Social Capital Jan Pieter Smits Statistics NetherlandsUniversity of

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Social Capital Jan Pieter Smits Statistics Netherlands/University of Groningen (Groningen Growth and Development Centre)

Social Capital Jan Pieter Smits Statistics Netherlands/University of Groningen (Groningen Growth and Development Centre)

Structure of Presentation -What is social capital? -Welfare effects of social capital -Is it

Structure of Presentation -What is social capital? -Welfare effects of social capital -Is it capital? -How to operationalise social capital

1. What is social capital? Granovetter’s complaint: ‘the undersocialised conception of man’ -Social capital

1. What is social capital? Granovetter’s complaint: ‘the undersocialised conception of man’ -Social capital as a micro or macro phenomenon: Bourdieu defines social capital as an individual asset. Stresses the reason why people invest in networking. Putnam, however, points at the more collective characteristics of network creation. -Networks versus trust: Sociologists emphasise network creation. Political sciences (Putnam) and economics (Fukuyama) point at trust that is accumulated within these networks. Woolcock (2001) sees trust as a result of investments in social capital. -Social capital as an indicator of networks between individuals or is a more general approach needed: Social capital to be seen in terms of social networks? Or broader approach, including ties between citizens and the state. Evans (developmental vs predatory states); Acemoglu et al: functioning of political markets.

2. Welfare effects of social capital Social Capital is important (see World Bank; Knack

2. Welfare effects of social capital Social Capital is important (see World Bank; Knack and Keefer), but how and why does it matter? (see Durlauf and Fafchamps) Three channels: 1) Direct welfare effects 2) Capital complementarities 3) Declining transaction costs

3. Is it capital? -Ownership; -Spill-over effects and capital complementarities; -Stocks and flows; -Investments

3. Is it capital? -Ownership; -Spill-over effects and capital complementarities; -Stocks and flows; -Investments and rewards;

4. How to measure social capital? -Networks between (groups of) citizens: time-use, which groups

4. How to measure social capital? -Networks between (groups of) citizens: time-use, which groups to we want to distinguish (see ABS)? Importance of ‘family capital’(Australia, New Zealand), ‘bridging social capital’ -> ethnic groups, age groups -The level of trust between citizens: generalised trust between (groups of) citizens. Trust in government. But also…… shared norms…. . . -The importance of including measures of inequality: Berger Schmitt: Social Capital + Inequality = Social Cohesion -The development of knowledge infrastructure: attempt to quantify elements from ‘National Systems of Innovation’literature; Community Innovation Surveys.