Stephen Knowles Personal
Homepage
Contact Details
Office CO707
Tel 64 3 479 8350
Fax 64 3 479 8171
Email stephen.knowles@otago.ac.nz
Research Overview
Much of my research in recent years has
been on the economic effects of social capital. Following Putnam
et al (1993) I interpret social capital as "features of social
organization, such as trust, norms, and networks that can improve
the efficiency of society". I see social capital as a similar
concept to what North (1990) defined as informal institutions. I
have recently started using economic experiments to test various
hypotheses relating to social capital. I have also done work on
empirically modelling the determinants of economic growth across
countries (including the effects of foreign aid, education, health,
inequality and government intervention) and on quantifying the costs
to small businesses of complying with government regulations in
a New Zealand context. More details on specific projects are given
below.
Social Capital Research
Experiments on charitable giving
This joint work with Alvin Etang and David Fielding uses Dictator
Games to analyse factors that affect charitable giving. In our paper
"Giving to Africa and perceptions
of poverty" we analyse whether participants give more to
World Vision to spend in Africa if they are given the impression
the country is poor for reasons beyond its control compared to if
they are told the country is poor due to choices its citizens have
made. In our paper "What
sort of people vote expressively" we identify the personal
characteristics associated with the differences between an individual's
giving to charity and his/her vote in a referendum on charitable
giving.
Measuring social capital in Cameroon
This joint work with Alvin Etang and David Fielding measures the
level of trust in a village in rural Cameroon, using both an economic
experiment (the Trust Game) and surveys. We find that the level
of trust is high in the village and that there is a positive correlation
between the level of experimental trust and membership of Rotating
Savings and Credit Associations (ROSCAs). For more on this project
see our paper "Trust and ROSCA
Membership in Rural Cameroon".
In a second paper, based on additional field work, we examine the
extent to which people in rural Cameroon are more trusting of those
from their own village, than they are of people from a neighbouring
village, using data from the Trust Game. We also have participants
take part in a Triple Dictator Game and a Risk Game to test whether
Trust Game donations may, in part, be motivated by altruism or risk
aversion. We find that participants are more trusting of those from
their own village, but this social distance effect is not large.
We also find that a positive correlation between Trust Game and
Triple Dictator Game donations. For more on this project see our
paper "Does trust extend beyond
the village? Experimental trust and social distance in Cameroon".
In another paper we analyse whether people's behaviour in the Trust
Game experiments is correlated with their responses to survey questions
about trust. For more information see our paper "Are
survey measures of trust correlated with experimental trust? Empirical
evidence from Cameroon."
Informal institutions and cross-country
health differences
This joint work with Dorian Owen analyses the extent to which informal
institutions, which we view as a similar concept to social capital,
are correlated with differences in health outcomes across countries.
This work is carried out within the deep determinants of development
framework. Our empirical results suggest that formal and informal
institutions are substitutes. Improving informal institutions has
positive effects on life expectancy that are statistically significant
for most countries and stronger than the effects of improving formal
institutions. The gains from improving informal institutions are
greatest for countries in which institutions are weakest. Geographical
factors also help explain cross-country variation in life expectancy.
For more on this project see our paper "Which
institutions are good for your health? The deep determinants of
comparative cross-country health status".
Social capital and environmental
performance
This joint work with Hari Bansha Dulal and Roberto Foa (both from
the World Bank), makes use of a new data set measuring different
dimensions of social institutions, a concept we argue is closely
linked to social capital, to analyse the relationship between social
institutions and the environment across countries. There is evidence
that some aspects of social institutions are associated with better
environmental performance. This research builds on a previous paper
with Quentin Grafton (ANU) which analysed the effect of social capital
on environmental performance for a much smaller number of countries
using World Values Survey data. For more on this project, see our
paper "Social Capital and Cross-country
environmental performance".
Is social capital part of the institutions
continuum, and can it be modelled as a deep determinant of development?
This work argues that social capital is a similar concept
to what North (1990) defined as informal institutions, and that
social capital can be modelled as a deep determinant of economic
development, in the same way that formal institutions have been
modelled. These arguments are outlined in the paper "The
future of social capital in development economics research".
