Coping and Social Capital: The Informal Sector and the Democratic Transition
34 Pages Posted: 24 Oct 2005
Date Written: September 2004
Transition countries are short on both trust in people and trust in government. Scarcity and corruption meant that ordinary citizens had to use informal connections to accomplish everyday tasks. Ordinary people also regularly had to make extra "gift" payments to doctors and government officials. These "connections" were potentially a source of "anti-social capital". Using a 2003 survey of Romanians, I find that using connections and making gift payments do not lead to less trust in others, or less satisfaction with the market or democracy or to perceptions of increasing inequality. Grand corruption, not petty corruption, is the source of low trust and faith in the market and democracy.
Keywords: trust, social capital, informal sector, transition
JEL Classification: Z13, D63, E26, P26
Suggested Citation: Suggested Citation