Stephen Knowles Personal
Homepage
Contact Details
Office CO725
Tel 64 3 479 8350
Fax 64 3 479 8174
Email sknowles@business.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 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
Measuring social capital
This joint work with Alvin Etang and David Fielding measures the
extent 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 survey trust (for some
survey questions). There is also a positive correlation between
trust and membership of Rotating Savings and Credit Associations
(ROSCAs). For more on this project see our paper "Survey
Trust, Experimental Trust and ROSCA Membership in Rural Cameroon"
David Fielding, Jenny Byrant-Tokalau and myself have been awarded
a research grant to conduct some experiments to measure social capital
in the South Pacific. The field work will be conducted in early
2009.
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.
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 "Does
social capital affect 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 "Measuring
aid effectively in tests of 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: sknowles@business.otago.ac.nz
Last
updated
29-Jul-2008
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Research
overview