Sharing Poverty Breeds Solidarity
Sharing a dramatic life experience in a community can foster the development of a strong sense of social cohesion. This mechanism seems to have affected the South African black population, victims of apartheid. Economic and sociological literature provides ambiguous empirical evidence on the effect of residential segregation on the sense of cohesion of a community: while it is possible that the concentration of urban poverty exacerbates social discomfort, on the other hand such contexts favor the development of feelings of solidarity and belonging that would hardly grow in less homogeneous places.
For economists, who always study incentives as tools to nudge individuals and groups towards socially desirable outcomes, a very interesting research question concerns the incentive mechanisms that can promote cooperation and trust among the members of a community. One tool that is particularly effective is the use of participatory monetary incentives, which award financial prizes to groups on the condition of a minimum financial engagement on the part of individual members. In this sense, these incentives mirror tools used in development programs by various NGOs, where the implementation of a project with outside help is subject to a minimum monetary contribution by the beneficiaries (Community-Led Development programs).
The financial commitment, though limited, of each member of the community is not only a form of insurance for those who finance the project in the event that it fails, but mainly signals the willingness of community members to actively engage in supporting the project, by helping build a sense of trust within the community. To explore the relationships between these phenomena, in 2015 we conducted a lab-in-the-field experiment in Philippi, Langa and Khayelitsha, townships in the Cape Town area that are populated almost exclusively by blacks. The experiment was attended by ten groups (a total of 269 people), which differed in size, frequency of interactions, year of establishment and social mission, ranging from mamas engaged in the fight against HIV to supporters of a football team, and young volunteer actors in a theater staging plays for sick children.
Results of the study (funded by UNU-WIDER) indicate that inhabitants of the townships involved in the experiment contribute to the common good to a significant extent: despite the low standard of living (60% live in wooden shacks with corrugated iron roofs and 56% are unemployed), in the presence of incentives, on average participants gave to the group 60% of the money received, revealing a high degree of trust in the generosity of others. More generally, individuals belonging to groups that pursue altruistic aims were more generous and responsive to participatory incentives.