How Can the Decline in Social Capital be Reconciled with a Satisfactory Growth Performance?

Stefano Bartolini and Luigi Bonatti ()

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: We aim at reconciling Putnam’s claim that social capital has declined in the U.S. in the last decades with the satisfactory growth performance of the U.S. economy over the same period. This puzzle originates from the fact that most literature on social capital emphasizes its role in enhancing factor productivity (mainly by reducing transaction costs). We model the hypotheses that the expansion of market activities (increased “marketization”) weakens social capital formation, and that firms utilize more market services in response to the declining social capital. Within this framework, perpetual growth can be consistent with the progressive erosion of social capital.

Keywords: Endogenous growth; externalities; marketization; social assets (search for similar items in EconPapers)
JEL-codes: O13 O41 Q20 Z13 (search for similar items in EconPapers)
Date: 2006-04
New Economics Papers: this item is included in nep-dev and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:usi:wpaper:477

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