Social Capital and Large-Scale Agricultural Investments: An Experimental Investigation

Menusch Khadjavi, Kacana Sipangule, Rainer Thiele

2020

Following the 2007–8 global food crisis, agricultural producers have invested in large tracts of land in developing countries. We investigate how the arrival of large-scale farms changes inter-personal trust and reciprocity, important components of social capital, in traditional villages. We elicit trust and reciprocal behaviour in villages that lie near large-scale farms and compare them with villages at a distance. Our data reveal greater trust in villages close to large-scale farms. Reciprocity is more frequent after farm employment. These results are likely driven by communal coping and reputation building. A natural field measure shows that trust correlates with public good sharing.

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Kiel Institute for the World Economy