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Does Infrastructure Facilitate Social Capital Accumulation? Evidence from Natural and Artefactual Field Experiments in a Developing Country

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  • Aoyagi, Keitaro
  • Sawada, Yasuyuki
  • Shoji, Masahiro
Abstract
While social capital in general has been recognized as essential for economic activities, its accumulation mechanisms are largely unexplored. How does people’s trust toward others, one of the core dimensions of social capital, emerge? To shed new light on this largely unanswered question, we investigate the impact of physical infrastructure on social capital accumulation by comparing two hypotheses: the habit formation hypothesis and the repeated interaction hypothesis. We use a unique dataset from an irrigation project in Sri Lanka under a natural experimental situation where a significant portion of irrigated land was allocated through a lottery mechanism. Also, we look at the level of social capital using artefactual field experiments by a strategy method based on a within-subject design. By combining these two instruments, we find that physical distance embedded by irrigation systems explain variations in trust across irrigation communities, suggesting that the level of particularized trust is significantly higher than that of general trust. Also, within-community variation in particularized trust is driven largely by each individual’s years of access to irrigation and is not necessarily affected by social distance or repeated interaction among farmers. Our results indicate that social preference emerges from a technological environment set by physical access to irrigation, suggesting habit formation of pro-social behavior.

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  • Aoyagi, Keitaro & Sawada, Yasuyuki & Shoji, Masahiro, 2014. "Does Infrastructure Facilitate Social Capital Accumulation? Evidence from Natural and Artefactual Field Experiments in a Developing Country," Working Papers 65, JICA Research Institute.
    • Handle: RePEc:jic:wpaper:65
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    References listed on IDEAS

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    Cited by:

    1. Aida, Takeshi, 2015. "Spatial vs. Social Network Effects in Risk Sharing," 2015 Conference, August 9-14, 2015, Milan, Italy 210937, International Association of Agricultural Economists.
    2. Masahiro Shoji, 2018. "Incentive for risk sharing and trust formation: experimental and survey evidence from Bangladesh," Oxford Economic Papers, Oxford University Press, vol. 70(4), pages 1062-1083.
    3. Takeshi Aida, 2019. "Social capital as an instrument for common pool resource management: a case study of irrigation management in Sri Lanka," Oxford Economic Papers, Oxford University Press, vol. 71(4), pages 952-978.
    4. Sawada Yasuyuki & Shoji Masahiro & Sugawara Shinya & Shinkai Naoko, 2014. "The Role of Infrastructure in Mitigating Poverty Dynamics: The Case of an Irrigation Project in Sri Lanka," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(3), pages 1117-1144, July.
    5. Yasuyuki Sawada & Ryuji Kasahara & Keitaro Aoyagi & Masahiro Shoji & Mika Ueyama, 2013. "Modes of Collective Action in Village Economies: Evidence from Natural and Artefactual Field Experiments in a Developing Country," Asian Development Review, MIT Press, vol. 30(1), pages 31-51, March.
    6. Senaratna Sellamuttu, Sonali, 2013. "How access to irrigation influences poverty and livelihoods: a case study from Sri Lanka. Impact assessment of infrastructure projects on poverty reduction," IWMI Working Papers H045795, International Water Management Institute.
    7. Sonali Senaratna Sellamuttu & Takeshi Aida & Ryuji Kasahara & Yasuyuki Sawada & Deeptha Wijerathna, 2014. "How Access to Irrigation Influences Poverty and Livelihoods: A Case Study from Sri Lanka," Journal of Development Studies, Taylor & Francis Journals, vol. 50(5), pages 748-768, May.
    8. Sawada, Yasuyuki, 2015. "The Impacts of Infrastructure in Development: A Selective Survey," ADBI Working Papers 511, Asian Development Bank Institute.
    9. Aida, Takeshi & Sawada, Yasuyuki, 2016. "Altruism or Exchange? Experimental Evidence on the Motives behind Private Transfers in Sri Lanka," Working Papers 132, JICA Research Institute.
    10. Tsusaka, Takuji W. & Kajisa, Kei & Pede, Valerien O. & Aoyagi, Keitaro, 2015. "Neighborhood effects and social behavior: The case of irrigated and rainfed farmers in Bohol, the Philippines," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 227-246.
    11. Nie, Zihan & Yang, Xiaojun & Tu, Qin, 2020. "Resource scarcity and cooperation: Evidence from a gravity irrigation system in China," World Development, Elsevier, vol. 135(C).

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    Keywords

    ural and artefactual field experiments ; trust ; social capital ; irrigation;
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