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Social Capital and Community Governance

  • Samuel Bowles
  • Herbert Gintis

Social capital generally refers to trust, concern for one's associates, a willingness to live by the norms of one's community and to punish those who do not. While essential to good governance, these behaviors and dispositions appear to conflict with the fundamental behavioral assumptions of economics whose archetypal individual -- Homo economicus -- is entirely self-regarding. We regard these behaviors and dispositions as aspects of what we term community governance. We suggest that (i) community governance addresses some common market and state failures but typically relies on insider-outsider distinctions that may be morally repugnant; (ii) the individual motivations supporting community governance are not captured by either the conventional self-interested preferences of Homo economicus or by unconditional altruism towards one's fellow community members; (iii) well-designed institutions make communities, markets and states complements, not substitutes; (iv) with poorly designed institutions, markets and states can crowd out community governance; (v) some distributions of property rights are better than others at fostering community governance and assuring complementarity among communities, states and markets; and (vi) far from representing holdovers from a premodern era, the small scale local interactions that characterize communities are likely to increase in importance as the economic problems that community governance handles relatively well become more important.

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Paper provided by Santa Fe Institute in its series Working Papers with number 01-01-003.

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Date of creation: Jan 2001
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Handle: RePEc:wop:safiwp:01-01-003
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Web page: http://www.santafe.edu/sfi/publications/working-papers.html

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  20. Joseph Henrich & Robert Boyd & Samuel Bowles & Colin Camerer & Ernst Fehr & Herbert Gintis & Richard McElreath, 2001. "Cooperation, Reciprocity and Punishment in Fifteen Small-scale Societies," Working Papers 01-01-007, Santa Fe Institute.
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