Wednesday, August 7, 2013

Social capital

While we have a fair idea of social network, only few know about this is relatively new and multifaceted jargon: Social Capital. The simplest way to understand social capital is through the old adage, “it’s not what you know, but who you know”. There is variety of definitions of this word due to highly contextual nature. In words of wiki social capital is the expected collective or economic benefits derived from the preferential treatment and cooperation between individuals and groups.

I became aware of this term while studying Livelihood and Natural resource management. I recalled concept of social capital while working with producer groups. I started wondering about cohesive nature and community cooperation. Any person in society cooperate as well as compete. Still others may be in conflict. Hence, I saw there is a scope for micro to macro level analysis of social capital. Alas ! I am not an expert on this subject. There is also an absence of consensus on how to measure it due to nature and rigor of indicators. Even if we measure and evaluate, how it can contribute to nurturing of social capital.

While we can see result of good social capital means creation of civic culture and strong democracy inside society. We can see it as more utilitarian in disaster recovery and vulnerability reduction. It works as as ‘glue and grease' and can improve efficiency of society by facilitating coordinated action. So what makes social capital so useful ? As per Robert Putnam and Thomas Sander, it enable individuals to access valuable information, facilitates altruism, find partners for joint economic transactions and facilitate collective action.

As per Current Population Survey (CPS), administered by the U.S. Census Bureau, they measure social capital with these indicators:

•Voting in local elections (such as mayor or school board)
•Frequency of using the internet to express opinions about political or community issues
•Frequency of communicating with family and friends
•Trust of neighbors
•Confidence in institutions (corporations, the media and public schools)

Social capital is associated with a host of desirable outcomes:

• There is more trust and there are more blood donations in towns with lots of civic associations.
• Voter turnout is higher, and financial markets work better (Guiso, Sapienza, and Zingales 2008).

A growing literature has pointed out that social capital can also have a ‘dark side’ (Field 2003):

• The Ku Klux Klan, drug-dealers and the mafia rely on social cohesion to ensure co-operation.
• Also, important recent work shows that civic associations can lead to the entrenchment of existing leaders, undermining the quality of governance (Acemoglu, Reed, and Robinson 2013).

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