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Social Capital and Economic Growth Revisited

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  • Hjerppe, Reino
Abstract
Social capital facilitates cooperation in the society. High level of social capital promotes economic efficiency by lowering transaction costs. Trust towards strangers and low level of corruption are examples of high level of social capital. The concept of social capital is already an old one, but interest in studying its role and effects has increased notably during the past ten years or so. Review of the literature concerning the connection of economic growth and social capital shows that many studies have found strong positive correlation between the two. This does not, however, establish a causal relationship between them. In addition, defining and measuring social capital unequivocally has proven difficult. The concept has both a structural (whether people participate in group activities) and a cognitive dimension (norms, attitudes). The paper also deals with problems of formation of social capital and the possibilities to tackle the measurement problems.

Suggested Citation

  • Hjerppe, Reino, 2003. "Social Capital and Economic Growth Revisited," Discussion Papers 307, VATT Institute for Economic Research.
    • Handle: RePEc:fer:dpaper:307
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    File URL: https://www.doria.fi/handle/10024/148286
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    References listed on IDEAS

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    Cited by:

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    3. Oksuzler, Oktay, 2008. "Does Education Pay off in Turkey? An Ordered Logit Approach," MPRA Paper 14375, University Library of Munich, Germany.

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