The definition of social capital is significantly contested but in its initial and most accepted definition, it was referred to as "the advantages and opportunities accruing to people through membership in certain communities" (Bourdieu, 1985). Coleman (1990) develops the definition by describing social capital as a resource of individuals that emerges from social ties.
Attaining a single "true" measure for social capital is not possible. The first reason for this is, as discussed, that the definition of social capital is contested and multidimensional, with various levels and units of analysis. Secondly, measuring the components of naturally ambiguous concepts such as "trust", "community" and "network" is subsequently difficult. Finally, there are not many surveys that were purposely designed to measure "social capital" (a fairly new concept). This means that modern researchers have to gather indexes from a wide range of approximate items (World Bank, 2011). For example, volunteering hours, voting patterns, measures of trust in government and memberships in civic organisations. New surveys created will hopefully introduce more direct and accurate indicators.
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It may be difficult to measure social capital, however several studies have identified useful proxies and indicators for social capital, using numerous types and amalgamations of qualitative, comparative and quantitative research strategies. These research methodologies commonly focus on levels of trust, membership and networks. Therefore, when measuring social capital the proxies and indicators are measured to grasp an understanding for the level of social capital. Hence, as Cavaye (2004) argues, the challenge for social capital research is to develop consistent indicators that can allow conclusions to be drawn across local, state and national frameworks.
Quantitative studies include Knack and Keefer (1996) who adopted indicators of trust and civic norms. These were taken from the World Values Survey for a sampling size of 29 market economies. These indicators were used as proxies for the strength of associations within society. This was done to test two different indications of the effects of social capital on economic development.
In rural Tanzania, Narayan and Pritchett (1997) created a measure of social capital. In establishing this measure they used data from the Tanzania Social Capital and Poverty Survey (SCPS). This is a large-scale survey and asks the population questions such as, the nature and extent of their associational behaviour, and their trust in numerous individuals and institutions.
Comparative studies include Putnam (1993), who when comparing north and south Italy analysed social capital in the form of the degree of civic engagement, as measured by affiliation to football clubs, newspaper readership, voter turnout and confidence in public institutions. He also carried out a study on the United States (Putnam 1995) using a similar strategy. He combined data from sources of both the academic and commercial world to illustrate a long-term decline of social capital in the US. Putnam validates data from a number of sources against a very reliable survey of American social life, the General Social Survey.
Qualitative studies were done by Stewart-Weeks and Richardson (1998), who provided an example of the way in which the density of networks can be measured. The study investigated various aspects of networks in which the population were involved in, including network density. Having detailed groups and associations they engaged in, the population were asked to give a description of the characteristics of the networks where this participation took place, through a series of questions.
Another indirect measure comes from data on the indicator of organised altruism. Putman (2001) argues that altruism should not be included in the definition of social capital, nevertheless it is a very strong predictor of social connectedness. That is, the people who donate blood, volunteer and give money to charity are people who are more socially connected. The most efficient predictor of philanthropy, for example, is not how wealthy you are, but how many clubs you participate in or how frequently you attend church. There is a very strong relationship between social connectedness and altruism. Therefore, social capital could indirectly be measured through the analysis of philanthropy, volunteering or blood-giving over time.
Social capital measurement is substantially complicated because social capital research has repeatedly depended on measures of the outcomes of social capital as indicators of social capital itself. For example, a measure of a norm of trust is different from behavioural outcomes of that norm. These indicators used in measuring social capital can be classified into 'proximal' and 'distal' indicators. 'Proximal' indicators of social capital are "outcomes of social capital related to its core components of networks, trust and reciprocity" (Stone 2001, pp.11). An example of a proximal indicators is the use of civic participation as an indicator of social networks. This is present in Putnam's (1995) study of civic decline in the US, which membership of formal associations and groups were the key concepts.
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'Distal' indicators are said to be "outcomes of social capital which are indirectly related to its key features" (Stone 2001, pp.11). Examples of distal indicators include: Knack and Keefer's (1996) economic development; life expectancy; teenage pregnancy; crime levels; tertiary education attainment; employment and unemployment rates and marital status (Spellerberg 1997, pp. 43-44).
