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Does Social Capital Have an Economic Payoff? A Cross-Country Investigation

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  • Stephen Knack
  • Philip Keefer

Abstract

This paper presents evidence that "social capital" matters for measurable economic performance, using indicators of trust and civic norms from the World Values Surveys for a sample of 29 market economies. Memberships in formal groups—Putnam's measure of social capital—is not associated with trust or with improved economic performance. We find trust and civic norms are stronger in nations with higher and more equal incomes, with institutions that restrain predatory actions of chief executives, and with better-educated and ethnically homogeneous populations.

Suggested Citation

  • Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    • Handle: RePEc:oup:qjecon:v:112:y:1997:i:4:p:1251-1288.
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    File URL: http://hdl.handle.net/10.1162/003355300555475
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