Download In search of social capital

In search of social capital
Gordon Johnston and Janie Percy-Smith
Introduction
Defining social capital
Social capital has entered the lexicon of politicians and theoreticians globally. It is used to
inform and increasingly to justify policy interventions in a wide range of policy fields: economic
development, health, regeneration, community development, environmental policy and social
exclusion. The World Bank has described social capital as the ‘missing link’ in development. In the
UK, prior to New Labour taking office in 1997, the Commission for Social Justice had already
identified social capital as a key element in tackling disadvantage:
The moral and social reconstruction of our society depends on our willingness to invest in
social capital. We badly need to mend a social fabric that is so obviously torn apart. Social
capital is a good in itself; it makes life possible. But social capital is also essential for
economic renewal; the two go together … economic prosperity depends not only on
economic but also on social resources. Social capital can encourage new investment as
well as making existing investment go further; it is the glue that bonds the benefits of
economic and physical capital into marginalized communities. (Commission for Social
Justice, 1994: 308)
Given the claims that are made for social capital it is perhaps surprising that the concept is so
lacking in a widely agreed definition. Some theorists have questioned whether ‘social capital’ is,
indeed, little more than a new term for an old idea, namely that civic and community involvement
can have pos itive consequences for individuals and society more generally. However, the recent
proliferation of literature on the subject suggests that there is something new within the concept or
the way that it is currently being applied in theoretical and policy terms.
In seeking out a definition of social capital, perhaps the starting point should be Bourdieu
who defines social capital as “the aggregate of the actual or potential resources which are linked to a
durable network of more or less institutionalized relationships of mutual acquaintance or
recognition. Social capital in this definition consists both of the benefits to which individuals have
access by virtue of their participation in groups and the relationships themselves. Such social
activity is instrumental insofar as it is, at least in part, designed with this end in mind. Furthermore,
in Bourdieu’s view the ultimate ‘end’ of the creation of the social networks which give rise to social
capital is enhanced access to economic capital. Importantly in Bourdieu’s formulation, the volume
of social capital possessed by any individual is determined in part by the volume of other forms of
capital (economic, cultural or symbolic) “possessed in his own right by each of those to whom he is
connected”. For Bourdieu, the concept of social capital provides the means to analyse how “this
particular kind of capital is accumulated, transmitted and reproduced, the means of understanding
how it turns into economic capital and, conversely, what work is required to convert economic
capital into social capital”. Bourdieu readily admits his dissatisfaction with his treatment of this
‘conversion problem’ and suggests that the concept of social capital can and should inform ‘genuine
comparative studies’.
Bourdieu’s thinking about social capital developed alongside his work on cultural capital.
The latter had its genesis in Bourdieu’s concern to explain the relationship between academic
achievement and social class and was developed as an explicit critique of human capital theory and
natural aptitude explanations of academic performance. Citing the early work of Nobel prizewinning economist Gary S. Becker, Bourdieu charged human capital theory with having a narrowly
monetary sense of investment and return and of failing to appreciate domestically transmitted
cultural capital as “the best hidden and socially most determinant educational investment”. For
Bourdieu, the “scholastic yield from educational action depends on the cultural capital previously
invested by the family”, while the economic and social yield of qualifications “depends on the social
capital, again inherited, which can be used to back it up”.
While Bourdieu’s critique of human capital theory is informed by the importance he attached
to the explanatory power of cultural capital, Coleman is concerned with the role of social capital in
the formation of human capital. Like other forms of capital, Coleman sees social capital as
productive’ of certain ends that could not be achieved in its absence. He identifies three forms of
social capital: obligations, expectations, trustworthiness of structures; information channels; and
norms and effective sanctions. The first of these refers to situations in which an individual does
something for someone else with the expectation that that person will reciprocate at some time in the
future. This then results in a norm and expectation of generalised trust and reciprocity. The second
form of social capital refers to the idea that an individual can trust another to provide accurate
information which is then used to inform action. Again, there is an assumption that there is a
generalized background of trust. The third type of social capital refers to effective norms and
sanctions which contribute to a generalised environment of trust. Each of these forms of social
capital facilitate the resolution of collective action problems; individuals are prepared to take risks
because they are confident that others will do likewise at some point in the future.
