The Effect of Social Capital on Economic and Political Development

Document Type : Research Article

Authors

1 Researcher at Shahr Danesh Legal Research Institute, Tehran, Iran

2 Assistant Professor, Department of Sociology, Faculty of Literature and Human Sciences, Kharazmi University, Tehran, Iran.

Abstract

Abstract
The main question of this research is about the optimal level of social capital in a society. In this regard, considering utility as development and relying on secondary analysis using different databases (the global database and human development report), we investigate the relationship between social capital, economic development, and political development. This relationship has been clearly approved both theoretically (there are a lot of theories about the relationship between the mentioned variables in the research literature) and experimentally (Pearson correlation test and Partial Pearson correlation test). In the second step, we investigated the level of social capital that is necessary for economic and political development. To answer this question, first the cutoff point of social capital was determined by ROC test, and then, the components of development were compared at each of the cutoff points. According to ANOVA, only high levels of social capital can significantly influence the development components. 
Keywords: Social Capital, Economic Development, Well-being, Rule of Law, Freedom.
 
1. Introduction
Over the past two decades, the term “social capital” has become significantly highlighted in academic literature. Politicians consider this concept as a requisite of democracy. Economists discuss its effect on economic development. Lawyers consider that as a fundamental tool for promoting the rule of law, and sociologists approve its undeniable effect on social cohesion. So, regular and careful investigation of social capital is nowadays one of the research plans in many countries which conduct national or international surveys (OECD measurement of social capital, global social capital survey, social capital in the UK, measuring social capital in Australia, etc.) to control the issue of social capital. 
A review of authentic domestic researches on social capital suggests the undesirable situation of this fundamental factor in the Iranian society. In 2015, the Ministry of interior reported the level of social capital 10.96 (out of 20 scores). According to the social capital report of the Iranian broadcasting organization in 2017, this score decreased by 9.23, and it has reached 8.9 in 2018 (the third social capital report of the Ministry of interior) and 8.96 in 2019 (the second social capital report of the Ministry of interior). 
 
2. The main questions
This research aims to answer two major questions: 
1. Is social capital significantly effective in economic and political development? 
2. If it is so, what is the least necessary level of social capital to influence the mentioned variables? Is a minimum level of social capital sufficient for development?
 
3. Materials and Methods
This research has adopted the approach of secondary analysis (by using different databases) to answer the research questions. 
Economic development was studied in terms of economic quality, living conditions, and market access. Political development was also studied in terms of the rule of law, personal freedom, safety and security. Social capital is also studied in terms of social participation, social trust, and altruism. The data of economic and political development was derived from www.properity.com (it should be noted that this website does not collect the information and it only refers to the relevant resources). The economic indices have been collected from the World Bank, the personal freedom indices have been collected from the Freedom House, health indices have been collected from the WHO, and the rule of law indices have been collected from the Worldwide Governance Indicators. Meanwhile, the data of social capital has been derived from the World Value Survey. 
According to the level of analysis (countries) of the current research, the sampling method was somewhat different from the usual surveys. Due to the importance of the development of the countries, it was tried to select a number of equal proportions for analysis by considering the human development index as the basis of sampling from all categories of this index.
In this way, according to the limitation of international data, it was decided to examine at least 20 countries from each class of human development index (very high, high, medium and low). The final examined sample reached 105 countries.
 
4. Conclusion
To answer the first question, according to Pearson correlation test, the social capital variable has a significant correlation with all economic and political development indicators; it means that this factor affects economic and political development. According to the results of Partial Pearson correlation, the correlation between economic and political development has become less significant by controlling social capital, i.e. a part of the correlation between these two variables depends on social capital. 
The second question is also answered by statistical tests. Based on ROC test, social capital was classified into three classes including the low, medium, and high levels, and the effect of each level was studied on economic-political development. According to ANOVA, only the highest levels of social capital can be effective in economic-political development. So, the social capital scores at the low and medium levels are not so effective in development. In terms of statistics, it can be claimed that there is a nonlinear relationship between social capital and economic-political development. 

