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Is Social Capital an Effective Smoke Condenser?

Research output: Working paperResearch

Social capital is defined as mutual trust. It is related to production by a key hypothesis: social capital determines how easily people work together. An easy-to-use proxy (Putnam's Instrument) is the density of voluntary organizations. Social capital might be a new production factor which must be added to human and physical capital, or it might enter as a reduction in either transaction or monitoring costs. A direct and an indirect way to measure social capital are discussed. The crucial question is if social capital can be changed. That is, if self enforcement can replace third party enforcement, and it is discussed how much harm totalitarian regimes do to social capital, when they expand their area of central control.
Original languageEnglish
Publication statusPublished - 1999

    Research areas

  • Social Capital, Trust, Monitoring Costs, Enforcement, Transition, Socialism, Transaction Costs, Density of Voluntary Organizations, Voluntary Groups, World Bank

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ID: 32298066