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Social Capital: An economic driving force

There has been increasing evidence that social cohesion is critical for societies to develop sustainably and flourish economically. According to the World Bank (2000) social capital is ‘…the rules, norms, obligations, reciprocity and trust embedded in social relations, social structures and society’s institutional arrangements which enable members to achieve their individual and community objectives.’ Its benefit stems from the fact that a strong community, which induces a sense of accountability and belonging, can

  1. lead to cooperative action when solving problems

  2. increase the levels of innovation

  3. influence a set of social norms and moral conduct

  4. reduce information asymmetry

  5. increase informal safety nets These have been proven in numerous case studies, some of which can be read in the World Bank's paper 'Social Capital: The Missing Link?'. Unfortunately, it is difficult to measure social capital, and as such, there has been criticism over its labelling as a ‘capital’ good. It is easy to intuitively judge the level of social capital present in a community but giving it a quantifiable measure has proven challenging. Comprised of difficult to quantify concepts such as ‘trust’ and ‘networks’, some researchers have used proxies such as memberships in civil organisations and hours spent volunteering. Bankston and Zhou argue that social capital is difficult to measure because it is not a resource held by an individual or a group but the result of the participation of economic actors. Relationship Global’s ‘Friday Five’ blog says that following hurricane Sandy, the commendations made by the Republican politicians to President Obama are a reflection of the level of social capital in the USA. However, they argue that ‘the greater long-term crisis in America is the steady loss of social and relational capital, leading to the kind of greed and recklessness which were a direct cause of the financial crisis’. Friday Five suggests that voters, in the upcoming presidential elections, should perhaps consider ‘which candidate for president will do more to build social capital’. Here are 150 ways to build social capital.

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