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Social Capital: Its Conceptual and Methodological Aspects, and Its Connection to Local Development

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Essay title: Social Capital: Its Conceptual and Methodological Aspects, and Its Connection to Local Development


Social capital is one of the concepts which have attracted the attention of scholars all over the globe. This paper dealt with the theoretical understandings that could assist in the identification of the various forms of social capital and how it is linked to local development in this era. Three different features of social capital are crucial in so far as the linkage to local development is concern. Social capital has been considered in terms of social relations and social networks and most importantly, �trust’ has been a prime mover of the concept. The paper shows how networks and interaction between actors brings about development at the local level despite some few identified drawbacks.

Word count 114

Table of content

Abstract ii

Introduction 1

The definition of social capital. 2

The deference between social capital and human capital 3

Obligations and expectations 3

Key features of social capital 4

The importance of Social Capital to Local Development. 6

Problems of collective action 9

Negative effect of social capital to local development. 10

Conclusion 10

References 12

Word count 3277

Social Capital: Its conceptual and Methodological aspects, and its connection to Local Development.


The importance of social capital for local development cannot be over emphasized; this is evident in a number of studies in recent time. Kilkenny et al. (1999) explored the relationships between reciprocated community support and development of small towns and small businesses in Iowa. Social capital and communities has also been discussed by Flora (1998). The development of social capital in rural areas in Russia under the market economy was also examined by Pantoja (2000). Sobels et al., (2001) looked at the importance of social capital for non-governmental networks etc. there is therefore no doubt about the linkage and importance of social capital to local development.

The concept of social is as old as the inception of the development of economic sociology, the concept can be found in the work of Max Weber, The Protestant Sects and the Spirit of Capitalism . During his trip to the United States, Weber mentioned an event of the Baptist ceremony. During the ceremony the people had to enter a pond of icy water in their cloth. Member ship of the Baptist sect showed ones moral quality for support to gain access to credit or reputation to start and an economic venture. This support might not necessarily come from members of the same sect but membership could be used as a guarantee for his moral standards in business.

In theoretical terms, Weber insisted that the protestant sect was very important in the growth of the American economy. These sects showed both ethical and moral quality required by external actors for successful business ventures. Even though revolving around a network of non economic human relations, Weber’s work included key features necessary to define social capital.

The social net works ensured trust and the circulation of information which eventually led to economic gains by fostering exchange of credit and connections between firms and between firms and final consumers. Information and trust is currently used to curtail fraudulent acts in businesses and to transmit technical knowledge in highly risky ventures (Tragilia 2001).

It was evidently clear that he did acknowledge the concept of social capital as influencing the establishment of economic activities which ensured development in a given area and emphasized the importance of the relations of social networks in economic activities.

The definition of social capital.

Even though Coleman introduced and analyzed the term “Social Capital”, he acknowledged Glenn C. Loury (1977) for the application of the term in economics and identifying the social resources needed for the development of human capital . Coleman (1990), in describing Loury’s work, “social

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