What Do Lost Wallets Tell Us about Survey Measures of Social Capital?

We validate survey measures of social capital with a new data set that examines whether citizens report a lost wallet to its owner. Using data from more than 17,000 lost wallets across 40 countries, we find that survey measures of social capital - especially questions concerning generalized trust or generalized morality - are strongly and significantly correlated with country-level differences in wallet reporting rates. A second finding is that lost wallet reporting rates predict unique variation in economic development and government effectiveness not captured by existing measures, suggesting this data set also holds promise as a useful indicator of social capital.