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The concept of social capital proposes that societies with denser social networks tend to
have more effective political institutions, be more cohesive and record stronger economic
performances. However the causal foundations of this influential model have not been
critically examined. Some evidence put forward in Putnam's analysis of the Italian
regions is questioned. An empirical assessment of the model in relation to EU member
states is carried out. Although the data fit the model, an alternative equality model is
statistically stronger as well as intuitively more appealing. The reasons for the strong
appeal of the social capital model despite its weaknesses are discussed.
Anti 'Social Capital': Civic Values versus Economic Equality
in the EU
The concept of social capital has brought a much needed focus on the interplay
of broad societal forces1. Outlined by Bourdieu (1980), developed by Coleman
(1988), and elaborated by Putnam (1993) in his comprehensive analysis of Italian
political life, social capital refers to "features of social organization, such as trust,
norms and networks, that can improve the efficiency of society by facilitating
coordinated actions" (Putnam, 1993; 167). Essentially, in societies where there are
dense social networks, activities requiring complex interactions are made easier.
Greater trust, 'civisme', and mutual interdependence promote a more efficient,
cohesive, productive and successful society. Putnam's analysis of the Italian
regions found that areas with greater social capital were more likely to display
superior economic performance and have a more vibrant political and civic life.
More recently, in 'Bowling Alone' (2000), his celebrated analysis of patterns of
interaction in the US, he struck a warning note that social capital was in decline
in that country. He argued that the data from domains as diverse as membership
of voluntary groups, political, religious and civic engagement, informal social
ties, and general levels of trust all displayed a consistent downward trend since
the 1970s. The causes for this were varied and unclear but probably included
changes in family structure, suburban sprawl and the increasingly popularity of
(private) electronic entertainment.
The author would like to thank three anonymous reviewers for providing valuable comments upon an
earlier draft of this paper.
Many social scientists have enthusiastically welcomed the concept and have
found in it a dynamic for research and policy. As Uslaner and Dekker note,
(2001; 176) social capital may be the "all-purpose elixir for the ills of society. A
heavy dose of social capital supposedly makes a society healthier and wealthier
and perhaps wiser". It leads to prosperity and good government. "No wonder
then that the academic and policy communities together rejoiced when a set of
pioneering researchers … came up with a simple solution to the collective action
problem" (ibid; 177). The concept has been employed in areas as diverse as
understanding information networks among Mexican-origin secondary school
students in the US (Stanton-Salazar and Dornbusch, 1995), government
performance in the UK (Hall, 1999), the well-being of young children (Morrow,
1999), and economic returns on employees working in a US call-centre
(Fernandez, Castilla and Moore, 2000). It has been particularly popular in the
analysis of physical health, e.g. see Rose (2000) on the health of Russians, and
detailed reports in The Lancet, July 2001.
Criticism of the Model
However, the concept has had its critics. It has been suggested that the data used
by Putnam in his assessment of change in the US may have masked the growth
of new forms of social involvement (Schudson, 1996), romanticised the quality
and quantity of social involvement in the past, (Skocpol, 1996) and ignored the
change in organisational practices (Valelly, 1996). Other critics have focused on
the validity of his historical assumptions (Tarrow, 1996), on the terminology
around the concept (Smith and Kulynch, 2002) and its predictive power
(Veenstra, 2002). Putnam has responded effectively and frequently to many of
these criticisms.
However there is a more fundamental way in which the merits of the social
capital model must be assessed and it is one that has been relatively neglected.
The entire edifice of the concept relies on particular causal foundations whose
strength needs to be examined. In his study of Italy, Putnam (1993) explicitly
challenged economic determinist models and posited civic development as the
primary social force. “A skeptic might suspect that the civic community is merely
epiphenomenal, that only economic well-being can sustain a culture of civic
involvement. … [that] economics matters, not civics.” (ibid; 152). But no: for
Putnam, economic development is a by-product of social capital - “civic
conditions seem gradually but inexorably to have brought socioeconomic
conditions into alignment” (ibid; 153). In this way, Putnam's position can be
loosely associated with those of Fukuyama (1995) and Landes (1998) who
propose that values take causal priority over economics; this is in opposition to
theorists like Lipset (1959), Flanagan (1987) and Inglehart (1997), who in different
ways assume that economic development underpins the evolution of values.
