Social capital and effective communities

In my two previous posts about social capital I’ve provided a hopefully useful definition and conceptual map of what social capital is and a brief summary of some interesting findings when it comes to social capital’s causal effect on a range of policy areas, specifically: economic performance, health and wellbeing, and education.

This post gets down into the area I’m really interested in: how the roots of the effectiveness of communities lie in their citizens’ social capital.

Again, the examples and analysis are brief, but hopefully illustrative.

Getting on together (or not)

Clearly, a group of people that gets on better with each other (i.e. a question of how bonding their bonding social capital is) will find it easier to work together and achieve success than a group which doesn’t get on. It could be that people don’t get on because of clashes of personality, or just because everyone in the group doesn’t know each other well enough.

There’s a lovely example of how and why this can matter, as quoted in Halpern:

Following the closure of military bases there are often a number of options for what happens to the land released. A case study contrasted the face of the land from two airforce bases that were closed in the USA, both roughly equal in size and natural resource attributes. At one base, all the significant wildlife habitat was destroyed by real estate development, but at the other, nearly a fourth of the land was preserved as a wildlife refuge. The authors concluded that the most significant factor accounting for the radically difference outcomes was not the strength of any objective case, but the social capital and political culture of the communities surrounding the bases, enabling one community to lobby and act much more effectively than the other.

(For those interested in the case, it is captured in the following: Burton, L. and Williams, T. (2001) This bird has flown: the uncertain fate of wildlife on closed military bases. Natural Resources Journal, 41(4): 885-917.)

A further example is the way in which tenants’ associations managed buildings in New York that were handed over to them to run themselves. Where such ownership arrangements were successful, this was thought to be the result of higher social capital – particularly bonding and linking – found in the buildings.

Finally, another good example of linking social capital in particular is citizens’ committees. These are brought together in order to address specific local issues, and have been shown to be most successful when they ensure several different ways of liaising with and contacting local government. Furthermore, local government views such committees as a key source of valued information.

Getting out (or not)

The issue of bridging social capital and the associated (and controversial) concept of “closure” are a very interesting part of this work.

“Closure” is very tight bonding social capital without any bridging capital. Though the very strong and close relationships between members of a particular community means they can pass on their values and beliefs to their fellow members and next generation, it’s not always the case that these values or beliefs are necessarily good for the group.

To take a counter-example from Halpern:

A longitudinal study of rural American communities found that horizontal linkages of community leaders – their links with other important community figures – [was] particularly important for their communities’ long-term viability.

Those communities that don’t then have those horizontal bridging links, but do have strong bonding links, may find themselves in difficulty as a result. The wider social and political networks from which they are disconnected could leave them vulnerable to decisions being made “about them” without the opportunity to participate or influence them. (If I’m feeling brave enough, I may one day apply the idea of “closure” – albeit “closure” for understandable reasons – to the disability movement.)

The downsides of social capital in effective communities

Even though good amounts of social capital can make for more effective communities, it can have its downsides:

High social capital as manifested in high-trust, frequent meetings and freely flowing information among dense social networks can mean that the whole community is involved in decision-making, but it can also make the process time-consuming and extended. For example, a study of communities affected by the 1997 Red River Flood in Canada found that those with higher levels of social, as well as physical and human, capital were better prepared and more effective in responding to the flood. But such higher levels of social capital also made decision making more complex and brought with them the risk of delays.

Interestingly, the overall pattern of social capital in Britain is one that suggests there has been a significant decline in its presence over the last few decades (though not, it should be said, as wide as the decline in the USA). An interesting detail of this decline, though, is that it is more accurate to say that this decline is not homogenous. Indeed, the UK’s middle classes are most likely to be associated with gently rising social capital – for example, through more memberships of and involvement in more organisations – whilst the manual classes are most likely to be associated with sharply falling social capital.

