Economic Growth and Social Capital

Recent interdisciplinary theoretical work has suggested that social capital, or the interpersonal trust of citizens, plays an important role in explaining both the efficiency of political institutions, and in the economic performance of contemporary societies. This paper examines the relationship between social capital and economic growth in a sample of thirty-four countries over the period 1970 to 1992, within the framework of a modified neo-classical model of economic growth. The findings suggest that social capital has an impact on growth which is at least as strong as that of human capital or education, which has been the focus of much of the recent work on endogenous growth theory. It appears to have about the same impact on growth as catch-up or the ability of poorer nations to adopt technological innovations pioneered by their richer counterparts.

[1]  Jonathan D. Day,et al.  The New Economics of Organization , 1998 .

[2]  R. Lucas.  On the Mechanics of Economic Development , 1988 .

[3]  Jess Benhabib,et al.  The role of human capital in economic development Evidence from aggregate cross-country data , 1994 .

[4]  D. Weil,et al.  A Contribution to the Empirics of Economic Growth Author ( s ) : , 2008 .

[5]  Ronald Inglehart,et al.  The effect of cultural values on economic development: Theory, hypotheses, and some empirical tests , 1996 .

[6]  N. Luhmann,et al.  Trust: Making and Breaking Cooperative Relations , 1990 .

[7]  Wolfgang Streeck,et al.  Governing Capitalist Economies , 1996 .

[8]  C. Macrae.  ‘Trust — the social virtues and the creation of prosperity’ , 2000 .

[9]  A. Maddison.  GROWTH AND SLOWDOWN IN ADVANCED CAPITALIST ECONOMIES - TECHNIQUES OF QUANTITATIVE ASSESSMENT , 1987 .

[10]  Kenneth Newton,et al.  Social capital and democracy in modern Europe , 1999 .

[11]  T. Breurch,et al.  A simple test for heteroscedasticity and random coefficient variation (econometrica vol 47 , 1979 .

[12]  Howard Pack.  Endogenous Growth Theory: Intellectual Appeal and Empirical Shortcomings , 1994 .

[13]  J. Coleman,et al.  Social Capital in the Creation of Human Capital , 1988, American Journal of Sociology.

[14]  T. C. Edens,et al.  Economic Growth , 1957, The Journal of Economic History.

[15]  R. D'Agostino,et al.  A Suggestion for Using Powerful and Informative Tests of Normality , 1990 .

[16]  L. Hamilton.  Statistics with Stata , 1990 .

[17]  G. Grossman,et al.  Innovation and growth in the global economy , 1993 .

[18]  E. Ostrom,et al.  Rules, Games, and Common-Pool Resources , 1994 .

[19]  Duane H. Swank.  Culture, Institutions, and Economic Growth: Theory, Recent Evidence, and the Role of Communitarian Polities , 1996 .

[20]  R. Summers,et al.  The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1987 , 1991 .

[21]  Margaret Levi,et al.  Social and Unsocial Capital: A Review Essay of Robert Putnam's Making Democracy Work , 1996 .

[22]  M. Kremer.  Population Growth and Technological Change: One Million B.C. to 1990 , 1993 .

[23]  H. Barger.  The General Theory of Employment, Interest and Money , 1936, Nature.

[24]  K. Arrow.  Gifts and Exchanges , 1982 .

[25]  R. Inglehart,et al.  Cultural values, stable democracy, and economic development: A reply , 1996 .

[26]  R. Jackman,et al.  A Renaissance of Political Culture , 1996 .

[27]  Sidney Tarrow,et al.  Making Social Science Work Across Space and Time: A Critical Reflection on Robert Putnam's Making Democracy Work , 1996, American Political Science Review.

[28]  R. Solow.  A Contribution to the Theory of Economic Growth , 1956 .

[29]  Mark S. Granovetter.  The Strength of Weak Ties , 1973, American Journal of Sociology.

[30]  T. Swan,et al.  ECONOMIC GROWTH and CAPITAL ACCUMULATION , 1956 .

[31]  R. Levine,et al.  A Sensitivity Analysis of Cross-Country Growth Regressions , 1991 .

[32]  E. Goldberg,et al.  Thinking about how Democracy Works , 1996 .

[33]  N. Luhmann.  Familiarity, Confidence, Trust: Problems and Alternatives , 2000 .

[34]  Edward E. Leamer,et al.  Let's Take the Con Out of Econometrics , 1983 .

[35]  Stephen F. Knack,et al.  Does Social Capital Have an Economic Payoff? A Cross-Country Investigation , 1997 .

[36]  P. Romer.  Increasing Returns and Long-Run Growth , 1986, Journal of Political Economy.

[37]  B R Hasselkus,et al.  Habits of the heart. , 2000, The American journal of occupational therapy : official publication of the American Occupational Therapy Association.

[38]  D. Freedman,et al.  Some Notes on the Bootstrap in Regression Problems , 1984 .

[39]  Alexander Hicks,et al.  The comparative political economy of the welfare state , 1995 .

[40]  Amitai Etzioni.  The Spirit Of Community , 1994 .

[41]  R. Inglehart,et al.  Value Change in Global Perspective. , 1996 .

[42]  Roger C. Kormendi,et al.  Macroeconomic determinants of growth: Cross-country evidence , 1985 .

[43]  W. Galston.  Trust: The Social Virtues and the Creation of Prosperity , 1996 .

[44]  R. Inglehart.  Culture Shift in Advanced Industrial Society , 1991 .

[45]  Rati Ram.  Government Size and Economic Growth: A New Framework and Some Evidence from Cross-Section and Time-Series Data: Reply , 1989 .

[46]  R. Putnam.  Tuning In, Tuning Out: The Strange Disappearance of Social Capital in America , 1995, PS: Political Science & Politics.

[47]  R. Putnam,et al.  Making Democracy Work: Civic Traditions in Modern Italy. , 1994 .

[48]  A. Maddison,et al.  Dynamic forces in capitalist development , 1991 .

[49]  R. Coase,et al.  The Firm, the Market, and the Law , 1990 .