital, as well as social and civic behaviour. The experiment was run in 14 European countries with varying score in the Quality of Governance index as published by the World Bank (from high to low): (1) Denmark, (2) Austria, (3) Germany, (4) United Kingdom, (5) France, (6) Cyprus, (7) Poland, (8) Spain, (9) Slovakia, (10) Greece, (11) Romania, (12) Bulgaria, (13) Turkey and (14) Albania.
The experiment was computerized and took place in laboratories (PC rooms) in university facilities in each country. Approximately 140 university students participated in the experiment in each location. They played a Public Good game where individuals are grouped into teams of four and have to decide whether to allocate their funds (approximately 10 euros each given to the participants by the experimenters) into an individual or a public fund. The individual fund is individually profit maximizing, whereas the public fund is collectively more efficient (all four members gain profit). In each country two versions of the game were played. One basic version, where social behaviour was measured based on the number of members that decided to allocate their funds in the group account; and another version measuring civic behaviour, where in case of allocation in the public fund, funds were taxed and therefore a small part of the money was sent to the Ministry of Finance of the respective country. This version simulated tax payment where if an individual decides to be social she must also pay taxes (i.e. be civic). Additionally, individuals’ social capital was measured employing questionnaire methodology.
The fellow travelled and supervised the experiments in each country, making sure the same procedures were followed. Subsequently, data were analysed, and results were further explored, combining this dataset with that of large-scale multi-country databases, such as the European (and World) Values Survey, Eurobarometer and the European Social Survey. A policy report is being drafted in order for the results to be communicated to the European Commission channels (where the fellow maintains professional contacts). Additionally, two academic papers are being prepared for publication in Economics and general interest academic journals.
So far, the literature has focused only on social behaviour failing to make the distinction between social and civic behaviour. This distinction however is necessary for unravelling the fundamental effect that the quality of Institutions might have on peoples’ behaviour. This is also the reason that that potential “un-civic” form of Social Capital has not been documented until now. The resent framework allowed for the mediating role of quality of institutions on the social capital-civic behaviour to emerge. Data analysis clearly shows that in countries with low Quality of Governance, SC is positively related with social behaviour and negatively related with civic behaviour. For the high Quality of Governance countries in contrast, SC fuels both social and civic behaviour.
These results might help inform policy makers and in particular in the domain of enhancing SC programmes. These programmes are increasing in number and are becoming a central feature in the toolbox of policy makers around the world. The results of this Fellowship suggest that these programs may be unsuccessful in boosting SC if they do not simultaneously address the more fundamental issue of the quality of Institution. What is more, in the presence of more general anti-government attitudes, it suggests that SC might backfire leading to reduced civic attitudes.
lab experiments