Table of Contents

Social Capital and Economic Development

Social Capital and Economic Development

Well-being in Developing Countries

Edited by Jonathan Isham, Thomas Kelly and Sunder Ramaswamy

The chapters in this volume explore the challenges and opportunities raised by this concept for researchers, practitioners and teachers. Social Capital and Economic Development is based upon a consistent, policy-based vision of how social capital affects well-being in developing countries.

Chapter 9: Can Investments in Social Capital Improve Local Development and Environmental Outcomes? A Cost–benefit Framework to Assess the Policy Options

Jonathan Isham

Subjects: development studies, development economics, economics and finance, development economics, environmental economics, environment, environmental economics


Jonathan Isham INTRODUCTION This chapter asks the question: ‘So what?’ What, really, are the policy implications of empirical and case study evidence – including the evidence presented in Part II – that forms of social capital affect well-being in a range of different settings?1 After all, one of the most striking empirical conclusions on the relationship between social capital and economic outcomes can be found in the ground-breaking work of Putnam (1993): that the forms of reciprocity and trust which are key determinants of the relative economic success of northern Italy in the late 1900s were established in the early 1200s. It is hard to imagine a more depressing conclusion for policy practitioners: mix a pinch of trust with a dash of social cohesion, then let simmer for six or seven centuries! Such path-dependence seems to leave little room for the efforts of eager policy makers. In this chapter, the challenges of the concept of social capital are addressed from the perspective of a development practitioner. Specifically, the material in this chapter focuses on investments in development projects whose objective is the improvement of well-being among a subset of target beneficiaries.2 In particular, the focus is on projects whose primary objective is the improved delivery of local services and whose implementation will (to some degree) depend on decentralized service provision from the staff of government ministries who are working in the field, the staff of local NGOs and the intended beneficiaries. This would include developmental projects, for example, whose objective...

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