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The Fragility of Social Capital

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  • Fabio Sabatini

    (Università di Siena)

  • Angelo Antoci

    (Università di Sassari)

  • Mauro Sodini

    (Università di Pisa)

Abstract

This paper addresses two hot topics of the contemporary debate, social capital and economic growth. Our theoretical analysis sheds light on decisive but so far neglected issues: how does social capital accumulate over time? Which is the relationship between social capital, technical progress and economic growth in the long run? The analysis shows that the economy may be attracted by alternative steady states, depending on the initial social capital endowments and cultural exogenous parameters representing the relevance of social interaction and trust in well-being and production. When material consumption and relational goods are substitutable, the choice to devote more and more time to private activities may lead the economy to a “social poverty trap”, where the cooling of human relations causes a progressive destruction of the entire stock of social capital. In this case, the relationship of social capital with technical progress is described by an inverted U-shaped curve. However, the possibility exists for the economy to follow a virtuous trajectory where the stock of social capital endogenously and unboundedly grows. Such result may follow from a range of particular conditions, under which the economy behaves as if there was no substitutability between relational activities and material consumption.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2009.16.

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Date of creation: Mar 2009
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Handle: RePEc:fem:femwpa:2009.16

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Keywords: Economic Growth; Technical Progress; Social Interactions; Social Capital;

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References

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Cited by:
  1. Mohammad Javad Razmi & Adegbemi Sahar Sherkat Bazzazan, 2012. "A Review of the Effect of Social Capital on Human Development in Iran," International Journal of Economics and Financial Issues, Econjournals, vol. 2(4), pages 448-459.
  2. Stanislaw Walukiewicz, 2011. "Measuring Social Capital and Proximimty," ERSA conference papers ersa10p309, European Regional Science Association.
  3. Angelo Antoci & Mauro Sodini & Luca Zarri, 2012. "Relational Consumption and Nonlinear Dynamics in an Overlapping Generations Model," Working Papers 13/2012, University of Verona, Department of Economics.
  4. Fabio Sabatini, 2007. "Mapping Italy’s social capital," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
  5. Stanislaw Walukiewicz & Aneta Wiktorzak, 2011. "Social Capital in Education," ERSA conference papers ersa10p632, European Regional Science Association.

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