The friends we make : networks, culture and institutions

• Main Author: Raj, Prateek
• Published: University College London (University of London) 2018
• Subjects: 658
• Online Access: https://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.756136

Who are our friends and what is the nature of networks we make, can have macro-level implications on society. There are relationship-based economies, and there are economies that rely on arm’s length interactions. This thesis studies how relationship-based groups like merchant guilds and caste can persist due to a lack of incentives and information, or because of salience of social identities. It also explores the factors that can widen the social circle and give rise to impersonal and cosmopolitan social systems. In the second chapter, I develop a theoretical model to show how difficult it is for relationship-based economies to be honest to and trusting of strangers and to transition into impersonal economies. I find a narrow set of conditions under which generalized trust in strangers can emerge and sustain in an impersonal economy. In the third chapter, I explore the transition of guild-based economies of Northwestern Europe into market-based economies in the sixteenth century. I study the unique interaction of economic and technological factors that drove such a change. I find that cities in the sixteenth century, where monopolies of merchant guilds declined, were at the Atlantic coast and had significantly higher levels of printing in the fifteenth century. In the fourth chapter, with Paola Sapienza and Luigi Zingales, I examine the effect of caste censuses of 1901 in making the caste identity salient today. We study its impact on networking and governance and find that in regions where district committees were formed to rank network in 1901, households have a smaller social circle as they have fewer out-of-caste networks with professionals. They also have a poorer quality of government. Overall, the thesis develops a detailed picture of how social structures historically evolve, and how trust, access to information and social identity are the forces that shape them.