Robert Putnam, the most recent and most celebrated exponent of social capital, takes a
somewhat different approach from his antecedents. Whereas Bourdieu and Coleman see social
capital as a benefit that accrues primarily to an individu al as a result of their participation in a set of
social relationships, Putnam sees social capital as a property of communities, cities, and even
nations. Putnam defines social capital as “those features of social organisations, such as networks,
norms and trust, that facilitate action and cooperation for mutual benefit”. Thus, as Putzel notes,
Putnam, and subsequently Fukuyama, do not simply see social capital “as a ‘public good’ (ie a byproduct of social and economic activity) but as intrinsically for the public good” (emphasis in
original). In practice, however, Putnam equates social capital with the level of associational
involvement and participation that exists within a community and makes the distinction between
‘bonding’ social capital – links to people ‘like me’ – and ‘bridging’ social capital – links to people
‘unlike me’. Szreter questions whether membership of voluntary associations is enough to engender
social capital, arguing that “it is the quality of the relationships which these associations engender
among their members and in their relations with the wider society which is critical in determining
whether or not they truly promote social capital in the sense … of additional productive benefits to
the society (as opposed to sectional privileges and advantages for the favoured few who are
members”.
Fukuyama defines social capital as “the existence of a certain set of informal values or norms
shared among members of a group that permits cooperation among them”. However, he goes on to
state that “The sharing of values and norms does not in itself produce social capital, because the
values may be the wrong ones”. The norms that produce social capital include the meeting of
obligations and reciprocity. Informally enforced norms reduce transaction costs entailed by formal
coordination mechanisms. Fukuyama argues that social capital is not a subset of human capital
because it is a property of groups rather than individuals – “The norms underlying social capital …
must be shared by more than one individual to have any meaning”. Fukuyama’s definition also
allows for social capital in certain circumstances to have negative consequences.
What is common to all these definitions of social capital are the concepts of reciprocity and
generalised trust. In other words, individuals behave towards each other with the expectation that
they share certain norms and values; they engage in actions which are of benefit to others in the
expectation that those actions will be reciprocated at some point in the future.
Origins of social capital
Social capital, it is suggested, inheres in the social relationships that exist between
individuals. Positive experiences of trust and cooperation within a group or community enhance the
likelihood of such exchanges in the future, thus creating a ‘virtuous circle’. We know from the
evidence available that social capital is differentially present in different communities and it is
claimed that communities with high levels of social capital derive certain other benefits including
more effective governance and a propensity to economic development. How then does this virtuous
circle come to be created in the first place? As Whiteley argues, “… if little or no social capital
exists in a society to begin with, it is very difficult to create it, since anyone who tries to cooperate
in such a society will be exploited. In such a situation the process of generating social capital will
not get off the ground”. If social capital does develop in such situations, it implies that certain
individuals are willing to take the risk that altruistic behaviour on their part will not be taken
advantage of by others.
Boix and Posner discuss two possible hypotheses to explain the emergence of cooperation.
According to the first hypothesis, “stable cooperation can emerge spontaneously among otherwise
uncooperative actors when they value future pay-offs and expect to interact again and again an
indefinite number of times. As long as the pattern of interaction has no foreseeable end, actors will
have no incentive to defect from cooperation and a virtuous circle of social capital-building will be
initiated”. However, as Boix and Posner argue, this hypothesis does not adequately account for
variation in the degree of social cooperation across communities.
The second hypothesis makes a distinction between cooperative relations within associations
producing public goods and those within associations producing private goods. In associations
which produce public goods , the ‘free-rider’ problem is created; individuals are able to enjoy the
benefits created by the existence of organisations which they themselves do not contribute to. For
such organisations to get going, there needs to be a pre-existing norm of reciprocity. In associations
creating private goods, by contrast, there are no such incentives to free-ride; not to participate would
entail exclusion from the benefits that the association exists to create. Boix and Posner argue that it
is possible that the latter kind of interaction could, over time, generate sufficient social capital to
facilitate the emergence of the former kinds of association.
Coleman, following Simmel’s account of social exchange, sees the source of social capital in
the accumulation by individuals of obligations on the part of others in line with the norm of
reciprocity. A further source of social capital derives from strong identification with a particular
group, sect or community which gives rise to solidarity within a clearly defined ‘bounded’ group.
Putnam is unclear about the source of social capital, emphasising its historic origins, but suggests
that once developed it is maintained through voluntary activity.
Measuring social capital
Many of the theories of social capital referred to above assume that social capital is
quantifiable. However, measuring social capital is not easy. The lack of clarity surrounding the
concept together with its inherent abstractness creates certain difficulties. In particular, social capital
has tended to be measured using indicators or proxies – indirect measures of the phenomenon –
rather than the phenomenon itself.