Proximal and distal indicators play the main role in social capital research, specifically in studies that rely on secondary analyses, where existing data is scarce. Stone (2001) argues that this variety, use and misuse of indicators in social capital studies has led to significant mystification about what social capital is, as distinct from its outcomes, and what the relationship between social capital and its outcomes is. However, I believe that these indicators are still tremendously useful in the study of social capital and for grasping an understanding of the concept as many studies have shown.
Social capital has become increasingly important to the state and there are a number of reasons why the state would be interested in promoting social capital. Research has shown that high levels of social capital are related to better social order; stronger civil society; better educational achievement; less crime; better health; less tax evasion; aiding problem solving and boosting the economic development.
Putman (2001) argues that social capital can be another way of increasing social order. He argues that this creation of social order through social capital is brought about by the informal contract enforcement that social capital generates. Putman (2001) argues that this relationship is explained by the game theory. He uses the example of neighbours and the raking of leaves. If two neighbours have trust in each other and share a network of reciprocity then they don't actually have to have a contract with each other; both neighbours are going to rake the leaves. They both do it without a contract and they don't sue each other if one of them doesn't rake their leaves. Therefore, if social capital is declining less people are going to be informally contracted, other forms of contract enforcement will increase and more lawyers will be needed. Putman (2001) looked at the relative share of lawyers per person in the US and how this changed through time. He discovered that the number of lawyers per 10,000 people remained steady over the first seventy years of the 20th century. However, this number then started to escalate at the same time as social capital started to decline.
In Australia, social policy has led to the attempt of reintegrating the fraction of the population that is marginalised from the rewards of the economic system into the larger community. This is said to be done through increasing social capital and therefore social capital can be seen to be significant in reintegrating those marginalized in society. However, according to Onyx and Bullen (2000), while the explicit aim of this policy is inclusion, its effects can be exclusionary. Therefore, social capital can be seen to have a significant role in the reintegration of marginalized communities, however must be done carefully.
Research has shown that high educational performance has been associated with high levels of social capital. Putman (2001) found that the relationship between educational performance and social capital is two times stronger than spending on schools and teacher-pupil ratios. He also identified a very strong positive correlation between the welfare of children and social capital. Henceforth, providing more evidence of why it is important for the state to promote social capital.
Social capital has been found to be a very efficient predictor for crime. This is not only evident at state level, but is also at community and neighbourhood levels. Putman (2001) argues that the strongest indicator of high murder rates is low levels of social capital; stronger than poverty and any other plausible measures. However, Sutherland et al. (1978) argue that high levels of social capital can also increase crime. Sutherland et al. (1978) claim that criminal behaviour is learnt through interaction with others or associations with others. Thus, if interactions and associations are high then social capital is high and therefore criminal behaviour will also be high. However, Sutherland et al. (1978) do stress that this only apparent in broken communities.
The importance of promoting social capital to the state can also be illustrated by the relationship between tax evasion and social capital. Putman (2001) highlights that in the US interstate differences in tax evasion, measured by the IRS (Internal Revenue Service), has a strong correlation with variance in social capital. Putman (2001, p.12) states that, "No other variable does as well at explaining why states differ in tax evasion." Areas with strong social networks, engagement and reciprocity are less likely to evade tax and a more likely to comply with the law because they believe others will too. Therefore, the government by promoting social capital will decrease rates of tax evasion.
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Research has provided evidence that suggests the presence of social capital through social networks and communities has a significant benefit on health. Lin (1999) discovered that social capital affects health risk to the extent that individuals who are part of a network or community rich in social capital have resources that aid in improving their health. Lin (1999) uses the example of a cancer patient, where the patient may receive information, money, or moral support that is needed to tolerate treatment and recover. As discussed earlier, social capital also encourages membership and social trust. Bolin et al. (2003) argue that these two factors can discourage individuals from undertaking in risky health behaviours such as smoking and binge drinking. However, one would argue that high levels of social capital can also encourage binge drinking with 'pub culture' having an important role. Furthermore, in 2008 Aslund et al. (2010) carried out a survey on 7757 13-18 year old students in Sweden. This survey showed that low social capital has a strong affinity with higher rates of depression, musculoskeletal pain and psychosomatic issues.