Thus, what once was a phenomenon at the level of the individual known as the “sharp elbows” of the middle classes – meaning that choice in the system tended to benefit the better off as they navigated various complex systems (such as education and health) – is now also to be found in the context of what makes for effective communities and local government.


Social capital’s effects on different policy areas

Having established what social capital is in the last post, this post provides a brief summary of some interesting findings when it comes to social capital’s causal effect on a range of policy areas, specifically: economic performance, health and wellbeing, and education.

Though the information below is a bit disjointed and brief, it’s shared in order to demonstrate the very useful contribution that social capital makes in different areas and why.

Economic performance

Social capital, as measured by social trust, is a significant indicator of GDP growth.

What partly underpins this is how social capital can aid how markets work. The efficient functioning of markets requires a good flow of information to connect buyers and sellers together. These flows of information are strongly affected by the size and character of social networks, as are the transaction costs between buyers and sellers, particularly when it comes to the norms and sanctions found within groups.

So, social capital can reduce transaction costs in any buying-selling arrangement by:

  • Altering the terms of trade – that is, their level of formality
  • Eliminating, or greatly reducing, the need for expensive contractual arrangements
  • Generating decision flexibility
  • Saving time.

When it comes to different types of social capital, it is thought that successful firms and regional economies are successful because they invest in different types of social capital.

Thus, they have a balance of investing between:

  • Bonding social capital, i.e. in relationships inside the company
  • Bridging social capital, i.e. in relationships between the company and other (sometimes competitor) companies
  • Linking social capital, i.e. between a company and its regulators

And when it comes to government, it is proposed (albeit with some academic controversy about the veracity of the claim) that less hierarchical, more horizontal or egalitarian forms of social capital would seem to be particularly conducive to good government. In the case of New Zealand, for example, it has been mooted that a dramatic shift to formal contracts has led to a deterioration in government performance.

Thinking of economic performance at the micro-level of the individual, it is known that a given individual can be more productive when surrounded by others who are skilled and able – an effect made possible by bonding social capital.

Furthermore, in tougher times for example, those who have been made redundant but have more extensive social networks – especially to those still in employment – are significantly more likely to gain new employment. This said, it is most often “weak ties” – connections through loose associates, distant relatives and friends – that are of most benefit in the labour market, suggesting forms of bridging and linking capital are the most effective.

Health and wellbeing

It is not so much that social capital – in the form of social networks – can stop you getting sick, but rather that they help you to recover when you do get sick.

For example, evidence suggests (albeit from a very medical model perspective) that those who have chronic illness appear to have fewer intimate relationships and friends. People suffering illnesses also tend to report a lower quality of support, regardless of the number of persons in their social network. Conversely, people who are less socially isolated and more involved in social and civic activities tend to have better health.

As a result, it is generally accepted that intimate, confiding relationships act as a “buffer” to protect individuals from the “adversities” of life. It is a robust finding that people who are isolated and lack intimate social support are more likely to have depression when under stress, and to remain depressed for longer, than those who have such support.

A corollary of this is that supportive social relationships are able to modify or counteract the stress reaction in humans. It is thought that this happens in at least four ways:

  1. The presence of supportive relationships generally implies that the individual is likely to be exposed to less stress in the first place
  2. The presence of social support is known to modify the consequences of stress
  3. Social support may shape people’s behavioural reactions to stress.
  4. More subtly, an individual’s basic reactivity to stress is affected by the quality of their supportive relationships early in life.


When it comes to explaining the variance in the educational success of a child, a significant amount – separate to the main factors such as parental education and financial resource – is explained by social capital. Social capital also helps to explain the impact of parents’ human and financial resources as well.

For example, interactions with attentive adults are the key channel through which the child develops emotional and social control, and becomes an attentive and effective self-learner. Similarly, if people believe in someone’s abilities and give them positive feedback, their aspirations are increased and they are encouraged to aim high to achieve.

