Social Capital

The central premise of social capital is that social ties have value. The term 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. In other words, social capital refers to the people we know and the norms of reciprocity that exist between us. The notion of social capital, therefore, emphasizes a wide variety of specific benefits that flow from the trust, reciprocity, information, and cooperation associated with social networks. In this way, value is created for people who are connected and, at least sometimes, for bystanders as well. This entry reviews the concept of social capital by unpacking its perspectives and components as well as assessing its implications in social, economic, and political arenas.

This simple definition of social capital serves a number of purposes. First, rather than focusing on the consequences of social capital, it concentrates on the sources thereof and recognizes that the features of social capital, namely, trust and reciprocity, are developed in an iterative process. Second, this definition includes the different dimensions of social capital and acknowledges that communities can have varied access to each dimension. Third, it identifies community as the primary unit of analysis, while conceding that individuals and households can appropriate social capital. As a result, the notion of social capital has become an influential theoretical concept in the analysis of contemporary social and economic development, and change and cohesion in various societies, communities, and groups. In addition, social capital is related to the description and explanation of social action. While it features in much academic and interdisciplinary discourse, including political science, economics, sociology, and social anthropology, it also has parallels with political agendas, social and economic development and, more recently, social policy development. This has to a large extent become visible in the influence of international bodies such as the World Bank and International Monetary Fund in defining research areas as well as structuring the debate surrounding social issues related to the analysis of social capital.