Sustainable Local Economic Development in Croatia and the Role of Social Capital

Abstract

Over the course of the last decade or so, the concept of social capital - social and solidarity relationships, norms of reciprocity, trust-based interactions, and the set of civil society institutions and associations that underpin efficient collective action - has spectacularly burst on to the local economic and social development scene. Much of the credit for the current popularity of the social capital concept can be attributed to the work of Robert Putnam in relation to northern Italy, undertaken over the 1970s and 1980s with a number of local collaborators. As a result of Putnam's insights, social capital is now seen as a pivotal factor in successful local and regional economic development: for example, through more efficient government structures, higher levels of local volunteerism and civil society activity, a reduced need for formal contracts in business activities, greater local effort invested into community development projects, and the bottom-up empowerment, mobilisation and self-improvement of marginalised groups and regions, especially through their enhanced ability to constructively link up with centres of power and wealth outside of their immediate community. Organisations such as the World Bank now consider social capital to be the missing link in development. An understanding of the importance and impact of social capital is now routinely incorporated into virtually all economic and social development projects promoted and financed in Croatia by all the IFIs, the major bilaterals and many international development NGOs. Importantly, the EU has identified the need to promote social capital in Croatia as one of the most important tasks in the coming years, particularly in those regions marked out by conflict and inter-ethnic discord. Most EU programmes are, accordingly, heavily contingent upon promoting social capital as a way to promote economic and social integration and increased co-operation at the local level.This paper challenges the growing consensus around the work of the social capital industry and its centrality to successful economic and social recovery in Croatia and elsewhere. For sure, the main concepts associated with social capital could constitute a genuinely socially progressive force for change: solidarity, reciprocity, mutual support, trust, empowerment can underpin sustainable local economic development in a number of creative ways. However, the paper sees social capital concept as actually only very loosely connected, perhaps just inadvertently, to genuinely sustainable local economic development. Its real function is, instead, not so much to support and facilitate emerging bottom up community activity and popular pressure for meaningful local change, but actually to contain and block any such local developments wherever they might present a challenge the core imperatives of the wider neo-liberal policy programme associated with EU integration and World Bank/IMF requirements.