Social capital, rules, and institutions: A cross-country investigation

Thomas Farole, Andrés Rodríguez-Pose and Michael Storper

No 2007-12, Working Papers from Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales

Abstract: Research on the institutional foundations of economic development emphasizes either rulebound systems of exchange or informal bonds between individuals and within small groups. This corresponds to a classical division in social science, between the forces of society and those of community. This cleavage largely ignores their interactions, which are likely to shape the institutions that underpin economic development in decisive ways. This paper operationalises and tests how the interaction of the forces of community (or social capital) and society (or rules) impact three types of institutions: those involved in problem solving, those that shape microeconomic efficiency and those that influence social policy, across fiftyeight countries. We find that both community and society are important determinants across all institutional domains, and are in many cases mutually reinforcing, but that different specific aspects of community and society are most relevant to different institutional domains. Instrumental associationalism, whether formal or informal, and a robust rules environment are the most important determinants of positive institutional outcomes.

Date: 2007-04-27
New Economics Papers: this item is included in nep-dev, nep-hrm, nep-pol and nep-soc
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Published in Scienze Regionali (Italian Journal of Regional Science) 10(2), July 2011: 31-70

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Related works:
Working Paper: Social capital, rules, and institutions: A cross-country investigation (2007)
Working Paper: Social capital, rules, and institutions: A cross-country investigation (2007)
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