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Do Welfare Programs Damage Interpersonal Trust? Experimental Evidence from Representative Samples for Four Latin American Cities

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  • Alberto Chong
  • Hugo Nopo
  • Vanessa Rios

Abstract

This paper argues that welfare programs are linked with the destruction of social capital, as measured by interpersonal trust in laboratory games. The paper employs experimental data for representative samples of individuals in four Latin American capital cities (Bogota, Lima, Montevideo, and San Jose), finding that participation in welfare programs damage trust. This result is robust to the inclusion of individual risk measures and a broad array of controls. The findings also support the notion that low take-up rates may be due to stigma linked with trust and social capital, rather than transaction costs.

Suggested Citation

  • Alberto Chong & Hugo Nopo & Vanessa Rios, 2009. "Do Welfare Programs Damage Interpersonal Trust? Experimental Evidence from Representative Samples for Four Latin American Cities," Research Department Publications 4609, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:4609
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    References listed on IDEAS

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    1. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    2. Janet Currie, 2004. "The Take Up of Social Benefits," NBER Working Papers 10488, National Bureau of Economic Research, Inc.
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    4. Remler, D.K. & Glied, S.A., 2003. "What other programs can teach us: Increasing participation in health insurance programs," American Journal of Public Health, American Public Health Association, vol. 93(1), pages 67-74.
    5. Burks, Stephen V. & Carpenter, Jeffrey P. & Verhoogen, Eric, 2003. "Playing both roles in the trust game," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 195-216, June.
    6. Rebecca M. Blank & Patricia Ruggles, 1993. "When Do Women Use AFDC & Food Stamps? The Dynamics of Eligibility vs. Participation," NBER Working Papers 4429, National Bureau of Economic Research, Inc.
    7. Arik Levinson and Sjamsu Rahardja, 2004. "Medicaid Stigma," Working Papers gueconwpa~04-04-06, Georgetown University, Department of Economics.
    8. Nava Ashraf & Colin F. Camerer & George Loewenstein, 2005. "Adam Smith, Behavioral Economist," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 131-145, Summer.
    9. Alberto Chong & Hugo Ñopo & Juan Camilo Cardenas, 2008. "To What Extent do Latin Americans Trust and Cooperate? Field Experiments on Social Exclusion In Six Latin American Countries," Research Department Publications 4577, Inter-American Development Bank, Research Department.
    10. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Martin Leites & Gustavo Pereira & Andres Rius & Gonzalo Salas & Andrea Vigorito, 2017. "PROTOCOL: The effect of cash transfers on social solidarity: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 13(1), pages 1-49.

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    More about this item

    Keywords

    Experiments; Surveys; Social Programs; Trust; Stigma; Latin America;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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