What is Social Capital?

 

Social Capital is defined as “networks together with shared norms, values and understandings that facilitate cooperation within or among groups (OECD, 2001). It is one of the resources for promoting future well-being and sustaining well-being over time (OECD, 2017). Other resources include Natural Capital, Human Capital and Economic Capital.

There are three levels of analysis for Social Capital: micro, meso and macro (Halpern, 2005). At the micro-level, it consists of close ties to family and friends; the meso-level refers to communities and associational organisations; and the macro-level concerns state and national-level connections (Halpern, 2005). The concept of Corporate Social Capital (CSC) focuses on the meso-level of analysis.  

 

Various studies have shown that Social Capital is important for economic growth and development (Fukuyama, 1995; Knack & Keefer, 1997; Guiso, Sapienza, & Zingales, 2008). Social Capital is one of the nine ‘pillars’ of a society’s wealth and well-being according to the Legatum Prosperity IndexTM (Legatum Institute Foundation, 2018). The Index report has shown that Social Capital is an essential and fundamental element in the development of prosperity. Social Capital is conducive to strengthening social cohesion and promoting social development, and leads to a more caring and harmonious society.

 

According to the World Bank, research findings and the experience of CIIF funded-projects, Social Capital refers to the institutions, relationships and norms that shape the quality and quantity of a society's social interactions. It includes social norms (personal attitudes and social values), networks and institutions. There are six core Social Capital dimensions, namely (1) social networks; (2) trust and solidarity; (3) mutual help and reciprocity; (4) social cohesion and inclusion; (5) social participation; and (6) information and communication.

 

There are three levels of analysis for Social Capital: micro, meso and macro (Halpern, 2005). At the micro-level, it consists of close ties to family and friends; the meso-level refers to communities and associational organisations; and the macro-level concerns state and national-level connections (Halpern, 2005). The concept of Corporate Social Capital (CSC) focuses on the meso-level of analysis.  

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