Social Capital and Economic Development
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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.
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Chapter 3: Reflections on Social and Antisocial Capital

Paul Streeten


Paul Streeten Economists have not welcomed the concept of ‘social capital’. Rising interest in it has been compared to the intellectual equivalent of a stock market bubble.1 Steven Durlauf (1999) questions ‘both the importance which some have attributed to social capital and whether it is ultimately as benign a phenomenon as its advocates assume’. A main complaint has been that its meaning is unclear and that different authors attach different meanings to it. Kenneth Arrow (2000) has urged ‘abandonment of the metaphor of capital and the term “social capital’’ ’. His main reason is that social networks are built up for reasons other than their economic value to the participants. Both building new and enjoying existing social relations have intrinsic value. According to Robert Solow (2000), ‘capital stands for a stock of produced or natural factors of production that can be expected to yield productive services for some time’. Solow goes on to ask several rhetorical questions, which ‘is the quickest way to explain why I doubt that “social capital” is the right concept to use in discussing whatever it is we are discussing – the behavior patterns mentioned earlier, for instance’. If social capital had bite as a concept, it would show up in international time series as a residual.2 There is also no determinate relation between expenditure or the devotion of resources and the resulting social capital, or between that capital and output. Mainstream economists tend to reject, or at least treat sceptically, the concept of ‘social capital’. But...

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