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52 Eur. J.L. & Econ. 1 (2021)

handle is hein.journals/eurjlwec52 and id is 1 raw text is: European Journal of Law and Economics (2021) 52:1-32 https:Ildoi.org/l 0.1007/s10657-020-09682-2 Social capital and the problem of opportunistic leadership: the example of Koreans in Japan J. Mark Ramseyer' Accepted: 30 December 2020 / Published online: 18 February 2021 © The Author(s), under exclusive licence to Springer Science+Business Media, LLC part of Springer Nature 2021 Abstract Through webs of cross-cutting ties, groups can build social capital-the informa- tion and informal collective punishment by which to mitigate collective action prob- lems and enforce on each other norms of appropriate behavior. Yet not all minorities maintain such networks. And minority groups without these cross-cutting ties some- times 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 result- ing 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 tak- ing 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. Keywords Discrimination - Collective action - Social capital - Economic history JEL Classification J12 - J15 - K38 - K42 - N35 E J. Mark Ramseyer ramseyer@law.harvard.edu Harvard Law School, Cambridge, USA I_) Springer

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