The concept of social capital has received a lot of attention in the social sciences in the last few years. It has come to be seen as an important factor in promoting socio-economic development. Despite the diversity of definitions available and the lack of clarity surrounding the concept, it is claimed that the level of trust, and the presence of the norms and networks that constitute social capital play an important role in enhancing economic efficiency and promoting government effectiveness. These claims, however, need to be properly qualified, as the nature and scope of social capital is much more ambiguous than is often suggested. High stocks of social capital can stifle development efforts in close-knit communities, and can be used to achieve objectives that may have negative effects on the wider community. More generally, the attempt to subsume a theory of institutions and a theory of group behaviour under the unifying label of social capital may not be very enlightening. Nevertheless, the social capital approach can provide useful insights for the study of group behaviour, related to the importance of looking at the characteristics of cooperation within groups and to state-society relations as important factors in determining the outcome of group functioning. Some characteristics of social organisation in Papua New Guinea demonstrate these points quite clearly. The existence in Papua New Guinea of a complex web of reciprocity obligations based mostly on ethnic identity (the wantok system) shows how existing social capital based on trust and cooperation within groups can have both positive and negative overall effects on group functioning. Moreover, the nature and structure of state-society relations, based on the country's colonial history and its institutional framework, influence group behaviour in a way that seems to promote vertical linkages of patronage and reinforce the negative effects of the wantok system.
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