IDEAS home Printed from https://ideas.repec.org/p/mtk/febawb/42.html
   My bibliography  Save this paper

The Effect Of Macro-Level Social Capital On Sustainable Economic Development

Author

Listed:
  • Helje Kaldaru
  • Eve Parts

Abstract

The concept of social capital as an important determinant of economic development is attracting increasing attention among development economists. The present paper analyses the impact of macro-level social capital on economic development in 34 European countries. Macro-level social capital comprises different aspects of institutional quality and is closely related to the income distribution and social cohesion. We used principal component analysis to group initially selected social determinants of economic development into three components (human and social capital, income equality, and redistribution), which altogether described 64.4% of the variation of the initial variables. Following regression analysis proved that all these components have a positive effect on economic development, measured by human development index.

Suggested Citation

  • Helje Kaldaru & Eve Parts, 2005. "The Effect Of Macro-Level Social Capital On Sustainable Economic Development," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 42, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  • Handle: RePEc:mtk:febawb:42
    as

    Download full text from publisher

    File URL: http://www.mtk.ut.ee/sites/default/files/mtk/RePEc/mtk/febpdf/febawb42.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio & Wacziarg, Romain, 2003. "Fractionalization," Journal of Economic Growth, Springer, vol. 8(2), pages 155-194, June.
    3. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    4. John F. Helliwell & Robert D. Putnam, 1995. "Economic Growth and Social Capital in Italy," Eastern Economic Journal, Eastern Economic Association, vol. 21(3), pages 295-307, Summer.
    5. Rodrik, Dani, 1999. "Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December.
    6. John F. Helliwell, 1996. "Economic Growth and Social Capital in Asia," NBER Working Papers 5470, National Bureau of Economic Research, Inc.
    7. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
    8. 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.
    9. John F. O. Bilson, 1982. "Civil Liberty‐An Econometric Investigation," Kyklos, Wiley Blackwell, vol. 35(1), pages 94-114, February.
    10. Helliwell, John F., 1994. "Empirical Linkages Between Democracy and Economic Growth," British Journal of Political Science, Cambridge University Press, vol. 24(2), pages 225-248, April.
    11. Rodrik, Dani, 1997. "TFPG Controversies, Institutions, and Economic Performance in East Asia," CEPR Discussion Papers 1587, C.E.P.R. Discussion Papers.
    12. Barro, Robert J, 1996. "Democracy and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 1-27, March.
    13. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    14. Anil Rupasingha & Stephan J. Goetz & David Freshwater, 2002. "Social and institutional factors as determinants of economic growth: Evidence from the United States counties," Review of Economic Design, Springer;Society for Economic Design, vol. 81(2), pages 139-155, April.
    15. Scully, Gerald W, 1988. "The Institutional Framework and Economic Development," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 652-662, June.
    16. Beugelsdijk, Sjoerd & van Schaik, Ton, 2005. "Social capital and growth in European regions: an empirical test," European Journal of Political Economy, Elsevier, vol. 21(2), pages 301-324, June.
    17. Kormendi, Roger C. & Meguire, Philip G., 1985. "Macroeconomic determinants of growth: Cross-country evidence," Journal of Monetary Economics, Elsevier, vol. 16(2), pages 141-163, September.
    18. World Bank, 2004. "Responsible Growth for the New Millennium : Integrating Society, Ecology and the Economy," World Bank Publications, The World Bank, number 14853, December.
    19. Paul Collier, 2000. "Ethnicity, Politics and Economic Performance," Economics and Politics, Wiley Blackwell, vol. 12(3), pages 225-245, November.
    20. A. Chong & C. Calderón, 2000. "Causality and Feedback Between Institutional Measures and Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 69-81, March.
    21. Gerald M. Meier, 2002. "Culture, Social Capital, and Management in a Developing Economy," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 5(1), pages 1-15, May.
    22. Easterly, William, 2001. "The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-335, December.
