The Effect of Social Capital on Economic and Political Development

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.