Abstract: Do social interactions with neighbors have an impact on participation in cooperative organizations? Using data from a representative sample of beneficiaries from a community-driven development program in Nicaragua, I exploit exposure to a random variation in the number of neighbors assigned to treatment from a field experiment to measure the impact of interactions.
I alsointroduceabinarychoicemodelwithsocialinteractions.The model predicts that ones’ participation can be complementary or substitute fromtheirneighbors.My results are congruent with strategic substitution. One more neighbor assigned to treatment within a 500-meter
distance reduces participation in productive and community organizations by 2.34 and 0.8 percentage points, respectively. These results do not seem to be driven by anticipatory effects in the control group. Moreover, these impacts are larger for those who borrow their neighbors’ inputs and have stronger ties with them.