Social Economics and Social Capital

Abstract

This paper evaluates key developments in the social capital literature over the past decade. It then examines empirical work on the purported the link between social capital and economic performance. Although these results indicate that good governance and social cohesion make a measurable contribution to economic development, the offer little guidance for policy formulation. Early contributors to the social capital field were pessimistic about the ability of the state to stimulate social capital formation. More recently, there has been a groundswell of interest in the application of community development principles to foster social capital at the micro level. This paper incorporates a critical evaluation of the mainstream social capital literature from a social economics perspective. The various strands within the social economics tradition share a common concern with the "disembedding" of social context from mainstream economics.