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Social Capital and Economic Development


  • Torsvik, G.


This paper attempts to delineate the mechanisms that link social capital and economic development. I show that social capital can produce two kinds of trust, both of which can reduce transaction costs. It is important to keep these two sources of trust apart, since development policies utilizing social capital have different impacts, depending on the basis of trust.

Suggested Citation

  • Torsvik, G., 2000. "Social Capital and Economic Development," Norway; Department of Economics, University of Bergen 216, Department of Economics, University of Bergen.
  • Handle: RePEc:fth:bereco:216

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    References listed on IDEAS

    1. Hanemann, W Michael, 1984. "Discrete-Continuous Models of Consumer Demand," Econometrica, Econometric Society, vol. 52(3), pages 541-561, May.
    2. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
    3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
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    Cited by:

    1. Forte, Anabel & Peiró-Palomino, Jesús & Tortosa-Ausina, Emili, 2015. "Does social capital matter for European regional growth?," European Economic Review, Elsevier, vol. 77(C), pages 47-64.
    2. Peiró-Palomino, Jesús & Tortosa-Ausina, Emili, 2013. "Can trust effects on development be generalized? A response by quantile," European Journal of Political Economy, Elsevier, vol. 32(C), pages 377-390.
    3. Fabio Sabatini, 2006. "The Empirics of Social Capital and Economic Development: A Critical Perspective," Working Papers 2006.15, Fondazione Eni Enrico Mattei.
    4. Fabio Sabatini, 2006. "Social Capital and Labour Productivity in Italy," Working Papers 2006.30, Fondazione Eni Enrico Mattei.
    5. Chau-kiu Cheung & Raymond Chan, 2010. "Social Capital as Exchange: Its Contribution to Morale," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 96(2), pages 205-227, April.
    6. Sabatini, Fabio, 2005. "Measuring Social Capital in Italy: An Exploratory Analysis," AICCON Working Papers 12-2005, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    7. Fabio Sabatini, 2005. "Social capital as social networks. A new framework for measurement," Working Papers 83, University of Rome La Sapienza, Department of Public Economics.
    8. Fabio, Sabatini, 2007. "Social capital, social enterprises, public spending and well-being in Italy
      [Capitale sociale, imprese sociali, spesa pubblica e benessere sociale in Italia]
      ," MPRA Paper 2365, University Library of Munich, Germany.
    9. Le, Anh Tuan, 2010. "Change in Social Capital – a Case Study of Collective Rice Farming Practice in the Mekong Delta, Vietnam," MPRA Paper 25552, University Library of Munich, Germany.
    10. Fabio Sabatini, 2005. "Measuring Social Capital in Italy. An Exploratory Analysis," Development and Comp Systems 0504003, EconWPA.
    11. Fabio Sabatini, 2004. "Il rapporto tra Economia e Società nella ricerca sul capitale sociale. Un tentativo di impostazione contabile e una classificazione “funzionale” della letteratura," Others 0411005, EconWPA.
    12. Fabio Sabatini, 2007. "Mapping Italy’s social capital," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
    13. Fabio Sabatini, 2006. "Social Capital, Public Spending and the Quality of Economic Development: The Case of Italy," Working Papers 2006.14, Fondazione Eni Enrico Mattei.
    14. Cheung, Chau-kiu & Lam, Ching-man & Ngai, Steven Sek-yum, 2008. "Help from the parent-teacher association to parenting efficacy: Beyond social status and informal social capital," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(3), pages 1134-1152, June.
    15. Wiig, Henrik, 2003. "The Productivity of Social Capital - An Econometric Analysis of 49 Peruvian Highland Communities," Memorandum 27/2003, Oslo University, Department of Economics.
    16. Cene Bavec, 2007. "Interdependence Between Social Values and National Performance Indicators: The Case of the Enlarged European Union," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 5(3), pages 213-228.
    17. Stuart, Guy, 2006. "Caste Embeddedness and Microfinance: Savings and Credit Cooperatives in Andhra Pradesh, India," Working Paper Series rwp06-037, Harvard University, John F. Kennedy School of Government.
    18. Soogwan Doh & Connie McNeely, 2012. "A multi-dimensional perspective on social capital and economic development: an exploratory analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 821-843, December.
    19. Ivan Rimac & Aleksandar Štulhofer, 2004. "Socio-cultural values, economic development and political stability as correlates of trust in the European Union," Chapters in books,in: Katarina Ott (ed.), Croatian Accession to the European Union: Institutional Challenges, volume 2, chapter 12, pages 301-326 Institute of Public Finance.
    20. Fabio Sabatini, 2005. "Social Capital, Public Spending and the Quality of Economic Development," Others 0506014, EconWPA.
    21. Cheung, Chau-kiu & Chan, Raymond Kwok-hong, 2008. "Facilitating achievement by social capital in Japan," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2261-2277, December.
    22. Petri Ruuskanen & Tomi Kankainen, 2011. "Dynamic capabilities in small and medium manufacturing firms in rural Finland – role of social capital?," ERSA conference papers ersa11p806, European Regional Science Association.
    23. Sjoerd Beugelsdijk & Sjak Smulders, 2003. "Bridging and Bonding Social Capital: which type is good for economic growth?," ERSA conference papers ersa03p517, European Regional Science Association.
    24. Fabio Sabatini, 2005. "Social capital as social networks. A new framework for measurement," Others 0506013, EconWPA.

    More about this item



    JEL classification:

    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development


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