Thus one can say that social capital is philosophically an idealistic rather than
materialistic conception.
One of the strongest and most specific pieces of evidence advanced by Putnam in
making the case for the primacy of civic over economic forces is presented in
chapter five of his study of Italian society. In 1901, Calabria was more
industrialised than Emilia-Romagna. However Emilia-Romagna was "blessed …
with virtually the most civic culture in all of Italy" (ibid; 154) while Calabria was
feudal and had high levels of alienation. By the 1980s, Emilia-Romagna was one
of the wealthiest regions in Italy while Calabria was one of the poorest, the result
it is implied, of low levels of social capital in Calabria. Can the reader accept that
the civic culture of Emilia-Romagna enabled its rapid economic development by
the late 1980s ? An economic map of regions of the European Union provided by
the Rowntree Foundation Inquiry into Income and Wealth (Hills, 1995, vol. 2; 75)
based on 1990 data shows that "the richest parts of Europe are mostly in the
central core of southern Germany and northern Italy and there is a general
tendency for regional incomes to fall as distances from the Alps increase" (ibid;
74). In other words, it appears as though economic development in Western
Europe in the last century was heavily contingent on straightforward
geographical factors and that proximity to a core productive area was crucial in
the economic advances of the regions of a number of contiguous states. Certainly
Emilia-Romagna and Lombardia of northern Italy are included among the very
wealthiest areas of Europe (measured in GDP at PPP) but so too are BadenWurttemburg, Bayern and Hessen in Germany. It needs to be clarified if the
same civic-based explanation holds true for the pattern of German economic
development. The Congress of Vienna restored most German princes to their
territories in Metternich's repressive post-Napoleonic plan for non-Prussian
Germany (see Sagarra, 2001, p. 20-22) comprising most of contemporary BadenWurttemburg, Bayern and Hessen. It stretches the social capital explanation into
strange gymnastic forms to suggest that these conservative constitutional
monarchies also brought into being the kinds of high levels of social capital and
positive civic values, as did allegedly the Italian communal republics, triggering
economic development.
The European Union - A Case Study
In order to assess the adequacy of the social capital model, the states of the
European Union (EU) will be assessed across a number of variables. Thus, just as
Putnam sought to use cross-sectional data relating to its twenty regions to make
inferences about the evolution of Italian regions, data from the EU's fifteen
current members will be examined to see whether similar inferences can be
drawn about European patterns of social development. Specifically, the core
causal argument, that levels of social capital ultimately shape economic forces,
will be assessed. In this paper, the economic force of primary interest is that of
economic equality. Equality can be used as a proxy generally for economic
development since it is known from economics that growth and equality are
highly related (a variant of Kuznet's law). Inglehart (1987; 1291) has also
demonstrated the strong positive relationship between GNP and economic
equality across many countries. However, equality is also preferred over other
measures of economic development because of the growing belief of some
researchers that it may not be simply an epiphenomenon of other factors but may
have major causal implications (see further discussion below).
The statistical section of the European Union, Eurostat, gathers detailed and
comprehensive information on the fifteen current member states of the EU.
Treating these states as separate units for analysis, the evidence in favour of a
social capital model can be examined. In figure 1a below, the correlation data for
a variable path from social capital to two forms of satisfaction are displayed.
