The past decade has witnessed a surge of interest in the economic analysis of networks. This chapter is concerned with the role played by labor and credit networks in shaping economic activity in developing countries. The problem of identifying network effects on economic outcomes is first...

Informal systems of relationships may be the most appropriate unit of analysis for understanding the patterns of development of many aspects of corruption, organized crime, markets, and the state. The lack of attention to informal systems can produce unanticipated and undesired outcomes in...

What do we know about the role of extended families and kinship networks for redistributing resources? What gaps in our knowledge most need to be filled? How can we best organize current work and identify priorities for future research? These questions are important for several reasons:...

Delegating the allocation of public resources to community members is an increasingly popular form of delivering development programs and are associated with a tradeoff between improved information about potential beneficiaries and favoritism towards local elites. Unlike targeting cash transfers...

Recent Eurobarometer survey data are used to document and explain the stock of social capital in 27 European countries. Social capital in Central and Eastern Europe - measured by civic participation and access to social networks - lags behind that in Western European countries. Using regression...

Limited borrower information may create targeting distortions in credit markets. Community-based lending programs may reduce these distortions by exploiting information transmitted in local networks, but connections may create asymmetries in power. This paper analyzes how local leaders balance...

This paper considers the formation of risk-sharing networks. Following empirical findings, we build a model where risk-sharing takes place between pairs of individuals. We ask what structures emerge when pairs can agree to form links, but people cannot coordinate links across a population. We...

We analyze the capacities of communities (or social networks) and courts to secure cooperation among heterogeneous, impersonal transactors. We find that communities and courts are complementary in that they tend to support cooperation for different types of transactions but that the existence of...

We analyze the capacities of communities (or social networks) and courts to secure cooperation among heterogeneous, impersonal transactors. We find that communities and courts are complementary in that they tend to support cooperation for different types of transactions but that the existence of...

We study stable matchings on exogenously given or endogenously formed bipartite graphs that reflect constraints on matching. The effects of a change of the exogenously given graph (constraints) are investigated. Specifically, we examine to what extent individuals gain or lose from relaxing...