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Course on Social capital theory

University of Cassino,
PhD Programme in Local Development Economics

Fabio Sabatini

The Course will take place at the University of Cassino, Faculty of Economics, in April-May 2005.

Part 1: What is social capital

This part of the course aims to introduce the multidimensional concept of social capital and to describe the wide and vibrant debate taking place on this topic throughout the social sciences.

Indicative references are available on the web pages Social Capital: Basic Concepts, and Against Social Capital.

• The “explosion” of social capital’s popularity in the social sciences debate since the publication of the “Italian work” carried out by Putnam, Leonardi and Nanetti in 1993 and its exportation to the American context implemented by Putnam’s Bowling Alone in 2000.

• The coexistence of a wide variety of definitions and measurement methods in the social capital literature. Social capital as a new, valuable, analytical tool for social sciences, and/or social capital as a praxis, a code word used to federate disparate but interrelated research interests and to facilitate the cross-fertilization of ideas across disciplinary boundaries.

• The definition of social capital. Brief notes on the intellectual history of the concept and presentation of the most popular definitions given by the literature: Social capital in the work of Bourdieu (1980, 1986), Coleman (1988, 1990), and Putnam (1993, 1995). The distinction between “bonding”, “bridging” and “linking social capital”.
Trust as social capital. The controversy about including trust in social capital’s definition. Putnam (1993) versus Fukuyama (1999).

• The “social structural” approach to social capital. Social capital as a collective resource.
The approach of the Rational Choice Sociology (Coleman, 1988, 1990). The network theory of social capital (Granovetter, 1985, Lin, 2001). Social capital and collective action (Ahn and Ostrom, 2002). Social capital as community governance (Bowles and Gintis, 2002).

• The “individual-based” approach to social capital. Social capital as an individual resource. The neoclassical economics approach to social capital. Brief description of Becker’s (1974, 1996) theory of social interactions.

• Social capital in the World Bank’s research activity and local development projects, and in the International Financial Institutions’ (i.e. World Bank and International Monetary Fund, IMF) strategies to reduce poverty and foster economic growth in developing countries.
Optional: Notes on the role of social capital and participatory processes in the Poverty Reduction Strategy Papers (PRSPs).

• The “downside” of social capital. Social networks as means for pursuing narrow sectarian interests of small groups, which may be in contrast with the well-being of the community as a whole. The potentially negative effects of bonding social capital on the economic activity and innovation. Notes on the New Economic Sociology’s view of social networks as a tool to analyse non competing markets.

Part 2: Operationalising Social Capital

This part of the course aims to introduce students to the problems related to social capital’s measurement, and to provide them with some basic methodological skills for carrying out empirical investigations on the field.
The section may include a specific module aimed to make participants familiarize with some e-tools for quantitative social research, such as SPSS, SPAD and EViews, and may be accompanied by some practical exercises for a first, elementary, implementation of the addressed techniques.

Indicative references are available on the web pages Measuring Social Capital and Empirical Studies on Social Capital and Economic Growth.

• Introductory notes on the problems related to social capital’s measurement and on the shortcomings of the empirical literature in the field.

• Measuring trust as social capital. Measuring trust through surveys. The World Values Surveys, and the Eurobarometer Surveys. Notes on methods, problems, and perspectives.
Validating survey measures through the experimental approach: the use of game-theoretical analytical tools to measure social capital.

• Measuring social networks. Social capital as informal social networks and voluntary organizations. The widespread use of indirect indicators as a weakness of the empirics of social capital. The problem of relating social capital’s measures to its supposed outcomes. The frequent absence of appropriate exchangeability conditions, and the lack of information necessary to make identification claims plausible. Some methods and proposals to overcome such shortcomings.

• Acquiring computer skills for social capital data analysis. A recognition of available data at cross-country, and at a national level. Eventually, exercises on the importation of existing datasets into a suitable software environment (such as that of SPSS, or SPAD).

• Building synthetic latent indicators for social capital, aiming to reduce the complexity of the concept and to make it more tractable for the purpose of the empirical research.
The use of multivariate analysis techniques such as principal component analysis.
How to perform a principal component analysis on social capital data using SPSS (or other suitable software packages).
Elementary exercises on performing multivariate analysis on relevant data using SPSS.

