In recent decades, debates over the determinants of economic development have routinely turned on disagreements over the proper boundaries between the state and the market. Statists argue that the imperfect and immature markets of most developing countries require the guidance of a strong, autonomous, Weberian state. Neo-liberals champion the ef® ciency of free markets in allocating resources toward their most productive uses and decry the distortions accompanying many forms of state intervention. Neither perspective places primary emphasis on the role of civil society‐ those intermediate forms of social organisation that stand between, and partially independent of, both state and market. When statistsand neo-liberals do sometimes focus on the role that civil society plays in economic development, they ® nd common ground around a negative assessment of the economic impact of associationalism. Statists fear that a vigorous civil society will press multiplied demands upon the state. These external pressures undermine the bureaucratic autonomy that serves as the central prerequisite to neutral, technocratic management of the development process. At the extreme, a constantly agitated civil society threatens to overwhelm fragile political institutions and lead to ungovernability in the face of fractious and contradictory demands from below. 1 Neo-liberals see matters in similar terms. Societal mobilisation usually entails collusion among rent-seeking agents who seek to transfer income from other segments of society by manipulating markets or state policies. These distributive coalitions reward the organised at the expense of the unorganised in a zero-sum game. Widespread rent seeking adds nothing to overall economic development and in fact interferes with the growth process by distorting incentives and impeding innovation. 2 In the last decade, a growing number of sociologists, economists and political scientists has sought to overturn this negative portrayal of the economic consequences of associationalism. The notion of social capital has served as the driving wedge of this effort to de® ne a ``third way’’ along the path to development. Social capital consists of the economic potential embodied in social organisations and the norms of trust and reciprocity that animate them. In this view, the self-organisation of civil society is a necessary element of successful