Keywords

Main Subjects


- سازمان امور اجتماعی وزارت کشور، (1397). «سنجش سرمایۀ اجتماعی کشور، تهران». به سفارش: مرکز ملی رصد اجتماعی وزارت کشور، مدیر علمی طرح: رضا صفری شالی. 
- سازمان امور اجتماعی وزارت کشور، (1394). «سنجش سرمایۀ اجتماعی کشور». به سفارش: مرکز ملی رصد اجتماعی، مدیر علمی طرح: رضا صفری شالی. 
- مرکز تحقیقات سازمان صدا و سیما، (1396). «سنجش سرمایۀ اجتماعی در کشور، تهران». سازمان صدا و سیمای جمهوری اسلامی ایران، مدیر علمی طرح: فرهاد باباخانی.
- مرکز تحقیقات سازمان صدا و سیما، (1398). «سنجش سرمایۀ اجتماعی در کشور». تهران: سازمان صدا و سیمای جمهوری اسلامی ایران، مدیر علمی طرح، فرهاد باباخانی.
- Broadcasting Research Center of Islamic Republic of Iran. (2018). “Measuring social capital in Iran”. Project Manager, babakhani, F., (In Persian)
- Broadcasting Research Center of Islamic Republic of Iran. (2020). “Measuring social capital in Iran”. Project Manager, babakhani, F. (In Persian)
- Coleman, J. S., (1988). “Social Capital in the Creation of Human Capital”. American Journal of Sociology, 94: S95–S120. https://doi.org/10.1086/228943
- Dahl, F.; Muringani, J. & Rodríguez-Pose, A., (2021). “Social Capital and Economic Growth in the Regions of Europe”. CEPR Discussion Paper. doi.10.1177/0308518X211000059
- Fatton, Robert, Jr., (1995). “Africa in the Age of Democratization: The Civic Limitations of Civil Society”. African Studies Review. 38: 67- 99. doi.org/10.2307/525318
- Finifter, A., (1974). “The Friendship Group as a Protective Environment for Political Deviants”. American Political Science Review, 68: 607-25. https://doi.org/10.2307/1959508
- Forrest, R. & Ade Kearns, A., (2001). “Social Cohesion, Social Capital and the Neighborhood”. Urban Studies, 38, 12: 2125-2143. doi.org/10.1080/00420980120087
- Fukuyama, F., (1999). The Great Disruption: Human Nature and the Reconstitution of Social Order. New York: Free Press.
- Grootaert, C., (1999). “Social capital, household welfare, and poverty in Indonesia”. World Bank Policy Research Working Paper, 2148. https://doi.org/10.1596/1813-9450-2148
- Habermas, J., (1989). “The Structural Trans-formation of the Public Sphere: An Inquiry into a Category of Bourgeois Society”. Cambridge, MA: MIT Press. 
- Marsh, R., (2003). “Social Capital, Guanxi, and the Road to Democracy in Taiwan”. Comparative Sociology, 2(4): 575-604. doi.org/10.1163/156913303322661874
- Marwell, G. & Oliver, P., (1993). The Critical Mass in Collective Action: A Micro- Social Theory. New York: Cambridge University Press.
- Ministry of Interior Social Affairs Organization (2016). “Measuring social capital in Iran”. Commissioned by the National Social Monitoring Center of the Ministry of Interior, Project Manager, Babakhani, F. (in Persian)
- Ministry of Interior Social Affairs Organization, (2019). “Measuring social capital in Iran”. Commissioned by the National Social Monitoring Center of the Ministry of Interior, Project Manager, Safari Shali, R. (in Persian)
- Montesquieu, C., (1989). “The Spirit of the Laws”. Translated and edited by: A. M. Cohler, B.; Millerm, & Stone, H., Cambridge, England: Cambridge University Press.
- Muller, N. & Mitchell A., (1994). “Civic Culture and Democracy: The Question of Causal Relationships”. American Political Science Review, 88: 635-52. doi.org/10.2307/2944800
- Nasution, A.; Rustiadi, E.; Juanda, B. & Hadi, S., (2014). “Dampak modal sosial terhadap kesejahteraan Rumah Tangga Perdesaan di Indonesia [The impact of social capital against the welfare of rural households in Indonesia]. MIMBAR, Jurnal Sosial dan Pembangunan, 30(2): 137-148. doi.org/10.29313/mimbar.v30i2.593
- Oberschall, A., (1993). “Social Movements: Ideologies, Interests, and Identities”. New Brunswick, NJ: Transaction of effective human interaction. First published, Blackwell Publishing.
- Paxton, P., (2002). “Social Capital and Democracy: An Interdependent Relationship”. American Sociological Review, 67, 2: 254-277. doi.org/10.2307/3088895
- Putnam, R. D., (1993). Making Democracy Work: Civic Traditions in Modern Italy. Princeton University Press.
- Rupasingha, A. & Freshwater, D., (2000) “social capital and economic growth: A county-level analysis”. Journal of agricultural and applied economics, 32 (3): 565-572. Doi.org 10.1017/S1074070800020654
- Scott, J. C., (1985). Weapons of the Weak: Everyday Forms of Peasant Resistance. New Haven, CT: Yale University Press.
- Sen, A., (1999). Development as Freedom. Oxford: Oxford University Press
- Sullivan, B. A.; Snyder, M. & Sullivan, J. L., (2008). Cooperation the political psychology of effective human interaction. Blackwell Pub.
- Wallis, J.; Killerby, P. & Dollery, B., (2004). “Social Economics and Social Capital”. International Journal of Social Economics, 31(3): 239-258. doi.org 10.1108/03068290410518238
- Wetterberg, A., (2005). Crisis, social ties, and household welfare: Testing social capital theory with evidence from Indonesia. World Bank Office, Jakarta
- Whiteley, P. F., (2000). “Economic Growth and Social Capital”. Political Studies, 48(3): 443–466. doi.org/10.1111/1467-9248.00269.