Social Capital and the Quality of Economic Development

Authors

  • Fabio Sabatini

    1. University of Siena, Department of Economics and Faculty of Political Science
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    • *Research Fellow, University of Siena, Department of Economics and Faculty of Political Science. Email: f.sabatini@unisi.it. Materials for the study of social capital are available on Social Capital Gateway, web site edited by the author of this article, at the address http://www.socialcapitalgateway.org. I wish to thank Christian Bjørnskov, Roberta De Santis, Maurizio Franzini, Eric M. Uslaner and an anonymous referee for helpful suggestions on earlier versions of this paper. I am indebted to Sergio Cesaratto, Elisabetta Basile and Claudio Cecchi for guidance and advice. The paper benefited also from comments by participants at conferences in Lisbon (“Social Capital and Job Creation in Rural Europe, 8–9 November 2007), Moscow (Social Networks, Transactional Economy, and Knowledge-Based Economy, 4–5 March 2007) and London (Social Capital, Sustainability and Socio-economic Cohesion, 30 June 2006), and at research seminars in Cassino, Siena and Verona. All views and errors are attributable only to the author.


SUMMARY

There is a surprising gap in the economic literature on social capital. First, we lack studies addressing the effects of social capital on those facets of development that can contribute in making growth more sustainable in the long run, like, for example, human development and social cohesion. Second, it is still unclear what type of networks may exert a positive effect on the different dimensions of development. In particular, the literature has not yet provided a rigorous assessment of the role of strong family ties, that are generally referred to as a form of bonding social capital causing backwardness. This paper investigates the relationship between the three types of social capital so far identified by the literature (i.e. bonding, bridging and linking), and the “quality” of economic development, as expressed by human development and an index of social well-being summarizing the state of health of urban ecosystems, public services, gender equality, and labour markets.

The empirical analysis is articulated in two stages carried out by means of a multivariate analysis and of a structural equations models analysis.

The results suggest that the linking social capital shaped by voluntary organizations has significantly positive effect on human development, but is irrelevant for social well-being. The bonding social capital shaped by strong family ties negatively affects human development, but significantly fosters the quality of life, mainly through a reduction of workers' precariousness. The bridging social capital of weak ties connecting friends and acquaintances follows the pattern of bonding social capital: it is reinforced by strong family ties and has significantly negative effect on human development.

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