TY  - JOUR
AU  - Guiso,Luigi
AU  - Sapienza,Paola
AU  - Zingales,Luigi
TI  - Social Capital as Good Culture
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13712
PY  - 2007
Y2  - December 2007
UR  - http://www.nber.org/papers/w13712
L1  - http://www.nber.org/papers/w13712.pdf
N1  - Author contact info:
Luigi Guiso
Axa Professor of Household Finance
Einaudi Institute for Economics and Finance
Via Sallustiana 62 - 00187
Rome, Italy
Fax: 39 06  4792 4858
E-Mail: luigi.guiso@eief.it

Paola Sapienza
Kellogg School of Management
Northwestern University
2001 Sheridan Road, Evanston, IL 60208
Tel: 847/491-7436
Fax: 847/491-5719
E-Mail: paola-sapienza@northwestern.edu

Luigi Zingales
Booth School of Business
The University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-3196
Fax: 773/834-2081
E-Mail: luigi.zingales@ChicagoBooth.edu
AB  - 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 differences in priors across regions are reflected in the spirit of the novels that originate from those regions.
ER  -