Abstract
What is social capital? We try to answer this question by using an interdisciplinary approach that combines economics and sociology in three steps. First, we introduce the general economic starting point from New Institutional Economics (NIE) focusing on asymmetrical information and transaction costs. Next, we incorporate the capital theory of Pierre Bourdieu, demonstrating how cultural values may generally compensate for the presence of asymmetrical information. Finally, we introduce the concept of social capital as a more specific version of Bourdieu's capital approach. Overall, we suggest that social capital can be operationalized as a matter of trust. This would solve the fundamental problem in NIE, namely by compensating for asymmetrical information and thereby reducing the size of transaction costs following social and economic interaction. Thus, social capital may be viewed as a new production factor that may help explain differences in the economic welfare of nations.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