The most famous empirical investigation of social capital is that of Putnam who sought to
measure the level of social capital in terms of community involvement and participation using a
composite indicator containing measures of such things as newspaper reading, membership of
voluntary organisations and expressions of trust in political authorities. Using these indicators in
relation to contemporary American society, he attributes a wide range of social and political ills to
the decline in participatory and associational behaviour. However, the empirical basis for his
discussion in the American context has been widely contested, especially on the grounds that his
study was based only on available data on group membership which may be too limited to give a
full picture in a complex society. In his celebrated study of 20 Italian regional institutions, Putnam
seeks to ascertain the causes of differential performance in terms of economic development and
governance. He concludes that regional governments in the north attract higher levels of public trust
than those in the south. This is explained in terms of the differential extent of ‘civic virtue’; in the
north, citizens are more likely to vote, to obey the law, to cooperate with each other and their leaders
are more likely to be honest and committed to the public good. Thus a degree of circularity or
tautology is set up. Putnam writes: “voluntary cooperation is easier in a community that has
inherited a stock of social capital in the form of norms of reciprocity and networks of civic
engagement”. As Portes notes:
As a property of communities and nations rather than individuals, social capital is
simultaneously a cause and effect. It leads to positive outcomes, such as economic
development and less crime, and its existence is inferred from the same outcomes. Cities that
are well-governed and moving ahead economically do so because they have high social
capital; poorer cities lack in this civic virtue. (Portes, 1998: 19)
Or, more succinctly, “if your town is ‘civic’, it does civic things; if it is ‘uncivic’, it does
not”.
Hall uses similar indicators to those employed by Putnam to compare levels of social capital
in Britain with those in the United States. He defines social capital in terms of “networks of
sociability, both formal and informal, and the norms of social trust widely associated with such
networks”. Following Putnam, social capital is measured in terms of: membership of voluntary
organisations , individuals’ charitable endeavours including volunteering, and ‘informal sociability’
as measured by time spent in pursuits associated with social capital and levels of social trust.
Taking stock of the extent of social capital in any society at any point in time is thus a
tremendously challenging, if not impossible task. Fukuyama suggests that an alternative approach is
to measure the absence of social capital through such things as social deviance, crime rates, family
breakdown, drug use, tax evasion etc. His justification is that “since social capital reflects the
existence of cooperative behavioural norms, social deviance ipso facto reflects a lack of social
capital”. He notes, however, that this approach ignores the issue of distribution; social deviance and
social capital are unevenly distributed and thus conclusions drawn from aggregate data are likely to
be misleading. He uses this approach to compare levels of social capital cross-nationally using as
indicators: breakdown of the nuclear family (measured in terms of divorce, illegitimate births);
crime; child abuse; and alcoholism and drug abuse.
Summary of what is being claimed for social capital
The concept of social capital carries with it a heavy burden of claims that it may not be
strong enough to support. At its most grandiose, as typified by Putnam, the presence or absence of
social capital is used as a single explanatory variable for economic and political performance or, as
in Fukuyama, for social integration or disintegration. In Putnam and Fukuyama there is a
presumption that social capital is causal rather than symptomatic. There is also a marked tension
between the urgency that informs their call to enhance and renew social capital and the lack of
clarity regarding its genesis, maintenance and sustainability. It is this tension which explains, in part,
why social capital has emerged as the idée fixe of policy makers, invariably at the expense of any
sustained engagement with historical context or structural considerations.
Social capital, in the form of strong formal and informal networks, contributes to shared
norms and trusting social relationships. Such relationships improve the overall quality of life for
communities and the life-chances of individuals. Specifically, high-trust communities typically
experience less crime, anti-social behaviour and social fragmentation. For individuals, social capital
contributes to better health and higher levels of educational attainment and promotes access to
employment and other opportunities through the use of an extensive network of relatively weak ties.
Social capital contributes to effective governance; high levels of trust reduce the transaction
costs associated with the collective action problem. It promotes economic development by reducing
the principal-agent problem; in high trust societies, agents are less likely to be unproductive,
therefore reducing the need for intensive supervision. Social capital also contributes to economic
development by facilitating innovation and risk taking.
Social capital is maintained through high levels of civic and voluntary activity. Such activity
enhances democracy by offering citizens opportunities to acquire skills relevant to effective
participation and encouraging ‘civic-mindedness’.
While most of the claims made for social capital emphasise its positive consequences for
either individuals or society as a whole, some theorists have identified negative consequences.
Portes dentifies four such negative consequences:
1. Exclusion of outsiders as a result of the strong ties that exist within a particular group or
community.
2. Group or community closure which inhibits the economic success of its members as a
result of ‘free-riding’ on the part of some group members who are in a position to make
claims on those within the group or community who command resources.
