Building Social Capital for Economic Advancement

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Building Social Capital for Economic Advancement

• By
• Marlene Andrews

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Overview

• Thematic Area Social Capital
• Topic Building Social Capital for
  Economic Advancement
• Structure of Presentation
• - Introduction- Objectives-
  Motivation/Rationale- Methodology- Results- C
  onclusion

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Introduction

• Social Capital
• - James Coleman 1988 developed the original
  thought. (SC used by individuals to further
  their own personal objectives.)
• - Robert Putnam 1990s popularised the concept.
  
• - Economists have become increasingly interested
  in SC and have formed a number of arguments as
  to why higher levels of SC can lead to improved
  economic performance.

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What is Social Capital
Macro

Institutions of State, rule of law
Governance
Structural
Cognitive
Trust, norms and values
Local Institutions, networks
Micro
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Definition

• Social Capital can be defined as aspects of
  informal organisation, which can be used for
  productive purposes and also increase the
  potential for economic development in a society
  by creating and sustaining social relations.
  (Coleman and Turner)

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Definition

• The three main ideas of the concept of social
  capital are
• - SC generates positive externalities- These
  externalities are achieved through shared trust,
  norms, and values and their consequent effect
  on expectations and behaviour - shared trust,
  norms and values arise from informal forms of
  organisations based on social networks and
  associations.

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Critique

• No consensus on a definition . (The concept seem
  to be all things to all men)
• No uniform guideline for measurement instruments
  making it difficult to do cross comparison
  studies
• The causal direction of SC difficult to determine
  
• SC also has a negative side

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Objectives

• The objectives of this study are to
• - Review the literature on social capital and
  its economic value
• - Highlight existing case studies which uses
  social capital as a determinant of growth
• - Determine and evaluate the economic benefits
  of social capital on sporting groups in
  Trinidad.

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Problem Statement

• The standard neo-classical models of growth have
  had limited success in explaining growth.
• - There is research on cross country growth
  differences which suggest that physical and human
  capital accumulation did not play a dominant role
  in accounting for economic growth.

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Table 1 Selected Growth Accounting Results for
Individual Countries

(The World Bank Economic Review, 2001, Vol. 15,
No2)
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Importance to TT

• Policy makers are greatly influenced by the
  traditional neoclassical theory.
• The common proxy used to measure economic growth
  is GDP.
• TT economy dependant on petroleum.
• Social capital can increase productivity levels
  in all sectors.

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Methodology

• Assumed Social Capital exists (Putnam criteria)
• Focused on Sporting groups
• - Football, Basketball, Netball and Cricket
• Interviewed sporting administrators
• Administered questionnaires to athletes
• Results

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Table 4a Networking as an economic benefit of
Social Capital
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Table 4b Collective Action as an economic
benefit of social capital
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Table 4c Credit availability as an economic
benefit of social capital
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Conclusion

• Social Capital has economic benefits
• This economic benefit forms part of TFP
• Need for further research, especially in the
  Caribbean, to capitalize on these benefits.

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THANK YOUfor your attention