Exchange networks, markets and trust

Network-based transactions are attractive as a system for economic exchange because they give network members greater protection against opportunism and exchange hazards compared to more anonymous market transactions. At the same time, net- works restrict the possibilities to exploit economies of scale and other efficiency enhancing properties of markets. When the problem-solving capacity of networks do not make up for the losses generated by not trading with outsiders, trust is important to promote transactions among strangers in the anonymously market. This paper offers an economic analysis of this idea. With the help of a social evolutionary model, it is also demonstrated that mutual trust relations can survive in the anonymous market, even when there is a clear danger of opportunism, and the conventional mechanisms like repetitions and contracts are ruled out

Does an activity based remuneration system attract young doctors to general practice?

<p>Abstract</p> <p>Background</p> <p>The use of increasingly complex payment schemes in primary care may represent a barrier to recruiting general practitioners (GP). The existing Norwegian remuneration system is fully activity based - 2/3 fee-for-service and 1/3 capitation. Given that the system has been designed and revised in close collaborations with the medical association, it is likely to correspond - at least to some degree - with the preferences of <it>current </it>GPs (men in majority). The objective of this paper was to study which preferences that young doctors (women in majority), who are the <it>potential entrants </it>to general practice have for activity based vs. salary based payment systems.</p> <p>Methods</p> <p>In November-December 2010 all last year medical students and all interns in Norway (n = 1.562) were invited to participate in an online survey. The respondents were asked their opinion on systems of remuneration for GPs; inclination to work as a GP; risk attitude; income preferences; work pace tolerance. The data was analysed using one-way ANOVA and multinomial logistic regression analysis.</p> <p>Results</p> <p>A total of 831 (53%) responded. Nearly half the sample (47%) did not consider the remuneration system to be important for their inclination to work as GP; 36% considered the current system to make general practice <it>more </it>attractive, while 17% considered it to make general practice <it>less </it>attractive. Those who are attracted by the existing system were men and those who think high income is important, while those who are deterred by the system are risk averse and less happy with a high work pace. On the question of preferred remuneration system, half the sample preferred a mix of salary and activity based remuneration (the median respondent would prefer a 50/50 mix). Only 20% preferred a fully activity based system like the existing one. A salary system was preferred by women, and those less concerned with high income, while a fully activity based system was preferred by men, and those happy with a high work pace.</p> <p>Conclusions</p> <p>Given a concern about low recruitment to general practice in Norway, and the fact that an increasing share of medical students is women, we were interested in the extent to which the current Norwegian remuneration system correspond with the preferences of potential GPs. This study suggests that an existing remuneration mechanism has a selection effect on who would like to become a GP. Those most attracted are income motivated men. Those deterred are risk averse, and less happy with a high work pace. More research is needed on the extent to which experienced GPs differ along the questions we asked potential GPs, as well as studying the relative importance of other attributes than payment schemes.</p

Life satisfaction and confidence in national institutions: evidence from South America

A number of South American countries experienced turbulent democratic, political and economic upheaval over the last 40 years in the form of coup d’états in the 1970s, tumultuous elections, and repeated severe economic crises, some of which happened fairly recently. Starting in 2010, a number of court proceedings across the region have made past military coup d’états the focus of national conversations. South American citizens may, therefore, have lost confidence in national institutions that have repeatedly disappointed their trust and expectations; a situation with potentially detrimental effects on their well-being. Using eight waves of the Gallup World Poll collected between 2009 and 2016 across ten South American countries, we investigate to what extent people’s confidence in financial institutions, the honesty of elections, the military, the judicial system, the national government and the police is associated with people’s current and expectation of future life satisfaction. We find that people who report confidence in these six institutions rate their current and expected life satisfaction, on average, to be higher than those who lack these types of institutional confidence, even after controlling for demographic factors and macroeconomic indicators. In addition, we investigate changes over time for all six measures of confidence in institutions as well as for current and expectation of future life satisfaction. Our results suggest that governments’ investments in well-functioning institutions may contribute positively to subjective well-being in a society. However, our analysis is correlational and we thus cannot rule out reverse causality

How Friendship Network Characteristics Influence Subjective Well-Being

This article explores how friendship network characteristics influence subjective well-being (SWB). Using data from the 2003 General Social Survey of Canada, three components of the friendship network are differentiated: number of friends, frequency of contact, and heterogeneity of friends. We argue that these characteristics shape SWB through the benefits they bring. Benefits considered are more social trust, less stress, better health, and more social support. Results confirm that higher frequency of contacts and higher number of friends, as well as lower heterogeneity of the friendship network are related to more social trust, less stress, and a better health. Frequency of contact and number of friends, as well as more heterogeneity of the friendship network increase the chance of receiving help from friends. With the exception of receiving help from friends, these benefits are in turn related to higher levels of SWB. Only the frequency of meeting friends face-to-face has a remaining positive direct influence on SWB

Perceived corruption and individuals’ life satisfaction: The mediating role of Institutional Trust Marco

Corruption degrades the quality of institutions, increases economic inequality and limits growth. Recent studies indicate that corruption is also associated with lower satisfaction with life. This research examines a potential explanation for this association and investigates the role of institutional trust in mediating the linkage between perceived corruption and satisfaction with life. Specifically, in two studies, we tested the novel hypothesises that perceived corruption affects life satisfaction indirectly by undermining individuals’ confidence in institutions. Study 1 (N = 251) involved an opportunity sample from the US. Study 2 (N = 9508) analysed data from the World Value Survey and involved a larger, representative sample of individuals from the MENA region. Across studies, mediation analyses provided evidence for the hypothesized indirect effect of perceived corruption on life satisfaction through institutional trust. Implications of the findings, limitations of the studies and directions for future research are discussed

Greasing the wheels? The impact of regulations and corruption on firm entry

This paper investigates the question of whether corruption might ‘grease the wheels’ of an economy. We investigate whether and to what extent the impact of regulations on entrepreneurship is dependent on corruption. We first test whether regulations robustly deter firm entry into markets. Our results show that the existence of a larger number of procedures required to start a business, as well as larger minimum capital requirements are detrimental to entrepreneurship. Second, we test whether corruption reduces the negative impact of regulations on entrepreneurship in highly regulated economies. Our empirical analysis, covering a maximum of 43 countries over the 2003–2005 period, shows that corruption facilitates firm entry in highly regulated economies. For example, the ‘greasing’ effect of corruption kicks in at around 50 days required to start a new business. Our results thus provide support for the ‘grease the wheels’ hypothesis

Social Capital, Network Governance and Social Innovation: Towards a New Paradigm?

Limited knowledge and empirical evidence exist so far on how governance is related to social capital, and to comprehensively evaluate the effects of collaborative public-private partnerships in rural development actions, and whether these elements foster socially innovative actions. The book chapter begins to address these knowledge gaps. It highlights the conceptual framework linking social capital and network governance and identifies specific approaches to analysing governance. Moreover, it conceptually identifies the key elements for assessing governance mechanisms in the LEADER approach and explains its adoption in the evaluation method proposed in the book. The chapter concludes by outlining how social capital and governance may support social innovation, a topic which is developed more comprehensively in relation to LEADER's specific contribution in the final chapter of the same book