Economics, Literature and Scepticism

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I am a PhD student in Economics. I am originally from South Africa and plan to return there after my PhD. I completed my M. Comm in Economics and my MA In Creative Writing (Poetry) at the University of Cape Town, where I worked as a lecturer before starting my PhD.

Tuesday, April 13, 2010

The Parochial and the Cosmopolitan - Globalization helps cooperation

Posted by Simon Halliday | Tuesday, April 13, 2010 | Category: , , , | 5 comments Continuing my trend of reporting on papers about cooperation, I thought I'd comment on a recent paper by Nancy Buchan and co-authors about human cooperation and globalization. I've argued previously about the role of parochialism in punishment and in theories about the evolution of war and cooperation, today, though, the theme is the extent to which more cosmopolitan countries tend to foster individuals who are more willing to cooperate globally. Sounds intuitive, but how does it work experimentally?

Consider a prisoner's dilemma in the form of a multi-layer public goods game (PGG). A basic PGG works as follows: each player is given some money to contribute to a communal pot, that amount is multiplied by some factor (rate of return), but everyone gets a share of the total minus what they initially contributed. Therefore, I do my 'best' if everyone cooperates fully and contributes all their money, while I free ride and contribute nothing. It's a prisoner's dilemma in action - everyone sees this and they shouldn't cooperate. Consider a similar game, but with two communal pots: one 'local' where only people from my area can contribute to, the amount of which is then doubled and of which I receive 1/4 (3 other people in my group can contribute to it), and one 'global' or 'world' account that I and others can contribute to, the total amount of which is tripled, and of which I receive 1/12 (11 other people can contribute to it) . The tension is the following: the direct return is 0.5 from the local account and 0.25 from the world account. But if everyone contributes a maximal amount to the world account, then we all make off with the most money rather than if we had all defected and not made any contributions. This is also a prisoner's dilemma, but with more layers of complexity.

Buchan et al ran this experiment in 6 countries: the US, Italy, Russia, Argentina, South Africa and Iran, looking specifically at large cities in each of the countries. They made two hypotheses. First, globalization could lead to greater parochialism by emphasizing ethnic, local or national groupings. Conversely, globalization could have a palliative effect on parochialism and perhaps enable and sustain greater tolerance. They indexed a country level globalization index (CGI), an index produced by the University of Warwick. They also constructed an individual level globalization index (IGI) based on questions that each subject answered. The authors used quota sampling methods for gender, age and socioeconomic status (though not for rural-urban, which I comment on later).

Now we come to the reason I'm interested in the research. When the authors ran the experiments, they showed that South Africans ranked 5th out of the 6 countries in the CGI: above Iran, but below Argentina. Considering the experimental results, South Africa also ranked 4th or 5th below Italy, Russia and the United States, but almost exactly equal to Argentina in terms of probability of allocating resources to a global account. Iran came in lowest . Globalization at the individual and country seemed a good predictor of international cooperation. If you're sceptical of the globalization result, the authors also point out that:

"analysis of the CGI along with a host of macroindicators such as the rule of law, generalized trust, per capita income, and norms of civic cooperation shows that the CGI is the only macrovariable that is significantly correlated with mean cooperation rates at the world level." (4140)
So, it seems as though the second hypothesis is supported by the authors results: globalization may make people less parochial and more cosmopolitan. But one problem emerges, as the authors chose to do the experiments in large cities, it is possible that they have a biased sample. There may be an underlying correlation between a person's choice to live in a big city and a person's cosmopolitanness - more cosmopolitan people may choose to live in big cities, less cosmopolitan people may choose to live outside of cities. Consequently, in the paper we may be observing an upper bound on a nation's tendency to cooperativeness because the subjects are drawn from inherently more cosmopolitan (and maybe more internationally cooperative) people. I'd like to see this research replicated with rural and urban samples to see what the differences might be. I'd suspect that rural individuals would be more likely to cooperate locally, whereas urban individuals would be more likely to cooperate globally. Thus, globalization might predict urban 'world' cooperation, but not rural as there might be differences across countries over rural behaviour. Apart from potential rural-urban differences that might exist among countries, I could not fault the experiment's design. Moreover, the fascinating research exemplified by this paper tends to make me slightly more optimistic about multilateralism and the benefits of globalization in the 21st century, though that could just be confirmation bias.

Buchan, N., Grimalda, G., Wilson, R., Brewer, M., Fatas, E., & Foddy, M. (2009). Globalization and human cooperation Proceedings of the National Academy of Sciences, 106 (11), 4138-4142 DOI: 10.1073/pnas.0809522106