Social Capital: A Crucial Concept in Understanding Social Production

1.      Definition

The concept and theory of social capital dates back to the origins of social science; however, recent scholarship has focused on social capital as a subject of social organization and a potential source of value that can be harnessed and converted for strategic and gainful purposes. According to Robert David Putnam, the central premise of social capital is that social networks have value. Social capital refers to the collective value of all "social networks" and the inclinations that arise from these networks to do things for each other. Social capital refers to the institutions, relationships, and norms that shape the quality and quantity of a society's social interactions. Increasing evidence shows that social cohesion is critical for societies to prosper economically and for development to be sustainable. Social capital is not just the sum of the institutions that underpin a society; it is the glue that holds them together

However, social capital may not always be beneficial. Horizontal networks of individual citizens and groups that enhance community productivity and cohesion are said to be positive social capital assets whereas self-serving exclusive gangs and hierarchical patronage systems that operate at cross purposes to communitarian interests can be thought of as negative social capital burdens on society.

2.      History of the research on the concept

Robert David Putnam, if not the first one to write on the issue, is considered as the major author on the concept of social capital. He is a U.S. political scientist and professor at Harvard University, and is well-known for his writings on civic engagement and civil society along with social capital.

However, his work is concentrated on the United States only. His most famous (and controversial) work, Bowling Alone, argues that the United States has undergone an unprecedented collapse in civic, social, associational, and political life (social capital) since the 1960s, with serious negative consequences. Though he measured this decline in data of many varieties, his most striking point was that virtually every traditional civic, social, and fraternal organization had undergone a massive decline in membership.

From his research, a working group has formed at Harvard University and is called Saguaro Seminar. Most definitions around the social capital concept, notably those used by the World Bank, come from Putnam’s work and this research. 

3.      Measuring social capital

The Saguaro Seminar, in the continuation of Putnam’s work, has been elaborating various means to measure the level of social capital in different contexts. It says on its website that measurement of social capital is important for the three following reasons:

(a)   Measurement helps make the concept of social capital more tangible for people who find social capital difficult or abstract;

(b)   It increases our investment in social capital: in a performance-driven era, social capital will be relegated to second-tier status in the allocation of resources, unless organizations can show that their community-building efforts are showing results; and

(c)   Measurement helps funders and community organizations build more social capital. Everything that involves any human interaction can be asserted to create social capital, but the real question is does it build a significant amount of social capital, and if so, how much? Is a specific part of an organization’s effort worth continuing or should it be scrapped and revamped? Do mentoring programs, playgrounds, or sponsoring block parties lead more typically to greater social capital creation?

The working group has undertaken the following measurement activities:

1. Social Capital Community Benchmark Survey:

In 2000, we conducted the largest-ever survey on the civic engagement of U.S. Americans, in partnership with nearly three-dozen community foundations (and other funders). Nearly 30,000 respondents were surveyed in 40 communities across 29 states. For more information on this survey follow this link:

2. Social Capital Short-form Survey:

Based on the 2000 survey and other surveys in 2001/2002, the Saguaro Seminar has distilled down the 25–minute Social Capital Community Benchmark Survey into a Short Form that has 5–10 minutes of questions.

3. Social capital toolkit:

The Saguaro Seminar has developed a framework for how community leaders and others should think about efforts to build local social capital.

4. Program evaluation guide:

The Program Evaluation Guide is intended for nonprofit organizations, businesses, or other entities that want to examine the social capital impact of their work. It is less directive than the Social Capital Short Form Survey in suggesting the questions one should use and which respondents one should survey. See the website at: 

5. Social capital impact statement:

The working group has spent some time into trying to think about the social capital impact of various actions (prospectively):

4.      Related concepts

(a)   Civil society and social capital

Social capital within a nongovernmental organization (NGO)

Trust and willingness to cooperate allows people to form groups and associations, which facilitate the realization of shared goals.

Grameen Bank (Bangladesh) lends money to rural poor, especially women, at a daily loan volume of $1.5 million and has a 98% repayment rate. The organization was started in 1976 by Muhammad Yunus, who lent money to 42 persons, because he trusted they would repay it. Since then members have developed rules to maximize repayment of loans, but trust still plays a critical role in the organization’s success, particularly in the absence of collateral (Uphoff, Esman and Krishna, 1997).

Social capital and civil society can promote welfare and economic development

When the state is weak or not interested, civil society and the social capital it engenders can be a crucial provider of informal social insurance and can facilitate economic development.

Six-S (Burkina Faso) is a loose federation of rural organizations supported by more formal international NGOs. Social capital has helped Six-S to mobilize over 1 million villagers in 1,500 communities in West Africa in an effort to create better agriculture opportunities during the dry season. (Uphoff, Esman and Krishna, 1997).

Social capital across sectors

State, market and civil society can increase their effectiveness by contributing jointly to the provision of welfare and economic development. The success of this synergy is based on complementary rather than substitutable inputs, trust, freedom of choice and incentives of parties to cooperate (Evans 1996, Ostrom 1996).