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Social Capital, Social Norms and the New Institutional Economics

In: Handbook of New Institutional Economics

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  • Philip Keefer
  • Stephen Knack

Abstract

Douglass North (1990) describes institutions as the rules of the game that set limits on human behavior, now a universally-accepted definition. North and others especially underline the crucial role of informal social norms. They predict that, like all rules of the game, social norms should affect the economic prosperity enjoyed by individuals and countries—that they should have a crucial impact, for example, on economic and political development. In fact, substantial evidence demonstrates that social norms prescribing cooperative or trustworthy behavior have a significant impact on whether societies can overcome obstacles to contracting and collective action that would otherwise hinder their development. Much of this evidence comes from outside the new institutional economics, emerging instead from scholarly research in the field of “social capital.” A review of this evidence, and its implications for our understanding of the role of social norms and institutions, is therefore the focus of this chapter.
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Suggested Citation

  • Philip Keefer & Stephen Knack, 2005. "Social Capital, Social Norms and the New Institutional Economics," Springer Books, in: Claude Menard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, chapter 27, pages 701-725, Springer.
  • Handle: RePEc:spr:sprchp:978-0-387-25092-2_28
    DOI: 10.1007/0-387-25092-1_28
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    More about this item

    Keywords

    Social Capital; Social Norm; Formal Institution; Collective Action Problem; Informal Norm;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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