A multi-dimensional perspective on social capital and economic development: an exploratory analysis

Abstract

While various types of capital have been identified and studied as drivers of economic development, recent arguments surrounding social capital in particular have led to calls for greater attention to its role in economic development within a country. Thus, we examine social capital relative to its impact on economic development at the country level. We employ a generalized social capital index (based on measures of trust, associational activities, and civic norms) to test hypotheses suggesting a positive relationship between social capital and economic development, while also considering the impact of social capital on entrepreneurship and on human capital as intermediary effects on economic development. In general, we examine the relationship between core constructs of social capital and economic development within and across 47 selected countries. Findings reveal strong support for the hypothesized relationships, with important implications for policy direction and future research.