Through webs of cross-cutting ties, groups can build "social capital"—the information and informal collective punishment by which to mitigate collective action problems and enforce on each other norms of appropriate behavior. Yet not all minorities maintain such networks. And minority groups without these cross-cutting ties sometimes find themselves hijacked by opportunistic entrepreneurs who capture private benefits for themselves while generating statistical discrimination against the group as a whole. The problem becomes acute when migration from the minority to the majority group is possible (at a cost). Inevitably, the most talented members of the minority will find the migration easiest and most rewarding. Necessarily, the resulting selective out-migration will reduce the average ability of the minority members who remain and leave the group even more vulnerable to the opportunists. Consider the Korean residents of Japan. Koreans had begun to migrate to Japan in the 1910s. They were poor, single, male, young, uneducated, and did not intend to stay long. As one might expect given those demographics, they maintained low levels of social capital, and generated substantial (statistical) discrimination toward themselves. After the Second World War, most Koreans returned to their homeland. Among those who stayed, the low levels of social capital remained. Plagued by collective action problems, the group could not prevent the communists among them from taking control and manipulating the group toward their private ends. Lacking the dense networks that would let them constrain the opportunists, the resident Koreans could not stop them. Those with the most talent, sophistication, and education simply left the group and migrated into Japanese society.
Ramseyer, J. M. (2021). Social capital and the problem of opportunistic leadership: the example of Koreans in Japan. European Journal of Law and Economics, 52(1). https://doi.org/10.1007/s10657-020-09682-2
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