The social capital measure for each society is based on the 1998 Eurobarometer
(49) which asked representative samples of respondents in each member state of
the EU about membership of a number of different types of organisations
(sporting, religious, political, etc.). The measure used per sample is average
number of organisational memberships per person. The 'Transparency' variable
is based on the assessment of the perception of corruption in each society by
Transparency International in 1997 (based in turn on the perceptions of
nationally-based journalists). As predicted by the social capital model,
'Transparency' (or more specifically a perceived absence of corruption) strongly
and positively correlated with levels of social capital in each society. Social
capital, as suggested by its advocates, also is strongly related to higher economic
productivity; hence societies with higher levels of social capital spend more on
their research and development (R&D) on an annual basis (figures from Eurostat,
the EU statistical service). In turn, both Transparency (the absence of corruption)
and spending on R&D shape economic factors including levels of economic
equality (which are higher in wealthier societies); economic equality is calculated
as the ratio between the proportion of national income going to the poorest 10%
and richest 10% of population (figures for 1998 from Eurostat). The link between
equality and social capital was also noted by Putnam (1993; 224) in his study of
the Italian regions - "income distribution … is more egalitarian in civic regions, r
= 0.81". Finally general social satisfaction (as assessed by Eurobarometer in 1998
and measured in a simple four point scale ranging from 'very satisfied' to 'not at
all satisfied') as well as satisfaction with work (from Eurobarometer data in 1997)
are both higher in more egalitarian societies.
Thus one is offered a logically consistent model in which certain measures
relating to EU countries are strongly associated. However, returning to the issue
of causality, is it plausible that the primary force in the relationship of these
variables should be social capital, the density of social networks ? Such a position
runs counter to related research findings. Wilkinson (1996) has pointed out for
example with regard to the relationship between individuals' physical and
mental well-being and economic events, that the debate has clearly identified the
economy as the primary force; "were the unemployed less healthy because
unemployment damages health or was it just that unhealthy people were more
likely to become unemployed ? … Only when evidence from factory closures
studies - causing unselective unemployment - became available, was it shown
conclusively that health really did deteriorate as a consequence of unemployment"
(1996; 177-178, emphasis in original). Studies again and again highlight
specifically that levels of social capital are a function of economic circumstance.
Burgoyne's (1985) analysis of the impact of unemployment demonstrated that
social life was curtailed and circles of friends grew smaller. Classic research by
Lazarsfeld, Jahoda and Zeisel (1933), cited in Paugam and Russell (2000),
suggests a similar pattern. In their study of the Austrian town of Marienthal,
they found that after the closure of the main employer in the town, the activity of
clubs and associations declined rapidly. Even though unemployed people had
more time on their hands, they were more lethargic about becoming involved
with dramatic, cultural and sporting organisations. Thus, it was an economic
disaster (or 'actual' capital) that impacted on social capital, not vice versa. While
more recent research by Paugam and Russell (2000) suggests that isolation by an
economic event like unemployment may be mediated by social capital, the
position is at best that - that social capital may mediate economic reality, not
determine it.
The Case for Equality
Wilkinson (1996) highlights the salience of equality as one of the key economic
forces in shaping social life and is critical of Putnam's interpretation; "[Putnam]
clearly sees bridging social cleavages as a function of social capital. Given that
social cleavages would be easier to bridge if they were smaller, this contrasts
rather starkly with the lack of attention he gives to the influence of income
distribution on social cohesion" (p. 221). Thus Wilkinson proposes equality as the
commanding force in determining the nature of social interactions. He argues
that more egalitarian societies tend to be more cohesive, have more legitimacy,
greater trust, mentally and physically healthier populations and indeed, social
capital. A specific link between work satisfaction and equality was also
suggested by the economist Scitovsky (1976; 89). He proposed that in very
unequal societies, the rich can easily pay the relatively very poor to do mundane
and boring work such as cleaning and domestic duties whereas in egalitarian
societies, this occurred far less easily and frequently. In other words, work in
more egalitarian societies should be less tedious and more interesting and
ultimately more satisfying. In an influential article, Inglehart (1987), taking a
wider, cross-cultural perspective, observed the curvilinear positive relationship
between economic development and economic equality both of which are then
linked to positive change towards more civic and work-related values and
attitudes among populations.
