Community size and network closure

Community size is often found to be negatively correlated with prosocial behaviors such as formal volunteering, working on public projects and informal help to friends and strangers (Putnam 2000, p. 119, 206). This may be because people who reside in large communities simply spend less time socializing with each other. As a result, people living in large cities have on average fewer friends, and hence their social networks support less cooperation.1 A complementary channel, which has received less attention in the literature, is that community size may affect outcomes by changing other aspects of the network structure. Specifically, even holding fixed the number of friends, we expect social networks in small communities to exhibit greater network closure, i.e., be more interconnected. The intuition is straightforward: in small communities, the pool of potential friends is limited, which increases the extent to which the network neighborhoods of two friends are likely to overlap. Coleman (1990) suggested that variation in network closure can directly affect outcomes. In particular, he argued that networks with higher closure generate high trust between friends, which facilitates cooperation and thus improves welfare. The logic is that networks with high closure allow for greater social sanctions between individuals through commo