Groups and information disclosure: Evidence on the Olson and Putnam Hypotheses in Japan

Yamamura, Eiji (2011): Groups and information disclosure: Evidence on the Olson and Putnam Hypotheses in Japan.

Abstract

There is controversy between Putnam and Olson concerning the role of group. Putnam argued that small group makes a contribution to economic growth whereas Olson asserted that small group hampers the economic growth through rent-seeking behavior. Since the end of the 1990s in Japan, there has been a remarkable rise in the rate of enactment of public information-disclosure ordinances by local governments. This paper uses the panel data of Japan to compare the effects of Putnam-type horizontally structured groups and Olson-type vertically structured groups on government information disclosures. The Arellano-Bond type dynamic panel model is employed to control for unobserved fixed effects and endogeneity bias. The major findings are as follows: (1) the Putnam-type group has a positive influence on information disclosure; (2) the Olson-type group has a detrimental effect on information disclosure. These support not only Putnam hypothesis but also Olson Hypothesis. The characteristics of groups should be considered carefully when the influence of group is examined.

• Item Type: MPRA Paper
• Language: English
• Keywords: Putnam, Olson, interest group, social capital, information-disclosure ordinance.
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G38 - Government Policy and Regulation; P - Economic Systems > P4 - Other Economic Systems > P48 - Political Economy ; Legal Institutions ; Property Rights ; Natural Resources ; Energy ; Environment ; Regional Studies; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification

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