Mentoring is a well-established and common way of attempting to boost the social capital of people, typically those from a disadvantaged background. Generally (and this is across US and UK literature) evidence suggests that this being done one-to-one isn’t very successful, perhaps because it leads to labeling and stigmatization of the person involved. But those mentoring interventions that happen with a whole peer group at one time, rather than singling out individuals, work well. Mentoring interventions also appear to be more effective if offered relatively early in a young person’s educational career.

Evidence indicates that there are clear effects of community-level (meso) social capital on educational performance, and these operate over and above the impact of family-level (micro) social capital. These relate to the ways in which teachers within schools network with each other, sharing learning and techniques and having support when it comes to norms and sanctions relating to, for example, behavior.


Fully recognising the slightly disjointed nature of this post, its aim has been to provide a summary of some of the most interesting causal effects social capital has on a range of policy areas.

By far the most interesting area to me is in how social capital can affect the effectiveness of communities – the subject of my next post.

Drawing a map of social capital

Social capital is a concept that has risen in popularity and importance over the last few years. I first encountered it in the social care literature but have found it cropping up in all sorts of places, especially over the last 18 months.

For the last few weeks I’ve been making my way through David Halpern’s 2005 book on the topic, which has been quite a remarkable read for a number of reasons.

As Halpern notes, many people think of social capital as the missing variable that economists have overlooked in their rational behavior economics models.

Furthermore, a spate of articles and research studies has emerged documenting a relationship between the form and quality of people’s social networks – a type of social capital – and a range of important outcomes across policy areas such as the economy, health and wellbeing, crime, education and effective governance.

Over the course of a series of posts, I aim to share some thoughts and reflections on various issues and possibilities the book raises, across a range of potential areas.

Before doing so, it’s useful to draw a drastically simplified conceptual map of what social capital is (being one that puts to one side the very many academic debates about the concept).

But, before doing even that, the following quote is useful to know what space social capture occupies:

Societies are not composed of atomized individuals. People are connected with one another through intermediate social structures – webs of association and shared understandings of how to behave. This social fabric greatly affects with whom, and how, we interact and cooperate. It is this everyday fabric of connection and tacit cooperation that the concept of social capital is intended to capture.

Turning to the concept of social capital itself there are three basic elements, each of which can have both formal (explicit, institutionally codified) and informal (implicit, tacit) aspects:

  • A network
  • A cluster of norms, values and expectations that are shared by the group members
  • Sanctions – punishments and rewards – that help to maintain the norms and the network

Social capital can act at a variety of levels – micro (that of the individual), meso (the community / the region) and macro (national) – and there are three functional subtypes of social capital, as follows:

  • Bonding social capital is inward looking and tends to reinforce exclusive identities of homogenous groups (a kind of sociological superglue)
  • Bridging social capital is outward looking and encompasses people across diverse social cleavages (a kind of sociological WD-40)
  • Linking social capital is a special form of bridging social capital that specifically concerns power: it is a vertical bridge across asymmetrical power and resources.

Thus, all of these conceptual strands can be drawn together into one conceptual map of social capital, in which there are 3 levels – the micro, meso and macro – and for each level there is a 3×3 grid which has on each side respectively the types of social capital (bonding, bridging and linking) as well as the basic elements of social capital (networks, norms and sanctions).

Empirically, it is quite difficult to measure social capital. However, a very simple, reliable and valid measure of social capital is the extent to which most people in a given community, region or nation trust each other. (Other measures or indicators can include civic engagement and membership of associations.)

Having built a picture of what social capital is, there is a significant body of evidence that suggests social capital has a causal effect on a range of policy areas. A brief summary of some of the most interesting of these effects will follow in the next post.

Quotation of the week

Part a:

The more we excuse ourselves from our common obligations, escaping into separate identities and a self-serving culture of blame and excuses to rid ourselves of the inconvenient needs to others, the more we weaken all kinds of subtle common goods on which we all rely.

Part b:

People have been using their wealth and loosened social, economic and moral constraints to rid themselves of the potential “inconveniences of others” in all walks of life.

– From Social Capital, by David Halpern.