Trustworthiness and Social Capital in South Africa Analysis.pdfVIP

Trustworthiness and Social Capital in South Africa: Analysis of Actual Living Standards Data and Artefactual Field Experiments Michael R. Carter Marco Castillo University of California, Davis Georgia Institute of Technology September 2009 Abstract This paper measures trustworthiness using an experimental protocol designed to distinguish this social norm from purely altruistic preferences. Experimental participants were drawn from South African households sur- veyed by a longitudinal living standards survey. This procedure not only permits analysis of the impact of experimentally measured social norms on real world outcomes, it also provides a rich array of data that can be used to control for initial conditions and prior possibilities that might be spuriously correlated with norms. Interestingly, altruism has more robust e§ects on living standards than does trustworthiness. This Önding moti- vates a deeper reconsideration on how trusts works, especially in societies like South Africaís where the boundaries of trust are likely to be tightly circumscribed by a history of social exclusion and segregation. JEL Codes: C93, O12, Z13 We thank the MacArthur Foundation for Önancial support under a Collaborative Research Grant. Additional support was also provided by the Pew Memorial Trusts. We also thank two anonymous referees, Jeanine Anderson, Jim Andreoni, Abigail Barr, Chris Barrett, Larry Blume, Jean-Paul Chavas, Adolfo Figueroa, Glen Loury, Larry Samuelson, and seminar participants at the Bellagio Workshop on Social Dynamics and the Microeconomics of Poverty, the University of California-Berkeley,