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Bartolini, S., Bonatti, L. (2008). Endogenous growth, decline in social capital and expansion of market activities. Journal of Economic Behavior and Organization 67 (3-4), 917-926

We model in an endogenous growth set-up the hypotheses that the expansion of market activities weakens social capital formation and that firms can invest in formal mechanisms of control and enforcement to substitute for social capital (trust, work ethics, honesty). The model shows that the economy tends to grow faster when it is relatively poorer in social capital and that perpetual growth can be consistent with the progressive erosion of social capital. These results may help to reconcile Putnam's claim that social capital has declined in the U.S. with the satisfactory growth performance of the U.S. over the same period.

Authors

Bartolini, Stefano

We live in rich countries and that has allowed us to resolve many problems. We have freed ourselves of mass poverty, we have access to consumer goods, to education, health care, we live longer and better etc. Regardless of this many of us seem to live in a state of uneasiness and malaise. Our...

Bonatti, Luigi

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