Globalization and social networks

Globalization is a universal phenomenon that not only makes domestic economies restructure, but also may impact other areas of local societies. This paper studies the effect of globalization on human relations, in particular on the formation of social networks, both bonding and bridging: I postulate that globalization induces labor market and workplace dynamics that would be destructive. Data come from the European and World Values Survey (1981-2008) on about 320’000 people’s values and attitudes, in this study spanning up to 22 years in about 80 countries, which have been matched with an index of economic globalization. In this pseudo micro panel I find robust evidence for a diminishing effect of globalization for bridging social networks with friends, but an enforcing one for bonding social networks among relatives. These results do not appear to be driven by a change in individuals’ preferences with respect to consuming and forming social ties. My findings are consistent with theories that claim growing physical distance and stronger reliance on family resources to lower the level of bridging social networks in society

Do Institutions of Direct Democracy Tame the Leviathan? Swiss Evidence on the Structure of Expenditure for Public Education

The deleterious impact of institutions of direct legislation on student performance found in studies for both the U.S. and Switzerland has raised the question of what its transmission channels are. For the U.S., an increase in the ratio of administrative to instructional spending and larger class sizes were observed, supporting the hypothesis of a Leviathan-like school administration. For Switzerland, using a cross-sectional time-series panel of sub-federal school expenditure and size of classes, no such effect is detected. This finding is in line with previous analyses in which efficiency gains in the provision of public goods for Switzerland have been found.direct democracy, median voter, bureaucracy, public education

The choice of domestic policies in a globalized economy

This paper describes the socio-economic adjustment effects exerted by globalization (taking as starting points competitive pressure, sectoral shifts, and financial market contagion) and discusses their relevance for domestic policy-making. I argue that these economic pressures and changes constrain government’s policy choice set to an extent that actual government policies are quite freed from any political ideological context. Important government tasks in a globalized economy include remedying information asymmetries and regulating markets as well as provision of essential goods.globalization; international trade; domestic policy; deregulation; competition; financial markets

DOES ENVY DESTROY SOCIAL FUNDAMENTALS? THE IMPACT OF RELATIVE INCOME POSITION ON SOCIAL CAPITAL

Research evidence on the impact of relative income position on individual attitudes and behaviour is sorely lacking. Therefore, this paper assesses such positional impact on social capital by applying 14 different measurements to International Social Survey Programme data from 25 countries. We find support for a positional concern effect or 'envy' whose magnitude in several cases is quite substantial. The results indicate that such an effect is non-linear. In addition, we find an indication that absolute income level is also relevant. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.Relative income position, envy, positional concerns, social capital, social norms, happiness

Social capital and relative income concerns: evidence from 26 countries

Research evidence on the impact of relative income position on individuals’ attitudes and behaviour is sorely lacking. Therefore, using the International Social Survey Programme 1998 data from 26 countries this paper investigates the impact of relative income on 14 measurements of social capital. We find support for a considerable deleterious positional concern effect of persons below the reference income. This effect is more sizeable by far than the beneficial impact of a relative income advantage. Most of the results indicate that such an effect is non-linear. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.Relative income, positional concerns, social capital, social norms, happiness

Do Positional Concerns Destroy Social Capital: Evidence from 26 Countries

Research on the effects of positional concerns on individuals’ attitudes and behavior is sorely lacking. To address this deficiency, we use the International Social Survey Programme 1998 data on 25’000 individuals from 26 countries to investigate the impact of relative income position on three facets of social capital, covering horizontal and vertical trust as well as norm compliance. Testing relative deprivation theory, we identify a deleterious positional income effect for persons below the reference income, particularly for their social trust and confidence in secular institutions. Also often a social capital-lowering effect of relative income advantage occurs, while a rise in absolute income almost always contributes positively. These results indicate that a rise in income inequality in society too large is rather detrimental to the formation of social capital.Relative income; positional concerns; social capital; social norms; deprivation theory

The Effect of Relative Income Position on Social Capital

This paper examines the influence of relative income position on individuals' attitudes by analyzing ISSP 1998 microdata from 25 countries along four different dimensions. Our results provide evidence for a sizeable relative income effect while also suggesting that absolute income level may be relevant. Changing the income reference group from regional to national does not significantly alter the results.Envy

Government Decentralization as a Disincentive for Transnational Terror? An Empirical Analysis

Using panel data for a maximum of 109 countries over the years 1976-2000, we empirically analyze the impact of decentralization on the occurrence of transnational terror. Our results show that expenditure decentralization reduces the number of transnational terror events in a country, while political decentralization has no impact. These results are robust to the choice of control variables and method of estimation.terrorism, decentralization, federalism, governance quality, government effectiveness

Does Envy Destroy Social Fundamentals? The Impact of Relative Income Position on Social Capital

Research evidence on the impact of relative income position on individual attitudes and behaviour is sorely lacking. Therefore, this paper assesses such positional impact on social capital by applying 14 different measurements to International Social Survey Programme data from 25 countries. We find support for a positional concern effect or ‘envy’ whose magnitude in several cases is quite substantial. The results indicate that such an effect is non-linear. In addition, we find an indication that absolute income level is also relevant. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.Relative income position, envy, positional concerns, social capital, social norms, happiness

Does a Generous Welfare State Crowd out Student Achievement? Panel Data Evidence from International Student Tests

Student achievement has been identified as important contributor to economic growth. This paper investigates the relationship between redistributive government activities and investment in human capital measured by student performance in international comparative tests in Mathematics and Science during the period 1980 to 2003. In fixed effects panel models, government consumption, government social expenditures, and the progressivity of the income tax system have negative effects on student achievement. We report results from a variety of model specifications and social expenditure components, and our best estimate indicates that increased government size by 10 percent reduces student achievement by 0.1 standard deviations.student achievement, welfare state, government size, tax system, panel data, international tests