Building social capital: Conditional cash transfers and cooperation

Many conditional cash transfer (CCT) programs have important social components and, therefore, can have an effect on social capital. In 2007, we conducted a field experiment with 1451 subjects in Cartagena, Colombia. We interpret the behavior in the game as a measure of what in the literature has been called social capital. We played the game in two similar and adjacent neighborhoods. The ‘treatment’ neighborhood, Pozón, had been targeted for over 2 years by a CCT program, Familias en Acción; the ‘control’ neighborhood, Ciénaga, had not. In 2008, with the program being implemented in both neighborhoods, we played the same public goods game, and were therefore able to implement a difference in differences strategy to estimate the impact of the CCT on our measure of social capital. In 2007, the level of cooperation we observed in the treatment neighborhood was considerably higher than that in the control one. Although similar in many dimensions, the two groups turned out to be significantly different in some observable variables; the positive result was robust to controls for these differences. In 2008, we found that the level of cooperation was statistically identical across the two neighborhoods, and similar to the levels observed in 2007 in the treatment one. We conclude that the CCT program did improve cooperation. In analyzing the effect of the CCT on cooperation we also look at other (individual and group) determinants of individual behavior in the game, and we compare our measure based on behavior in the game to more traditional measures of social capital used in the literature that we collected in a context-specific survey.