3. Conformity within the group or community resulting in restrictions on personal freedom
and autonomy.
4. Downward levelling as a result of group solidarity which arises out of opposi tion to
mainstream society and inter-generational experience of exclusion or discrimination.
In all of these instances social capital takes the form of intensive ties within a clearly defined,
closely knit group, which operate in such a way as to exclude outside influences and enforce
damaging group norms.
Towards a research agenda
The key questions that need to be answered are: “what social capital is, how it can be
measured, where it comes from, and particularly how to get more of it” . We should perhaps add to
this list ‘and is social capital always a good thing?’ In this final section we elaborate on these
questions and in so doing put forward a research agenda.
What is social capital?
Can we define and characterise social capital in a manner that is conceptually coherent and
avoids circularity? Are there different kinds of social capital apparent in different contexts? Is social
capital really ‘new’ and conceptually different from older notions of civic culture?
Where does social capital come from?
If we assume that social capital contributes to and is part of a virtuous circle, how is that
virtuous circle created in the first place?
How can we get more of it?
In communities which are currently characterized by low levels of social capital, can social
capital be developed through grassroots, bottomup initiatives or are top-down interventions
required? Hall claims that social capital can be sustained and enhanced through policy interventions
to support voluntary associations. Similar views are espoused by Evans, Levi, Putzel and Woolcock.
Can it be created in this way in communities that currently have very low levels of social capital?
Does the path-dependency argument hold?
Once developed, what range of activities and behaviours sustain social capital? Is voluntary
association really the cornerstone of social capital? What about less formal networks and collective
activities?
Is social capital always a ‘good thing’?
How can we characterise the different forms of social capital? In particular, what are the
characteristics of positive and negative social capital? The development of intensive linkages within
a marginalised community may only serve to reinforce its marginalisation. What may be required in
such situations is external linkages. How can these be put in place?
Who benefits from social capital?
Does social capital create wider social benefit or sectional privilege for the favoured few?
What are the implications of gender and class differences?
Researching social capital
It is significant that many if not most of the studies referred to above us e predominantly
quantitative data from large-scale surveys and other studies to seek to understand a phenomenon
which inheres in small groups in very particular contexts. Furthermore, such studies make important
assumptions about the characteristics of social capital, which are insufficiently tested through the
methodologies that are employed and are inadequately underpinned by theory. The indicators of
social capital typically used, as suggested above, are frequently contentious and the direction of
causation and the relationship between indicators at best open to question.
What is required instead is a series of intensive, community-based studies which (as far as is
possible) start with a very limited number of hypotheses about the nature, characteristics and
consequences of social capital which can then be tested through in-depth, predominantly qualitative,
community-based research. A starting point might be an account of what constitutes ‘successful’ or
‘effective’ communities. Such an account would need to go beyond a rehearsal of data relating to
crime, unemployment, teenage pregnancy, school achievement and so on. In addition to data of this
kind, an understanding would need to be developed of the context – social, historical and economic
– of those communities and the perceptions and insights of people who live in those communities. In
addition, the categories ‘successful’ and ‘effective’ need to be unpicked: successful according to
what criteria? Effective for whom? This should then result in the identification of a series of
community characteristics and processes that can be explored in greater depth with individuals and
groups.
Conclusion
Social capital is the contemporary equivalent of the philosopher’s stone. Just as alchemists
pursued the secrets of turning base metal into gold, academics, policy makers and politicians have
allegedly unpacked the mysteries of effective communities and collectivities. The political appeal of
such claims is not hard to discern. At the conservative end of the spectrum “social capital is located
in commitment to traditional family structures and relationships and a collective moral order of
‘normative’ consensus around traditional values, duties and responsibilities”. Within a more
progressive agenda, social capital is viewed as the key to effective citizenship, enhancing
participation in public deliberation, reducing social exclusion and revitalising civil society. More
broadly, the resources and institutional mechanisms for building social capital are deployed to
challenge the salience of the traditional antinomies of plan and market, public and private.
We would argue that the social capital debate lacks the level of minimal agreement about the
meaning of the key operational concept to sustain meaningful debate and dialogue. In order to move
the discussion forward it is necessary to return to some very basic definitional questions and develop
a methodology that is capable of evaluating the utility and explanatory power of social capital
without resort to proxy or surrogate data. We have also argued that such an enterprise is likely to
require a re-engagement with historical context, structural considerations, path dependency and the
role of the state at the local and national level.
From “Policy & Politics”, vol 31 no 3 321–34