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 4: Bonds and Bridges: Social Capital and Poverty

Deepa Narayan


Deepa Narayan1 The development community is increasingly paying attention to the social aspects of development. A country’s economic development is embedded in its social organization, and addressing structural inequities requires not only economic changes but also societal transformation (Stiglitz, 1998). But social phenomena are so all-pervasive, and often so vaguely defined, that taking them into account in a systematic way is very difficult. One approach to untangling and analysing some of the social forces at work in development is through the concept of social capital. The term refers in general to the glue that holds groups and societies together: bonds of shared values, norms and institutions. In this chapter, I concentrate on two aspects of social capital in particular, ‘cross-cutting ties’ or ‘bonds and bridges’ and the interaction between informal and formal institutions. This interaction is one of complementarity or substitution. Although the focus is narrow, the chapter argues that these elements of social capital and their interrelationship help explain a number of puzzles and have important implications for policy. The section immediately following this introduction, ‘What is social capital?’, provides the view of social capital used in this chapter. ‘The analytical framework’ then presents the analytic framework, while ‘The empirical evidence’ reviews the empirical evidence supporting it. The chapter concludes with ‘Policy implications’. WHAT IS SOCIAL CAPITAL? The debate on social capital has brought together sociologists, anthropologists, political scientists and economists. While differences remain, there is agreement that, in contrast to all other concepts of capital central to...

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