سرمایه اجتماعی به عنوان یک جایگزین برای تشریفات : مدارک و شواهد از بولیوی

The paper studies the role of social capital in the urban informal sector in Bolivia. It shows that a formal firm has about 6.4 times the sales of an informal firm with no social capital, but informal firms use their social capital to compensate for the lack of formal productivity benefits. By being formal, firms obtain permanent visibility because they can operate a shop or a visible production location and they can produce in locations with better public infrastructure. Informal firms, in contrast, sell in one place – typically in street markets in front of formal shops – and produce in another – typically in the outskirts. Social capital increases accessibility of informal firms and provides them with security benefits at their production location.

The paper studies the role of social capital in the urban informal sector in Bolivia. It shows that a formal firm has about 6.4 times the sales of an informal firm with no social capital, but informal firms use their social capital to compensate for the lack of formal productivity benefits. By being formal, firms obtain permanent visibility because they can operate a shop or a visible production location and they can produce in locations with better public infrastructure. Informal firms, in contrast, sell in one place – typically in street markets in front of formal shops – and produce in another — typically in the outskirts. Social capital increases accessibility of informal firms and provides them with security benefits at their production location.

The paper shows that formal status and social capital for small garment producers in Bolivia are substitutes. Both of the following findings support this claim: First, a comparison of the descriptive statistics of formal and informal firms shows that the two types of firms make very similar input and output choices. This finding suggests that if being formal generates productivity benefits, then informal firms are somehow able to compensate for a lack of these by using informal substitutes. Second, by analyzing the sales for informal and formal firms by controlling for formal status and for social capital for informal firms stark differences between the two types of firms appear. A formal firm has about 6.4 times the sales of an informal firm with no social capital. And an informal firm with about 26 social links has about the same sales as the average formal firm. The paper derives a theoretical model that models the firm's decision to formalize: The model shows that even though OLS estimates may be biased without properly controlling for unobservables, such a bias needs a channel through which it can manifest itself. The finding of a large positive interaction-term between informal status and social capital supports the hypothesis that social capital and formal status are substitutes. There may be several theories that can explain this finding. A plausible theory is that social capital makes informal firms more accessible, and it may also provide firms located in the outskirts with security benefits — firms that are most likely informal. Formal firms, in contrast, obtain accessibility and security benefits by being formal: They operate a shop located in areas with better public infrastructure. Among other reasons, accessibility is important because it serves as a commitment device for contract compliance and quality assurance. A policy conclusion from these insights is that if the government wants to increase the tax base by increasing the proportion of firms that choose to be formal, then increasing the security and the infrastructure where those firms are located may be critical. Under these circumstances, firms may choose to become visible at their production location which will improve accessibility of these firms.