Social Capital and Economic Growth Revisited

Reino Hjerppe ()

No 307, Discussion Papers from VATT Institute for Economic Research

Abstract: Social capital facilitates cooperation in the society. High level of social capital promotes economic efficiency by lowering transaction costs. Trust towards strangers and low level of corruption are examples of high level of social capital. The concept of social capital is already an old one, but interest in studying its role and effects has increased notably during the past ten years or so. Review of the literature concerning the connection of economic growth and social capital shows that many studies have found strong positive correlation between the two. This does not, however, establish a causal relationship between them. In addition, defining and measuring social capital unequivocally has proven difficult. The concept has both a structural (whether people participate in group activities) and a cognitive dimension (norms, attitudes). The paper also deals with problems of formation of social capital and the possibilities to tackle the measurement problems.

Keywords: Social capital, economic growth, trust, social norms, cooperation, Economic growth, Taloudellinen kasvu, Taxation and Social Transfers, Julkisen talouden rahoitus ja tulonsiirrot, A130 - Relation of Economics to Social Values, O100 - Economic Development: General, Z130 - Cultural Economics: Social Norms and Social Capital; Social Networks Economic Anthropology, (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (6)

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