Social capital, social norms and the New Institutional Economics

Philip Keefer and Stephen Knack

MPRA Paper from University Library of Munich, Germany

Abstract: Douglass North (1990) describes institutions as the rules of the game that set limits on human behavior, now a universally-accepted definition. North and others especially underline the crucial role of informal social norms. They predict that, like all rules of the game, social norms should affect the economic prosperity enjoyed by individuals and countries – that they should have a crucial impact, for example, on economic and political development. In fact, substantial evidence demonstrates that social norms prescribing cooperative or trustworthy behavior have a significant impact on whether societies can overcome obstacles to contracting and collective action that would otherwise hinder their development. Much of this evidence comes from outside the new institutional economics, emerging instead from scholarly research in the field of “social capital.” A review of this evidence, and its implications for our understanding of the role of social norms and institutions, is therefore the focus of this chapter.

Keywords: social capital; norms; institutions; institutional economics (search for similar items in EconPapers)
JEL-codes: O43 P48 (search for similar items in EconPapers)
Date: 2003, Revised 2004
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Citations: View citations in EconPapers (1)

Published in Handbook of New Institutional Economics chapter 27 (2005): pp. 700-725

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Related works:
Chapter: Social Capital, Social Norms and the New Institutional Economics (2008)
Chapter: Social Capital, Social Norms and the New Institutional Economics (2005)
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