THE EVALUATION OF THE IMPACT OF SOCIAL CAPITAL ON ECONOMIC DEVELOPMENT WITHIN THE FRAMEWORK OF THE LEGATUM PROSPERITY INDEX: THE CASE OF OECD COUNTRIES

Abstract

Social capital is one of the variables that influences overcoming problems related to welfare and development. Studies show that social capital level is generally in a linear relationship with the development level of countries. The purpose of study is to examine the relationship between the welfare levels of OECD countries and their social capital levels within the framework of the Legatum Prosperity Index. For this, the effect of social capital, which is one of the 12 components of the Legatum Prosperity index, on the welfare level of OECD countries was examined. the country rankings in which social capital is equally weighted with other index variables and the country rankings where social capital is excluded from the index are compared. The results obtained show that social capital is improving for the rankings of the welfare levels of Norway, Denmark, Iceland, New Zealand, Canada, Australia, USA, Slovenia, Portugal, Israel, Slovakia; has deteriorating effect for Switzerland, United Kingdom, Luxembourg, France, Belgium, Hungary, Czech Republic, Greece, Mexico, Latvia, Japan, Lithuania, South Korea and Turkey. Social capital variable alone did not make a difference in the welfare level rankings of Finland, Netherlands, Sweden, Austria, Ireland, Germany, Spain, Estonia, Italy, Chile, Colombia and Poland.