Economic Growth and Social Poverty: The Evolution of Social Participation

We develop an evolutionary model of growth in which agents choose how to allocate their time between private and social activities. We argue that a shift from social to private activities may foster marketbased growth, but also generate social poverty. Within a formal framework that merges a game theoretic analysis of the evolution of social participation with a model of dynamic accumulation of its effects on social environment (i.e., of social capital accumulation), we show that growth and well-being may evolve in opposite directions (a plausible outcome for advanced and affluent societies). JEL-Classification: C73, D62, I31, J22, O41, Z13 Key-words: Time Allocation, Social Capital, Relational Goods ∗We would like to thank for helpful comments Benedetto Gui, Giacomo Corneo, Avner Shaked, Nicolas Bardsley, Burkhard Schipper, Guntram Wolff and the audience to seminars in Buenos Aires, Bologna, Bonn and Padova, where earlier versions of this paper have been presented. The usual disclaimer applies. †Department of Economics, University of Sassari, Italy ‡Department of Economics, University of Bologna, Italy §Department of Economics, University of Bonn, Germany