The Future of Social Capital in Development Economics Research

Social capital is generally interpreted as the degree of trust, co-operative norms and networks and associations within a society. Economists have become increasingly interested in social capital, following the seminal work of Coleman (1988) and Putnam (1993). Since the publication of these studies a vast quantity of research on social capital has been published by economists, as well as researchers from other academic disciplines. This paper critiques a selection of the literature on social capital, in terms of its definition, measurement and effects. In terms of definitions, it is argued that social capital is a very similar concept to informal institutions, as defined by North (1990). It is argued that parallels can be drawn between the literature on social capital, and the empirical literature on the role of institutions as a deep determinant of economic development. Turning to the future of social capital research, it is argued that valuable insights can be gleaned from the institutions literature.