Others have stressed the significance of social capital for problem solving. Sirianni and Friedland (1997) argue that social capital supplies problem solvers with a huge advantage through its ability to bring people's knowledge together. Hutton (2012) reiterates the advantage of social capital for problem solving by arguing that social capital is needed in "a mean world growing still meaner [that] fosters division and mutual suspicion" as it can bring people together to "rally around a common vision of the future" (Hutton 2012).
Most significantly for the state, promoting social capital can increase economic development. Lyon (2000) describes the importance of social capital in shaping regional development. However, Knack and Keefer (1996), Putman (1993) as well as Zak and Knack (1999) have shown that social capital is positively correlated with the economic development of the state as a whole. Additionally, Fukuyama (2001) and Kenworthy (1997) illustrated that social capital is crucial in the efficient functioning of modern economies. Social capital is also central, on a micro scale, to the performance of businesses within the state and "the power of social capital in achieving personal and business success" (Baker 2000, p.9) is apparent. This benefit that high levels of social capital bring on a micro scale also benefits the economic development of the state as a whole. These high levels of social capital promote development partly because social capital brings synergy, which is a catalyst for development. As discussed earlier, social capital also aids in bringing people together and creating a shared vision. This in itself also influences development. Hence, it is important for the state to promote social capital as this can encourage economic development.
The ways in which the state may promote social capital vary and focusing on indicators and proxies of social capital is generally how it is achieved. However, scale, how the citizens react and what role the government play are also very significant.
The Lowndes and Wilson's (2001) theory argues that the best way for the state to increase social capital is to develop indirect social capital promotion. Taylor (2000) and Onyx and Bullen (2001) support this theory by arguing that social capital building strategies enforced by the state are not effective because of distant ties, therefore social capital promotion must take place through outsourcing by government. This point is further reiterated by Warner (2001), who postulates that the state is better placed to promote social capital through community based mechanisms. However, this strategy of promoting social capital would still require the active and willing engagement of citizens within a participative community.
Warner (2001) argues that there are three concepts that must be focused on when trying to successfully promote social capital: autonomy, linkage, and returns on investment. In promoting social capital the government must share autonomy with citizens. Crocker et al., (1998) argue that this can be done by adopting the roles of catalyst, convener and facilitator and losing the role of controller, regulator and provider. This will increase autonomy and improve service delivery, although public capital and civic infrastructure is also needed. Linkage is also important. Warner (2001) argues that 'horizontal ties' ensure wide community involvement and 'vertical (bridging) ties' allow for system change (access to resources, policy change). Investments in individual social capital are most likely to produce direct returns. Returns on investments on social capital require generalized reciprocity and democratic responsive government. Balanced autonomy and strong horizontal linkage reinforce generalized reciprocity and democratic governance. Thus areas with higher levels of horizontal social capital will provide more environments for additional social capital investment.
One way the state can successfully promote social capital, Leeson (2008) argues, is to increase homogeneity, a key concept in social capital. One example of this type of intervention is Quebec's language laws. In Quebec the language laws implemented make French the official language and also mean that all official documents and advertising have to be in French, as well as all store signs have to contain twice as much French as English. Further examples of techniques to impose homogeneity include public education systems and the recent efforts in Iraq and Afghanistan to establish centralized political, economic, and social institutions.
Leeson (2008) provides other ways of promoting social capital. One of which is to impose standards or create centralized institutions such as courts and political institutions. Strategies aimed at utilizing the structure of social capital are not limited to local and national initiatives. Attempts at building social capital can also be international in nature, for example, the World Bank's concentration on nursing social capital in developing countries, or military interventions in fragile and failed states where foreign governments attempt to set up central liberal democratic and social orders.
In conclusion, measuring social capital is tremendously difficult for a number of reasons and it is only through the measurement of its proxies and indicators that it can be done. The ways in which the measurement of these indicators and proxies varies. However, this does not mean that these studies on the indicators and proxies do not provide a good understanding of social capital and they provide strong evidence that justifies the importance for the state in promoting social capital. It is important for the state to promote social capital as high levels of social capital are related to better social order; stronger civil society; better educational achievement; less crime; better health; less tax evasion; aiding problem solving and boosting the economic development. Finally, to successfully promote social capital the state must focus on scale, how the citizens react and what role the government play.