There are a lot of highly interesting talks and events on governance at the World Bank these days, often we discuss them here in our blog. The other week we had a guest from the United Nations Democracy Fund (UNDEF), Roland Rich, who is the Fund's Executive Head. He gave a remarkable presentation, full of memorable propositions that would all merit a blog post or two. From "We're all footnotes to Plato" to "An idea is not responsible for the people who support it" there was a lot of food for thought. For this post, I'll pick only one of his many inspiring ideas: the role of social capital in development.
Social capital is something of a buzzword in political science and development economics, brought to fame by Harvard professor Robert Putnam. Very crudely, the term summarizes the resources that are available to civil society because people work together – these resources enable citizens to effectively manage themselves and to demand their due from government. The World Bank's Deepa Narayan defines social capital as "the glue that holds groups and societies together – bonds of shared values, norms and institutions." A reference from Philosopher David Hume helps illustrating the logic of social capital: "Your corn is ripe to-day; mine will be so to-morrow. ‘Tis profitable for us both, that I shou’d labour with you to-day, and that you shou’d aid me to-morrow. I have no kindness for you, and know you have as little for me. I will not, therefore, take any pains upon your account; and should I labour with you upon my own account, in expectation of a return, I know I shou’d be disappointed, and that I shou’d in vain depend upon your gratitude. Here then I leave you to labour alone; You treat me in the same manner. The seasons change; and both of us lose our harvests for want of mutual confidence and security."
This concept is highly relevant to the demand side of governance. Rich asserted that trust and social cohesion, elements of social capital, are critical to enabling group action that empowers the people and promotes democratization. The effectiveness of social capital may well be the explanatory variable for successful transitions from oppressive regimes to democratic governments. From a civil society perspective, social capital could be understood as civic strength: the more social capital, the stronger civil society is and the more effective in realizing its own objectives.
There are numerous discussions on whether the theory of social capital as defined by Putnam and briefly introduced here is conceptually and analytically viable, and indeed I have my own doubts. But this post is not the place to discuss conceptual issues – this would take about two or three thick volumes – but to point out its relevance to development and governance. Of course, our readers are very welcome to contribute their own thoughts on the concept!
There has been some interesting research on social capital at the World Bank. I'm particularly referring to the work of Deepa Narayan, who analyzed the relationship between poverty and social capital. In her review article Bonds and Bridges: Social Capital and Poverty Narayan finds that an increase in social capital by one statistical unit means an increase of the income of a poor household by 20 %. Higher income, on the other hand, is associated with greater civil and political rights, better protection of human rights, lower levels of political instability and higher levels of efficiency in public institutions.
The mechanism behind these findings is the distribution of power. If social groups have links to other groups that are quite unlike themselves, even marginalized people have a chance of getting their own share of power. Ties cutting across social groups provide a flow of power, resources, and information – a combination that has the potential of initiating transformation. Solidarity is strong inside a group with strong social cohesion, even if there are only few ties to the outside. This at least ensures that the group members aren't left to deal with their problems alone.
In his best-selling book Bowling Alone Putnam illustrates the importance of social capital for civil society in the U.S. Together with his Saguaro Seminar he claims "Social capital makes democracy work." Research shows that this is true for developing just as much as for developed countries. After all, there's corn to be reaped everywhere all the time. What a pity to let it go to waste because there's no kindness among people.
Photo credit: Flickr user DWinton