What is Social Capital ?

Social Capital is a concept that aims at emphasizing the importance of social contacts between groups and within groups. It primarily means that social networks have a value associated and that they are not always detrimental in nature as previously thought of.

The concept of social capital also stresses that social networks lead to increased productivity in individuals, teams and organizations. This increased productivity can be both financial and otherwise. This means that social contacts can lead to increase in confidence, fulfillment by fostering positive relationships. The essence being that just like any other capital form (human, physical, financial) social capital is also important and beneficial to the sustenance of society.

The term social capital has been used in varied forms in various disciplines. World Bank, for example, uses it to define societal and economic development. Corporate pundits similarly use it to mean an approach of organisation development. Judson Hanifan championed the use of social capital. He used it in his discussions of rural school community centers. He promoted the importance of social intercourse among people for building goodwill and sympathy among fellow members and to promote cooperation.

Later on Jane Jacobs, Pierre Bourdeiu and James S. Coleman contributed from time to time in the development of the concept. Robert D. Putnam worked extensively later and it was his work that extended the idea of social capital to research and policy making discussions.

Barriers to Creation of Social Capital

There can be a multitude of reasons that can act as barriers to social capital creation or development. These factors vary across geographies and cultures. For example in developing or third world countries social networks remain nucleated around family and identity. There is little or no social capital creation across families and castes. This is on account of the mistrust between two families or strata that is detrimental to the very idea of social capital.

There is a strong body of evidence that goes to suggest that social capital leads societies and individuals to prosperity economically and allows the development to be stable. World Bank believes that social capital when utilized properly can enhance the efficacy and sustainability of projects. This they believe can be achieved through a collaboration of communities’ efforts and its ability to work together. It also promotes greater transparency in the overall system, fosters a better bonding and increases the overall accountability.

Application of Social Capital

The concept of social capital has gained significant ground as a means of enhancing overall quality and effectiveness specially those that involve large scale community action. Many organizations have designed practical constructs to make the idea feasible. World Bank, for example, developed Social Capital Implementation framework (SCIF). This was designed to access how social capital could be made use of in operations.

For social capital to be practically feasible it can be broken down into 5 elements both at practical and operational level. They are

  1. Groups and Networks
  2. Trust and Solidarity
  3. Collective action and Cooperation
  4. Social Cohesion and Inclusion
  5. Information and Communication

These elements are important to the development of social capital and provide guidelines in the area at various levels of operation. By effectively breaking down into these 5 layers, each one can be administered separately and incorporated into operations.


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