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Social Capital, Economic Growth and Transition Economies

Research output: Working paperResearch

  • http://www.asb.dk/omos/institutter/departmentofeconomics/
Summary: What does social capital mean and how can it be built? Social capital is considered as a new production factor which must be added to the conventional concepts of human and physical capital. Social capital is productive because it increases the level of trust in a society and allows more transactions to take place without third-party enforcement. Theory and lessons from empirical evidence lead to three general recommendations for building social capital in the future: First, the state must withdraw and minimize its role in the economy so to leave room for voluntary organization and free-trade. Second, state withdrawal should be combined with efforts to increase economic growth and gain popular support for the implementation of reforms. Third, voluntary groups, beneficial to the economy, should not be institutionalized to prevent them from turning into harmful rent-seeking groups.
Original languageEnglish
Publication statusPublished - 1998

    Research areas

  • Social capital, Economic Growth, Transiton Economies, Transaction costs, Third party enforcement, HHÅ forskning

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ID: 32300413