Thus, it is reasonable to look again at the inter-relationships of variables in the
EU case study but to place economic factors, specifically economic equality as the
primary determining force. In figure 1b, an alternative correlational path is
Figure 1b ABOUT HERE
In the scenario of figure 1b, higher levels of economic equality mean (following
Scitovsky) that it is relatively more expensive to hire or employ others. Therefore
more is spent attempting to automate work, as indicated by the strong
correlation between Equality and R&D spending (based on Eurostat figures for
the proportion of GDP spent in 1998 on Research and Development). Greater
equality also means that work is more challenging and interesting for those who
have it in more egalitarian societies, hence the link to higher levels of work
satisfaction (from Eurobarometer data in 1997). In turn, work place satisfaction is
linked to greater levels of social capital - as noted in the studies above, where
people lack stable, satisfying employment, they are less likely to get involved in
social life, clubs and associations. There is also a separate path linking equality to
transparency - where economic power is relatively equally shared in a society,
then one must surmise that political power is also more likely to be equally
shared and the potentially corrupt practices of elites are more difficult to conceal
or legitimise. In societies that are transparent and egalitarian, people have a
greater incentive to join popular organisations, participate more broadly and
anticipate greater transparency within these associations. Ultimately, societies
that are participatory, egalitarian, transparent and populated by more stimulated
work forces are happier ones.
Of course, the sole difference between figures 1a and 1b is that the order of the
causal sequence has been varied. Other possible permutations might be
suggested (the entire correlation matrix is available in appendix 1). The
identification of causality in social development is clearly a complex matter (see
Dahl, 1999). However, that does not mean that debates over first principles are
sterile. Blalock (1964) has provided one of the best treatments of the issue of
causality and suggested that while it may be impossible to prove definitively, the
causal principle is a "highly useful theoretical tool" (p. 12) for social scientists.
When a whole series of social measures overlap with one another, inevitably a
plurality of models offer themselves as seductive explanations. The partisan for
social capital model may protest that the array of strong correlations between the
measure and other positive social attributes must imply that these relationships
are more fundamental than mere by-products. And indeed in table 1a below, in
the columns to the left, the EU-derived data generates an impressive set of strong
relationships between the elementary measure of social capital and a diverse set
of variables.
Tables 1a & 1b ABOUT HERE
However when the level of economic equality of each society is controlled for,
via partial correlation, it can be seen in the right hand column that the social
capital measure is greatly weakened in its relationship with all these positive
social measures. In table 1b above, it can be seen that equality has a stronger
relationship with most of these variables and while certainly weakened when
social capital is controlled for, its relationships are nonetheless stronger in more
cases than when the situation is reversed. Similarly in table 2 below, a multiple
regression analysis including economic equality explains more variance in social
satisfaction than the same set of variables does where social capital is substituted
for economic equality.
Discussion - The Strange Appeal of Social Capital
That certain social attributes, relating to economic, political and civic values tend
to co-vary is widely known but the social capital model has usefully raised the
profile of this insight once more. However the core assumptions in the model are
worrying. The evidence in favour of social capital as causal in a series of positive
social relationships is very flimsy. The evidence from Putnam's Italian study
does not by itself convince. The use of more recent data treating the member
states of the EU as the basic units of analysis also fails to favour the social capital
model over the social equality model. Indeed apart from statistically
outperforming the social capital model, the economic equality explanation is
more economical (aptly), direct and plausible and overlaps with evidence drawn
from the sociology of health, social psychology, political science as well as from
thoughtful philosophical arguments, in particular the influential work of Rawls,
The question then must be why the model has become so popular. It has been
promoted by the World Bank and the International Monetary Fund (IMF), see
Whitehead and Diderichsen (2001). It has galvanised and inspired the work of
many academic researchers. And as Putnam commented on the reaction to an
earlier paper (1995) outlining the ideas developed more fully in Bowling Alone,
the mass media response has been very favourable; "I was invited to Camp
David, lionized by talk-show hosts, and (the secular equivalent of canonization
in contemporary America) pictured with my wife on the pages of People" (2000;
506). Why social capital instead of social equality ? It may well be that it is
because social capital promises so much in return for so little. As its enthusiasts
remark, "social capital is a relatively quick fix … [but] is an undemanding master
… almost any form of social interaction will help solve collective action
problems" (Dekker and Uslaner, 2001; 178). Putnam wrote that the sceptic may
be drawn to models of economic determinism over social capital. However both
the cynic and the idealist are doubtless drawn to the social capital model - it
suggests that difficult social problems can be overcome, if we only communicate
and ultimately trust each other more. It conveys an inoffensive and folksy
message of convenience. Social amelioration, it appears, does not require radical
and fundamental economic transformation. The difficult task of challenging
powerful vested interests to redistribute economic wealth can be avoided in
building cohesive societies. Rather, an active interest in their local football club
will suffice to turn 'ghetto moms' into 'soccer moms'. Vibrant bird-watching
associations, busy rotary clubs and regular philatelic conventions will start the
wheels of progress rolling. This is not a caricature of the position; in Bowling
Alone, these are precisely the sorts of measures set forth for 'renewing the stock
of social capital'.
