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social capital

  Those characteristics of social structure or social relations that facilitate collaborative action and, as a result, enhance economic performance. The term has been popularized by Robert Putnam (1993), a political scientist, who emphasizes key aspects of social organization \'such as trust, norms, and networks\' (p. 167). However, the original usage of the term is normally attributed to Coleman (1990), a sociologist, whose definition is somewhat broader. As Foley and Edwards (1997) note, \'for Coleman, social capital is to be found in any sort of social relation that provides a resource for action\' (p. 552). The \'action\' in question may be individual or collective, and may or may not have any direct economic significance.

It is only with Putnam\'s work that the concept of social capital came to be closely linked to social action leading to improved economic performance. In his classic study, the concept of social capital emerged as the central explanatory variable in his analysis of the factors underlying the economic success of the northeastern regions of Italy relative to the rest of the country. In a manner strongly consistent with the earlier work of Piore and Sabel (1984) and economic geographers such as Storper and Scott (1989) and Sayer and Walker (1992), Putnam argued that the economic prosperity of Emilia-Romagna and surrounding regions in the 1970s and 1980s could be attributed to the prevalence of certain norms of reciprocity, trust and \'civic engagement\', widespread amongst local economic actors, that encouraged cooperation and collaboration. Moreover, this collaborative behaviour was crucial to the region\'s economic success (Putnam, 1993, p. 161):

Typically singled out as essential for the success of industrial networks, in Italy and beyond, are norms of reciprocity and networks of civic engagement. Networks facilitate flows of information about technological developments, about the credit-worthiness of would-be entrepreneurs, about the reliability of individual workers, and so on. … Social norms that forestall opportunism are so deeply internalized that the issue of opportunism at the expense of community obligation is said to arise less often here than in areas characterized by vertical and clientelistic networks. What is crucial about these small-firm industrial districts, conclude most observers, is mutual trust, social cooperation, and a well-developed sense of civic duty — in short, the hallmarks of the civic community.While Putnam\'s arguments may have added little new insight to the pre-existing work by geographers and others on the importance of social processes and associative behaviour to the performance of firms in industrial districts, perhaps his unique contribution has been to encapsulate a set of complex arguments within a single term — social capital. Within the field of political economy, Putnam\'s emphasis on regional and civic institutions and their economic consequences represents an important complement to the analyses of institutional economists such as Hodgson (1988) and North (1990), who had already begun to revive interest in the impact of national social institutions on relative economic performance.

The increasingly widespread use of the concept of social capital can also be understood within the context of growing interest, across a number of social sciences, in the fundamental connections between economic and social or cultural phenomena. Reviving the much earlier arguments of Veblen (1919) and Polanyi (1944) that central economic institutions such as those governing market exchange are the product of active social construction, a growing number of contributors to the field of \'socio-economics\' have adopted the view that \'the social\' and \'the economic\' are inextricably intertwined (see, for example, Granovetter and Swedberg, 1992; Barnes, 1995; Gertler, 1995; Thrift and Olds, 1996; Schoenberger, 1997).

As might be expected of such a seductively simple term, Putnam\'s conception of social capital has been the subject of considerable critical commentary. One strand of criticism takes issue with Putnam\'s analysis of civic politics — even in those societies with a large stock of social capital — as being unrealistically devoid of conflict and contestation. Seen in this light, Putnam\'s model becomes rather static and lifeless. As Amin argues (1996, p. 327):

Putnam\'s definition of civic virtue … represents a kind of paradise on earth, with citizens, state and economic networks intertwined in civilized harmony and mutual regard. Putnam\'s good citizenship ends up, perhaps inadvertently, as a denial of civil society as an arena of social contestation.Instead, Amin contends, societies should aspire to fostering \'a new civic politics … as an arena of social contestation\', enabling the civic sphere to function dynamically \'as a source of democratic change\' (p. 328).

Another strand of critique notes that the theory of social capital is mute on the crucial issues of why some regions or nations appear to have an abundance of social capital while others have little, as well as which institutions matter most in the production of social capital. While Putnam rhapsodizes about the virtues of bowling clubs and choral societies as local institutions that build social capital by fostering social interaction, others argue that macro-regulatory institutions governing labour markets, industrial relations, corporate governance, industrial organization and investment exert a much more important influence on the degree to which firms engage in collaborative behaviour (Christopherson, 1993; Gertler, 1997). (See also new institutional economics.) (MSG)

References Amin, A. 1996: Beyond associative democracy. New Political Economy 1: 309-33. Barnes, T.J. 1995: Political economy I: \'the culture, stupid\'. Progress in Human Geography 19: 423-31. Christopherson, S. 1993: Market rules and territorial outcomes: the case of the United States. International Journal of Urban and Regional Research 17: 274-88. Coleman, J. 1990: Foundations of social theory. Cambridge, MA: Belknap Press of Harvard University Press. Foley, M.W. and Edwards, B. 1997: Escape from politics? Social theory and the social capital debate. American Behavioral Scientist 40: 550-61. Gertler, M.S. 1995: \'Being there\': proximity, organization and culture in the production and use of advanced manufacturing technologies. Economic Geography 71: 1-26. Gertler, M.S. 1997: The invention of regional culture. In R. Lee and J. Wills, eds, Geographies of economies. London: Edward Arnold, 53-64. Granovetter, M. and Swedberg, R., eds, 1992: The sociology of economic life. Boulder, CO: Westview Press. Hodgson, G.M. 1988: Economics and institutions. Cambridge: Polity Press. North, D. 1990: Institutions, institutional change and economic performance. Cambridge: Cambridge University Press. Piore, M.J. and Sabel, C. 1984: The second industrial divide. New York: Basic Books. Polanyi, K. 1944: The great transformation. Boston: Beacon Hill Press. Putnam, R.D. 1993: Making democracy work. Princeton, NJ: Princeton University Press. Sayer, A. and Walker, R. 1992: The new social economy. Oxford: Blackwell. Schoenberger, E. 1997: The cultural crisis of the firm. Oxford: Blackwell. Storper, M. and Scott, A.J. 1989: The geographical foundations and social regulation of flexible production complexes. In J. Wolch and M. Dear, eds, The power of geography: how territory shapes social life. London: Unwin Hyman, 21-40. Thrift, N.J. and Olds, K. 1996: Refiguring the economic in economic geography. Progress in Human Geography 20: 311-37. Veblen, T.B. 1919: The place of science in modern civilization and other essays. New York: B.W. Huebsch.



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