Loading presentation...

Present Remotely

Send the link below via email or IM


Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.


Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

Civic Capital(ism)

TEDx Athens - October 10th 2011

Elias Papaioannou

on 25 October 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of Civic Capital(ism)

Greece in the eyes of my colleagues
huge public debt
prolonged fiscal deficits (even in the "euphoria" years)
wage inflation (mostly in public sector)
steady loss of competitiveness (low exports, low productivity)
poor ranking in every "competitiveness" index , reflecting corruption, legal efficiency, barriers to entry, regulatory quality
large and inefficient state
populist policies (supply BUT also demand)

numerous barriers to entrepreneurial activity
lack of competition
-devastating recession
-unemployment (esp. for the youth)
-uncertainty for the future, dejection
-suffering (especially under-privileged)
Analytical Framework

An Economist's Standpoint
Growth - Development
Production Function
1) physical capital (machines, infrastructure, etc)
2) labor (hours)
3) human capital (education, experience, etc)
Total Factor Productivity
Missing Input/Capital??
1) Legal institutions (investor's protection; court efficiency)
2) Property rights Institutions (expropriation risk)
3) Regulation - Barriers to entry (reshuffling of economic activity)
4) Administrative efficiency (corruption)
(rules of the game)
Civic Capital
those persistent and shared beliefs and values that help a group overcome the free rider problem in the pursuit of socially valuable activities.
Institutions. => Need to Strengthen

Civic (Social) Capital => desperately needed
Physical Capital => There. Can come
Labor => Under-utilization
Human Capital => Abundant (home/abroad)
Greece from within
The politicians/state
The unions
The industrialists
The markets
The banks
The troika (IMF, EU, ECB)
The EU (governance; policies)
The Blame Game
Institutional failure (weak state)

Lack of civic/social capital (trust)

My View => Deeep Causes
Contractual Institutions
Civic Capital and Development
Correlation or Causality
- reverse causation (from development to strong institutional structures)

- omitted variables (history, geography, religion, other)
Civic Capital(ism)
(Dartmouth College and Harvard University)
Elias Papaioannou
Greece Nowadays
rough synonym: social capital
Social Capital

“features of social life - networks, norms, and trust - that enable participants to act together more effectively to pursue shared objectives".
- Attitudes towards cooperation: number of cooperatives across locales
- Measures of social behavior: participation is voluntary associations
- Attitudes towards free riding and cheating: compliance with taxes, littering,

- Trust (our peers, foreigners)
- Blood donation
Data Patterns
Summary Findings - Main Channels

- Cheaper and easier access to finance
- Higher stock market participation (risk sharing/diversification)

- International trade (especially in complex, high value added goods)
- Large and decenralized (and better managed) firms

- Fewer barriers to entreprenurial activity
- Lower degree of inefficient regulation & absence of corruption
Contractual Institutions and Developmment
a digression
back to the inputs
A closer look at the channels
Institutional capacity and civic virtue
Institutions, History and Civicness
- higher trust in cities with some form of checks and balances on the executive before the Enlightment
- higher civic capital among city-states in Italy (association with trade and commerce)
- Origins of Industrial Revolution: Ethos of hard-work, civicness and entrepreneurial activity has been most prevalent in regions/cities with some constraints on the executive, a large middle-class (bourgeoisie), and commerce based economic actvity
my favorite relevant finding (from Italy)
in regions/cities with high civic capital
=> punishment of "corrupt" politicans
=> high turnaround of "lazy" policy makers

What drives civic virtue?
Teaching Practices (not education) and Trust
- Education, religion, family ties, etc.

- Teaching practices at school
- Teaching practices at home

- Big events (crisis, wars, natural catastrophes)

What drives civic virtue?

endogeneity (inter-linkages)
proximate correlates vs. deep causes
Variation Explained: 30%-50%
Variation Explained (Residual): 50%-70%
Thank you!
Elias Papaioannou

collection of good behavior that tend to be simultaneously present in certain communities/countries whose inhabitants vote, obey the law, and cooperate with each other and whose leaders are honest and committed to the public good. (Putnam, 1993 and 1995)
Civic-Social Capital
"Virtually every commercial transaction has within itself an element of trust, certainly any
transaction conducted over a period of time.
It can be plausibly argued that much of the economic backwardness in the world
can be explained by the lack of mutual confidence."
Trust and Economic Activity
Kenneth Arrow
Crisis and Civic Capital
- evidence that trust is build during catastrophes (such as external wars) and important big events.

- paradigms in Greece: 1922-1923; 1940-1941; 2004.

=> Olympic Games

Total Factor Productivity
OECD countries sample
How Much Do We Trust Others?
How Much Others Trust Us?
From Trust to Development?
OECD countries sample
Crisis and Civic Capital, cont.
- recession babies (less confident)
- disbelief in markets (focus on luck)
- preferences for redistribution
Social Capital and Finance
Evidence from Italy
Social capital: Blood donation and electoral participation

Finance: IPOs, stock market participation, fraction of wealth in cash, rejection of loan application
Strong correlation between social capital and finance
Full transcript