Social capital: implications for development theory, research, and policy
Summary (3 min read)
The Communitarian View
- The communitarian perspective equates social capital with such local organizations as clubs, associations, and civic groups.
- Communitarians, who look at the number and density of these groups in a given community, hold that social capital is inhcrendy good, that more is better, and that its presence always has a positive effect on a community's welfare.
- Where communities or networks are isolated, parochial, or working at cross-purposes to society's collective interests (in ghettos, gangs, drug cartels, and so on), productive social capital is replaced by what Rubio (1997) -in discussing Colombia-calls perverse social capital, which gready hinders development.
- But the extensive literature on caste inequality, ethnic exclusion, and gender discrimination-the bleak outcomes often produced and maintained by community pressuressuggests otherwise (Narayan and Shah 1999) .
- In Kenya a participatory poverty assessment recorded more than 200,000 community groups active in rural areas, but most were unconnected to outside resources and were unable to improve the lot of the poor (Narayan and Nyamwaya 1996) .
The Networks View
- A second perspective on social capital, which attempts to account for both its upside and its downside, stresses the importance of vertical as well as horizontal associations between people and of relations within and among such organizational entities as community groups and firms.
- It can provide a range of valuable services for community members, ranging from baby-sitting and house-minding to job referrals and emergency cash.
- Portes and Sensenbrenner (1993) cite the case of prosperous Asian immigrants who anglicized their names in order to divest themselves of communal obligations to subsequent cohorts.
- Second, the sources of social capital need to be distinguished from the consequences derived from them.
- (Without this distinction, for example, it could be argued that successful groups are distinguished by their dense community ties, failing to consider the possibility that the same ties could be preventing success in another otherwise similar group.).
Outcasts
- Poor villagers Recent rural-to-urban Successful members of migrants microfinance programs immediate neighbors and friends (their bonding social capital) for credit, insurance, and support, require access to more extensive product and factor markets as their businesses expand.
- Similarly, long-term members of group-based credit programs may find that obligations and commitments to their colleagues present obstacles to further advancement, especially for the more ambitious (Woolcock 1999) .
- In these circumstances, many poor people partially divest themselves of their immediate community ties (D) and find a potentially more diverse network where "bridging" social capital is more abundant and economic opportunities more promising (E).
- The networks view has been employed with great effect in recent development research.
- Far from dismissing the vitality of traditional village groups in poor communities (the modernization view) or romanticizing it (the communitarian view), the networks view in effect recognizes that these groups can both help and hinder economic advancement.
The Institutional View
- A third perspective of social capital, which the authors call the institutional view, argues that the vitality of community networks and civil society is largely the product of the political, legal, and institutional environment.
- It also stresses that the performance of states and firms themselves depends on their own internal coherence, credibility, and competence and on their external accountability to civil society.
- Research from the institutional view has two variants, both of which have yielded remarkably complementary results.
- This approach, pioneered by Knack and Keefer (1995, 1997) , equates social capital with the quality of a society's political, legal, and economic institutions.
- Rampant corruption, frustrating bureaucratic delays, suppressed civil liberties, vast inequality, divisive ethnic tensions, and failure to safeguard property rights (to the extent that they exist at all) are major impediments to prosperity.
The Synergy View
- In recognition of this disconnect, a number of scholars have recendy proposed what might be called a synergy view, which attempts to integrate the compelling work emerging from the networks and institutional camps.
- They are not always won by the most powerful, nor do challenges to authority always entail violent conflict.
- Patient efforts by intermediaries to establish partnerships between associations of the poor and outsiders can reap significant dividends (Isham, Narayan, and Pritchett 1995) .
Measuring Social Capital
- Several recent innovative studies have attempted to quantify social capital and its contribution to economic development.
- One measure is membership in informal and formal associations and networks.
- The National Commission on Philanthropy and Civic Renewal (1998), for example, has developed a National Index of Civic Engagement based on a sample of 1,000 respondents.
- In exploring the roots and determinants of Hindu and Muslim riots in India, Varshney (2000) focuses on the role of intercommunal networks.
- Because the forms of social capital are society-specific and change over time, the instruments must focus on a range of dimensions of social capital (Narayan and Cassidy 1999) .
Implications for Development Theory and Policy
- The concept of social capital offers a way to bridge sociological and economic perspectives and to provide potentially richer and better explanations of economic development.
- Understanding how proposed policy interventions will affect the power and political interests of the stakeholders is a vital consideration, since all policy interventions occur in a social context characterized by a delicate mix of informal organizations, networks, and institutions.
- Second, it is critical to invest in the organizational capacity of the poor and to help build bridges between communities and social groups.
- One of the great virtues of the idea and discourse on social capital is that it provides a common language for these different stakeholders, enabling them to communicate more easily with one another.
- Fifth, development interventions should be viewed through a social capital lens, and assessments of their impact should include the potential effects of the intervention on the social capital of poor communities.
Conclusion
- In unpacking the literature on social capital and development, a recurring message is that social relations provide opportunities for mobilizing other growth-enhancing resources, that social capital does not exist in a political vacuum, and that the nature and extent of the interactions between communities and institutions hold the key to understanding the prospects for development in a given society.
- This consideration suggests that one of the most important examples of social capital at work in the absence of formal insurance mechanisms and financial instruments is the use by the poor of social connections to protect themselves against risk and vulnerability.
- In many respects the research on social capital is still in its early stages, but practitioners and policymakers cannot wait for researchers to know all there is to know before acting.
- Instead, all those involved should adopt a stance of learning by doing.
- It is only through collaborative efforts-with all that this entails regarding struggle, perseverance, negotiation, and mutual willingness to learnthat genuine progress will be made.
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