Reciprocity in Political Networks: Hometown Ties and Intercity Investment in China
Social networks are an important lubricant in an economy when market imperfections exist. They provide information (Greif, 1993), promote trust (Karlan et al., 2009), help enforce contracts, and reduce moral hazards (Rauch and Trindade, 2002). However, social networks may also enable agents to collusively divert resources from their best use, which undermines the interests of… Read More »
