Social capital and poverty

This paper attempts to "map" the idea of social capital, which relates different types of evidence and theories originating from different disciplines. After an introduction, it attempts to define social capital from basic economic theory, answering the questions 'what is social about it?' and 'what makes it capital?'. Section 3 extends the theoretical analysis by answering the question 'how does it work?'. It thus disaggregates social capital according to the types of social interaction which form it, the way they form it, and how it raises incomes. Section 4 discusses "endoginising" social capital, and Section 5 distinguishes social capital generated by civil society and that supplied by government. It then turns to the measurement and empirical application of the analytic concepts, at the micro-level of household and firm studies (Section 6), and at the aggregate level of regressions on internationally comparable data (Section 7). The final three sections turn to policy. Section 8 discusses examples of when social capital can be damaging. Section 9 considers how policy should respond to the more usual case of when civil social capital is useful but under-provided. Section 10 focuses on the implications for poverty