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Making Capitalism Work: Social Capital and Economic Growth in Italy, 1970-1995

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  • Thomas P. Lyon

    (Indiana University)

Abstract

Using data on the 20 Italian regions for the period 1970-1995, I examine whether the presence of social capital, as reflected in a number of different measures collected by Putnam (1993), affects economic productivity. I find three types of effects. First, social capital, when treated as an input to regional production, has a positive and significant effect in the South, but a much weaker effect in the North. Second, some forms of social capital can significantly increase regions’ propensities to make physical capital investments; however, dense networks of association reduce capital investment in both the North and South. Instrumental variables estimates show that social capital affects growth both directly and through affecting investment in physical capital. Third, social capital contributes positively to the rate of total factor productivity growth in the Italian regions.

Suggested Citation

  • Thomas P. Lyon, 2005. "Making Capitalism Work: Social Capital and Economic Growth in Italy, 1970-1995," Working Papers 2005.70, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2005.70
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    References listed on IDEAS

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    Cited by:

    1. Emanuele Felice, 2013. "Regional income inequality in Italy in the long run (1871–2001). Patterns and determinants," UHE Working papers 2013_08, Universitat Autònoma de Barcelona, Departament d'Economia i Història Econòmica, Unitat d'Història Econòmica.
    2. Ernest Miguelez & Rosina Moreno & Manuel Artis, 2011. "Does Social Capital Reinforce Technological Inputs in the Creation of Knowledge? Evidence from the Spanish Regions," Regional Studies, Taylor & Francis Journals, vol. 45(8), pages 1019-1038.
    3. Felice, Emanuele, 2009. "Regional value added in Italy (1891-2001) : estimates, elaborations," IFCS - Working Papers in Economic History.WH wp09-08, Universidad Carlos III de Madrid. Instituto Figuerola.

    More about this item

    Keywords

    Social capital; Growth; Investment; Italy;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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