SOCIAL CAPITAL, ECONOMIC DEVELOPMENT, AND THE QUALITY OF GOVERNMENT: HOW INTERACTION BETWEEN SOCIAL CAPITAL AND ECONOMIC DEVELOPMENT AFFECTS THE QUALITY OF GOVERNMENT

Abstract

This study investigates the relationship between social capital and governmental quality by considering the relationship between social capital and economic development in a cross‐section of countries. It is shown that countries with both high levels of social capital and economic development exhibit higher quality of government as measured by government effectiveness, rule of law, impartiality, professionalism, and a governmental quality index. It is also shown that countries with both high levels of social capital and low levels of economic development are associated with higher governmental quality as measured by professionalism. These findings question the use of heterogeneous indicators for governmental quality and show that the relationship between social capital and the quality of government depends on the level of economic development. Thus, the importance of the level of economic development in explaining the variation in the quality of government sheds light on the social capital theories of governmental qualities.