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 7: Measuring Social Capital: Adding Field Experimental Methods to the Analytical Toolbox

Jeffrey P. Carpenter


Jeffrey P. Carpenter* This chapter discusses the measurement of social capital using the method most often employed, standard survey techniques, and also using an underutilized method, economic experiments. The basic argument of the chapter is that investigators interested in social capital might increase the analytical power of their research by conducting experiments. More specifically, there are a number of experiments that, while designed by economists for other purposes, can also be usefully adapted for the field to validate survey results and measure social capital when one suspects that surveys may be biased by incentive and other problems. The primitives of the concept of social capital are those characteristics of individuals including trust, trustworthiness, reciprocity, generosity and the propensity to cooperate in social dilemmas that make economic activity possible when contracts are hard to enforce. Presumably through some evolutionary process, behavioural conventions (for example, punishing free-riders or peer pressure) arise, allowing societies to accumulate social capital and steering them to more efficient outcomes. While social capital appears to be easily conceived of as a kind of interpersonal grease lubricating economic transactions, it is hard to measure and therefore the concept has not been widely adopted by policy makers. The remainder of this chapter is organized as follows. The next section presents an argument for the use of economic experiments to measure social capital. The third section introduces four experiments that can be used to measure social capital (as defined above), while the fourth section reviews the results of the few studies...

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