    23. Knack, Stephen, 2000. "Social capital and the quality of Government : evidence from the U.S. States," Policy Research Working Paper Series 2504, The World Bank.
    24. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
    25. Hjerppe, Reino, 1998. "Social Capital and Economic Growth," Discussion Papers 183, VATT Institute for Economic Research.
    26. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Helje Kaldaru & Eve Parts, 2008. "Social and institutional factors of economic development: evidence from Europe," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 8(1), pages 29-51, October.
    2. Breuer, Janice Boucher & McDermott, John, 2013. "Economic depression in the world," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 227-242.
    3. Johannes Fedderke & John Luiz & Raphael Kadt, 2008. "Using fractionalization indexes: deriving methodological principles for growth studies from time series evidence," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 85(2), pages 257-278, January.
    4. Ignacio Amate-Fortes & Almudena Guarnido-Rueda & Agustin Molina-Morales, 2017. "Economic and Social Determinants of Human Development: A New Perspective," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(2), pages 561-577, September.
    5. Oguzhan Dincer & Eric Uslaner, 2010. "Trust and growth," Public Choice, Springer, vol. 142(1), pages 59-67, January.
    6. Siddiqui, Danish Ahmed & Ahmed, Qazi Masood, 2013. "The effect of institutions on economic growth: A global analysis based on GMM dynamic panel estimation," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 18-33.
    7. Knack, Stephen, 2002. "Social capital, growth and poverty: a survey of cross-country evidence," MPRA Paper 24893, University Library of Munich, Germany, revised 0200.
    8. Knack, Stephen, 2002. "Governance and growth: measurement and evidence," MPRA Paper 28050, University Library of Munich, Germany.
    9. Artelaris, Panagiotis & Arvanitidis, Paschalis & Petrakos, George, 2007. "Explaining Knowledge-Based Economic Dynamism in a Global Scale," Papers DYNREG05, Economic and Social Research Institute (ESRI).
    10. Johannes Fedderke, 2001. "Growth and institutions," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(6), pages 645-670.
    11. Fiorillo, Damiano, 2005. "Capitale Sociale Civile: una nota sui concetti e sulla evidenza empirica macro [Civil Social Capital: a note on the concepts and on the macro empirical evidence]," MPRA Paper 3822, University Library of Munich, Germany.
    12. Sangnier, Marc, 2013. "Does trust favor macroeconomic stability?," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 653-668.
    13. Nicolas Sirven, 2001. "Capital social et développement : quelques éléments d'analyse," Documents de travail 57, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
    14. Marco Ferroni & Mercedes Mateo Díaz & J. Mark Payne, 2007. "Development under Conditions of Inequality and Distrust: An Exploration of the Role of Social Capital and Social Cohesion in Latin America," IDB Publications (Working Papers) 53818, Inter-American Development Bank.
    15. R. Grafton & Tom Kompas & P. Owen, 2007. "Bridging the barriers: knowledge connections, productivity and capital accumulation," Journal of Productivity Analysis, Springer, vol. 28(3), pages 219-231, December.
    16. Chen, Baizhu & Feng, Yi, 1996. "Some political determinants of economic growth: Theory and empirical implications," European Journal of Political Economy, Elsevier, vol. 12(4), pages 609-627, December.
    17. Ilkhom SHARIPOV, 2016. "ECONOMIC GROWTH IN THE EU’S EaP COUNTRIES: DETERMINANTS AND PROSPECTS," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 3, pages 169-187.
    18. Arvanitidis, Paschalis & Petrakos, George & Pavleas, Sotiris, 2007. "Determinants of economic growth: the experts’ view," Papers DYNREG20, Economic and Social Research Institute (ESRI).
    19. M. Menegatti, 2002. "Crescita e istituzioni: alcune schede riassuntive," Economics Department Working Papers 2002-EP01, Department of Economics, Parma University (Italy).
    20. Baliamoune-Lutz, Mina, 2011. "Trust-based social capital, institutions, and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 335-346, August.

    More about this item

    Keywords

    social capital; economic development; sustainability; European economies;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mtk:febawb:42. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/febutee.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anne Reino (email available below). General contact details of provider: https://edirc.repec.org/data/febutee.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.