Social capital

Abstract

Sustainable development has been defined as a process whereby future generations receive as much capital per capita as--or more than--the current generation has available (Serageldin). Traditionally, this has included natural capital, physical or produced capital, and human capital. Together they constitute the wealth of nations and form the basis of economic development and growth. In this process the composition of capital changes. Some natural capital will be depleted and transformed into physical capital. The latter will depreciate, and we expect technology to yield a more efficient replacement. This century has seen a massive accumulation of human capital. It has now become recognized that these three types of capital determine only partially the process of economic growth because they overlook the way in which the economic actors interact and organize themselves to generate growth and development. The missing link is social capital. There is, however, no consensus about which aspects of interaction ad organization merit the label of social capital, nor in fact about the validity of the term capital to describe this. Least progress has been made in measuring social capital and in determining empirically its contribution to economic growth and development. This report addresses each of these issues in turn.