Endogenous growth, decline in social capital and expansion of market activities

Stefano Bartolini and Luigi Bonatti

MPRA Paper from University Library of Munich, Germany

Abstract: We model in an endogenous growth set-up the hypotheses that the expansion of market activities weakens social capital formation, and that firms can invest in formal mechanisms of control and enforcement to substitute for social capital (trust, work ethics, honesty). The model shows that the economy tends to grow faster when it is relatively poorer in social capital and that perpetual growth can be consistent with the progressive erosion of social capital. These results may help reconciling Putnam’s claim that social capital has declined in the U.S. with the satisfactory growth performance of the U.S. economy over the same period.

Keywords: Generalized trust; externalities; marketization; social assets (search for similar items in EconPapers)
JEL-codes: O13 O41 Q20 Z13 (search for similar items in EconPapers)
Date: 2007-05
New Economics Papers: this item is included in nep-bec and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (60)

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Related works:
Journal Article: Endogenous growth, decline in social capital and expansion of market activities (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:3341

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