An experimental analysis of the relationship between social capital and public goods

The presence of market failures hinders pareto-efficient allocation, reducing social well-being. At this point, the intervention of the public sector is foreseen by some researchers. In the relevant framework, one of the main market failures that the public sector should play an active role in is public goods. However, in the historical process, examples indicate that the public sector is insufficient in the face of increasing demand for public goods. Within the framework of the cited problem, the number of scientists focusing on voluntary participation in the provision of public goods is increasing day by day. In this context, increasing voluntary participation in public goods is suggested as an alternative way to increase social welfare. For this reason, studies on factors that will increase voluntary participation in public goods are frequently carried out today. Trust, one of the basic components of social capital theory, which developed rapidly in the 1980s, interacts with collective action. The main purpose of this study is to analyze the relationships between cooperative behavior impaired by the free-riding problem and trust in an experimental setting. The experiment is comprised of a trust game followed by a public good game within the relevant framework. The outcomes indicate that trust reinforces public good participation, and public good participation reinforces trust. In the light of the data, no unidirectional causality relationship between trust and collaborative tendency was found.