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Measuring social capital: Culture as an explanation of Italy's economic dualism

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  • GALASSI, FRANCESCO L.

Abstract

This article presents a quantitative test of the oft-repeated view that Italy's backward and poor South suffered from low ‘social capital’, a tendency to defect from co-operative engagements. The problem with such assertions is that they run the risk of taking as evidence in favour of the hypothesis the very observations that need to be explained. The analysis carried out in this work tries to break out of this impasse by analysing the conditions under which it was ex ante welfare-improving for farmers in early twentieth century Italy to join an unlimited liability rural co-operative bank which would give them access to cheaper credit, but also exposed them to the risk of their neighbours’ defection. These ‘co-ops’ are a prime testing ground for the cultural explanation in that they spread rapidly throughout Northern Italy in the late nineteenth century, but never gained a similar popularity in the South. I estimate the switching function for these co-ops in different parts of the country to test whether Northern and Southern farmers faced significantly different choice sets when making the decision to join. Identical choice sets but differential responses would of course favour the cultural explanation of the South's backwardness. The results suggest that for the same parameter values, the choice sets for North and South were indeed different.

Suggested Citation

  • Galassi, Francesco L., 2001. "Measuring social capital: Culture as an explanation of Italy's economic dualism," European Review of Economic History, Cambridge University Press, vol. 5(1), pages 29-59, April.
  • Handle: RePEc:cup:ereveh:v:5:y:2001:i:01:p:29-59_00
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    Cited by:

    1. Chloupkova, Jarka, 2002. "European Cooperative Movement - Background and Common Denominators," Unit of Economics Working Papers 24204, Royal Veterinary and Agricultural University, Food and Resource Economic Institute.
    2. Cainelli, Giulio & Mancinelli, Susanna & Mazzanti, Massimiliano, 2007. "Social capital and innovation dynamics in district-based local systems," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(6), pages 932-948, December.
    3. Chul-Joo Lee & Daniel Kim, 2013. "A Comparative Analysis of the Validity of US State- and County-Level Social Capital Measures and Their Associations with Population Health," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 111(1), pages 307-326, March.
    4. Giovanni Ferri & Marco Pini, 2019. "Environmental vs. Social Responsibility in the Firm. Evidence from Italy," Sustainability, MDPI, vol. 11(16), pages 1-20, August.
    5. Galassi, Francesco L., 2002. "From Drought to Flood: Environmental Constraints and the Political Economy of Civic Virtue," Economic Research Papers 269456, University of Warwick - Department of Economics.
    6. Simona D'Amico & Anna Irene De Luca & Giovanni Gulisano, 2013. "Circuiti di produzione e consumo "alternativi" per l?organizzazione del sistema agro-alimentare calabrese: un quadro introduttivo," Economia agro-alimentare, FrancoAngeli Editore, vol. 15(2), pages 73-96.
    7. Galassi, Francesco L., 2002. "From Drought To Flood : Environmental Constraints And The Political Economy Of Civic Virtue," The Warwick Economics Research Paper Series (TWERPS) 643, University of Warwick, Department of Economics.
    8. Christopher L. Colvin & Eoin McLaughlin, 2014. "Raiffeisenism abroad: why did German cooperative banking fail in Ireland but prosper in the Netherlands?," Economic History Review, Economic History Society, vol. 67(2), pages 492-516, May.
    9. Christopher L. Colvin & Stuart Henderson & John D. Turner, 2018. "The Origins of the (Cooperative) Species: Raiffeisen Banking in the Netherlands, 1898–1909," Working Papers 0126, European Historical Economics Society (EHES).
    10. Mariella, Vitantonio, 2022. "The agrarian origins of social capital," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 543-568.

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