Picture this: You’re driving down a rural road, and suddenly your car breaks down.
You’re stranded, with no phone signal and no idea what to do.
But then, a friendly farmer pulls up and offers to help. She calls a mechanic she knows, and within an hour, your car is fixed and you’re back on the road.
This is an example of social capital at work – the norms and networks that enable people to act collectively.
In their study, “Social Capital: Implications for Development Theory, Research, and Policy,” Michael Woolcock and Deepa Narayan explore the concept of social capital and its potential for promoting development in low-income communities.
They argue that social capital can play a crucial role in creating positive outcomes, including economic growth, improved health and education, and reduced crime and violence.
Let’s see how.
Social Capital, Defined
We’ve covered social capital extensively over the last several weeks, and similarly, the authors of this study define social capital as
“the norms and networks that enable people to act collectively.”
They emphasize that social capital is not just about individual connections but also about the broader social norms and institutions that support collective action.
Some of these norms include trust, reciprocity, and social networks that help create social capital, which can vary by community, region, and country.
Further, the study notes that while bonding social capital can provide social support and a sense of belonging, bridging social capital is particularly important for promoting economic growth and reducing poverty.
However, bridging social capital can be particularly challenging, as it often requires overcoming social and cultural barriers.
Regardless, social capital can be particularly important for marginalized communities, as it can provide a source of support and resources.
Social Capital vs. Individual Outcomes
According to research, social capital has several advantages over traditional development approaches that focus on individual outcomes or economic growth.
Social capital can create “public goods” that benefit everyone in a community, which can be self-sustaining over time.
The authors note that social capital can help to build trust and cooperation within a community, which can be particularly important in post-conflict or post-disaster contexts.
While the study makes obvious the many benefits of social capital, it also notes potential pitfalls and emphasizes the need for a nuanced and context-specific approach to promoting it.
Social capital is not a universal remedy for development challenges – there are several potential disadvantages, including the possibility of exclusion and inequality within social networks, the risk of “elite capture” where social capital benefits only a select few, and the potential for social capital to be used for negative purposes such as corruption or discrimination.
Further research into social capital and its potential in low-income communities might give us a clearer idea of how to avoid these pitfalls.