Social Capital and Economic Development

The monography introduces the concept of social capital. It breaks some barriers between the neoclassical economics and the rest of the social sciences. In the focus is the role that social factors play in the economic processes. The concept is a constructed one and brought to life because the dominating theories turned out to be inapt to explain some current processes. The social capital is locked in social links and interactions created and maintained by tradition or deliberately. It is both social (the wellbeing of any individual depends on and influences the welfare of the others) and capital (it possesses main characteristics of capital). The social capital accelerates the economic development. It increases such economic growth and improves such income distribution which decrease poverty. From this point of view, the social capital is among the determinants of the transition in the Central and Eastern Europe. The quality and the quantity of the social capital shapes the difficulties of the transformations and the differing speed of the reforms. International economic organizations play a special role for the transition. They generate social capital directly and indirectly. The social capital in Bulgaria remains unexplored. It is underdeveloped for the insufficient experience of self-organizing and undertaking collective actions beyond the family. The investments in social capital will make it possible to follow the Western pattern of development. The social capital challenges the politicians alike. The concept imposes a new role on the political establishment - to promote the positive social capital and to minimise the influence of the negative social capital.