Blalock, H.M. (1964) Causal Inferences in Nonexperimental Research. Chapel Hill,
University of North Carolina Press.
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Journal of Sociology, 94, (Supplement), S95-S120.
Dahl, R.A. (1999) On Democracy. New Haven, Yale University Press.
Eurobarometer data from German Social Science Infrastructure Service (GESIS)
Eurostat data from Eurostat (EU Commission) at
Fernandez, R.M., Castilla, E.J. and Moore, P. (2000), Social Capital at Work:
Networks and Employment at a Phone Center, American Journal of Sociology, 105,
Fukayama, F. (1995) Trust: Social Virtues and the Creation of Prosperity. New York:
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Science Review, 53, 69-105.
Inglehart, R. (1997) Modernization and Postmodernization. Princeton, NJ, Princeton
University Press.
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Regimes and the Experiences of Unemployment in Europe. Oxford, Oxford University
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Figure 1a - A possible path connecting social capital to work and social
satisfaction for fifteen EU states (but social capital and work satisfaction data
only available for 13 of these states). All data from 1998 except for transparency
and work satisfaction (1997 data).
r = 0.72
r = 0.80
Work Satisfaction
r = 0.80
r = 0.77
r = 0.78
Social Satisfaction
r = 0.77
Background historical,
geographical and
political factors.
Figure 1b - Another possible path connecting economic equality to social
satisfaction for fifteen EU states (but social capital and work satisfaction data
only available for 13 of these states). All data from 1998 except for transparency
and work satisfaction (1997 data).
r = 0.71
r = 0.80
r = 0.68
r = 0.78
r = 0.77
Social Satisfaction
r = 0.80
Background historical,
geographical and
political factors.
Table 1a - The association between social capital and a number of other variables both
directly and controlling for economic equality. Data drawn from13 EU member states,
1997/8 but social capital and work satisfaction only measured in 13 states.
Economic Equality
R&D spend
Work Satisfaction
Social Satisfaction
Correlation with
Social Capital
(Pearson's r)
Partial Correlation
(Controlling for
Economic Equality)
Not Applicable
Table 1b - The association between economic equality and a number of other variables
both directly and controlling for social capital. Data drawn from15 EU member states,
1997/8 but social capital and work satisfaction only measured in 13 states.
Social Capital
R&D spend
Work Satisfaction
Social Satisfaction
Correlation with
Economic Equality
(Pearson's r)
Partial Correlation
(Controlling for Social
Not Applicable
Table 2 - The variance explained in the dependent variable 'social satisfaction' by two
sets of four independent variables. Data from 1997/98 for 15 EU states except for social
capital and work satisfaction (13 cases).
Dependent Variable - Social Satisfaction
Adjusted R
including Social
Squared = 0.50 including
Economic Equality
Social Capital
Beta = 0.366
Economic Equality
Beta = 0.319
R&D Spend
Beta = 0.240
R&D Spend
Work Satisfaction
Beta = 0.423
Work Satisfaction
Adjusted R
Squared = 0.67
Beta = 0.597
Beta = 0.243
Beta = 0.430
Beta = 0.480