Social capital
and foreign aid allocations
This paper explores the issue of whether countries with
higher levels of social capital (as proxied by trust, civic mindedness
and associational activity) tend to give more aid, as a share of
GNP, than do countries with lower levels of social capital. The
empirical results suggest that there is a positive correlation between
trust and aid allocations. For more information see my paper "Social
Capital, Egalitarianism and Foreign Aid Allocations".
Social divergence and economic performance
This work is being carried
out jointly with Quentin Grafton and Dorian Owen and is funded by
the Marsden Fund (administered by the Royal Society of New Zealand).
In our paper "Total factor productivity,
per capita income and social divergence" we define social
divergence as the social barriers to communication and exchange
between individuals and groups of individuals within a society.
The hypothesis is that social divergence reduces the degree of interaction
between individuals that stimulates innovation and leads to the
diffusion of productivity-enhancing ideas. We show that various
measures of social divergence are correlated with the level of total
factor productivity and per capita income across countries.
Other Research Projects
Foreign aid and economic growth
In the extensive empirical literature on aid effectiveness, aid
is always measured as a share of GDP. However, measuring aid in
real dollars per capita is also consistent with standard growth
theory. In this joint work with David Fielding we show that, as
the theory would suggest, the choice of denominator makes an enormous
difference to the sign and significance of coefficients on aid variables
in regressions such as those in Burnside and Dollar (2000). For
more on this project see our paper "Dangerous
Interactions: Problems in Interpreting tests of Conditional Aid
Effectiveness".
Quantifying Compliance Costs of Small
Businesses in New Zealand
This joint work with Robert Alexander and John Bell estimates
the compliance costs, both in terms of time and money, faced by
small businesses in New Zealand. We asked a small number of Dunedin
businesses to keep a diary for three months in which they recorded
the amount of time and money spent on compliance issues. On average,
firms spent about one hour a week on compliance, as well as paying
about $110 a week to people outside the firm (eg accountants) to
deal with compliance issues (such as income tax) for them. For more
on this project see our paper "Quantifying
Compliance Costs of Small Businesses in New Zealand".
^ Top of page
Government intervention and economic
growth
In joint work with Arlene
Garces-Ozanne we argue that government spending is a poor proxy
for government intervention more generally. For more information
see our paper "Government intervention
and economic performance in East Asia".
In a separate paper "Are
the Penn World Tables data on government consumption and investment
being misused?" I argue that it is inappropriate to measure
G/Y using the Penn World Tables data, compiled by Summers and Heston.
This is because the Penn World Tables impose a set of international
relative prices on the data, which are inappropriate for assessing
the size of the government sector. For more on this paper, click
here.
Income inequality and economic growth
There is a large empirical
literature examining the effect of income inequality and economic
growth. However, the inequality data used in this work are not consistently
measured. In the paper "Inequality
and economic growth: the empirical relationship reconsidered in
the light of comparable data" I discuss why this is the
case and show that previous empirical results are not robust if
consistently measured data are used.
Educational gender gaps and economic
development
This work analyses whether
the large disparities between female and male education observed
in many developing countries act as a brake on economic development.
This work has been done jointly with Dorian Owen and Paula Lorgelly
and was financed by the Marsden Fund (which is administered by the
Royal Society of New Zealand). Our empirical work indicates that
these educational gender gaps significantly reduce income per worker.
For more information on this project click
here.
The effect of health on economic
performance
Earlier work, carried out
jointly with Dorian Owen, has examined the effect of health capital
(as proxied by life expectancy) on income per worker and economic
growth. Our empirical results suggest that life expectancy is more
robustly correlated with economic performance than is educational
human capital. For more information see our papers "Education
and health in an effective-labour empirical growth model"
and "Health capital
and cross-country variation in income per capita in the Mankiw-Romer-Weil
model".
Miscellaneous
I have also done some work
in other areas of development economics, such as basic needs and
human development and analysing the correlation between life expectancy
and other socioeconomic variables.
For anyone interested in economic growth,
an excellent site to check out is Economic
Growth Resources maintained by Jon
Temple. If you want to know more about social capital, check
out the World
Bank's social capital site.
This page is maintained by Stephen
Knowles
email: stephen.knowles@otago.ac.nz
Last
updated
11-Aug-2011
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Research
overview