Part 3: Social Capital, Poverty and Development

This part of the course aims to analyse the effects of social capital on human, social, and economic development, and addresses the policy implications of social capital research.
Students should be actively involved in the problem of investigating the relationship between social capital and its supposed outcomes, with a particular regard for topics related to economic growth and public institutions’ performance.

• The biunique relationship between social capital and democracy.
Social capital and civic and political participation. Social capital and public institutions’ performance. Participatory processes as a tool to strengthen social capital’s generation and accumulation processes. The role of the state – and, more in general, of public institutions – in social capital’s generation or disruption.

Indicative references to this section are available on the web pages Social Capital and Political Participation and Social Capital and Political Institutions.

• Social capital and economic development.
Social capital’s ability to lower uncertainty and reduce transaction costs fostering the economic activity, at the micro level, and on social capital as a new analytical tool to explain some macro phenomena like economic growth differentials.
The role of social capital in transition (post-communist) countries. Social capital and institutional transition (or social capital and transition to democrcy). Social capital and economic transition (or social capital and transition to market).

Indicative references to this section are available on the web pages Social Capital and Economic Growth, Social Capital, Knowledge and Innovation, Social Capital and Institutional Transition, Social Capital and Economic Transition.

• Social capital and poverty.
Social capital as a new policy tool for development and the fight against poverty in less developed countries. How social capital affects the coping strategies by poor and vulnerable groups. Social networks as a mean for the creation of spontaneous mutual insurance mechanisms.
Social capital and poors’ capabilities. Social capital and microcredit.

Indicative references to this section are available on the web pages Social Capital and Poors’ Life Conditions, Social Capital and Rural Development, Microcredit and Social Capital, Development Assistance and Social Capital, Other Aspects of the Relationship between Social Capital and Poverty.

Part 4: The problem of relating social capital to its outcomes

• Part 3 has associated the presence of social capital with a wide range of possible outcomes, both in terms of institutional and economic performance and of the fight against poverty and inequalities. The final objective of this part of the course should be to make participants familiarize with some analytical tool suitable to investigate, both from a theoretical and an empirical point of view, the relationship between social capital and such supposed outcomes.
Students’ training should take the form of a working paper containing:
- a brief survey of the theoretical and empirical literature on a certain subject;
- a simple empirical research, supported by the use of appropriate software packages, on national and/or cross-country data, with the aim to investigate the relationship between social capital – measured as shown in Part 2 – and its supposed outcomes – as described in Part 3;
- a reflection on the policy implications of their findings.

Examples of possible subjects for the field research part of the program

• Surveys of the theoretical literature, of the empirical evidence and of practical experiences on certain assigned subjects.

• Empirical investigations on social capital’s economic, social and political outcomes in the Italian national context.
This kind of exercise requires the strict co-operation between students, who should form a certain number of teams, each one composed of two-three persons.
Each team’s activity may be devoted to the completion of a specific task (among those briefly described below).
The final stage of the field research may consist in a plenary discussion between groups, with two main objectives:
- stimulating discussions and improving participants’ ability to cooperate within teams and across different teams;
- coordinating the research results in order to fill the proposed final tasks.

Single, specific, tasks may be as follows:

- Collecting relevant data for the measurement of social capital at the national level, with the final aim to build a dataset suitable for designing a map of social capital’s local endowments.
- Collecting data for the measurement of different aspects of the national social and economic fabric which may be relevant to investigate on social capital’s supposed outcomes. Examples of relevant data are GDP, GDP’s real growth rate, GDP per capita, population below poverty line, labor force and unemployment rates, indicators of health, indicators of political participation, indicators of the institutions’ performance.
- Designing a map of the Italian social capital’s local “endowments”, with a particular regard for trust, social networks and organizations, civic attitudes, civic and political participation.
- Investigating the possible relationship between social capital’s local endowments and its supposed outcomes.

• Cross-country investigations on social capital and economic growth.
Social capital and economic growth in cross-sections of countries (both HDCs and LDCs). Social capital and economic growth in developing countries, Social capital and economic growth in transition economies, Social capital and human development in cross-sections of countries (both HDCs and LDCs).
Data for such analyses are easily available, and proposed subjects should be addressed by single participants.

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