Academic journal article
By Schmid, A. Allan
Journal of Economic Issues , Vol. 36, No. 3
The concept of capital as a productive input to an economy has been extended from physical capital goods (machines, buildings, and so on) to human capital (skills) and more recently to social capital. But much more work remains to make social capital operational and measurable. Institutional economists have long argued that the social relationships involved in habit, custom, norms, and law make a difference in the realization of the potential in physical goods and human skills. But a new name extending the capital metaphor is not needed to describe the institutions of collective action. Rather, this paper calls attention to an underdeveloped subset of institutions regarding motivation to which the term social capital can be most usefully applied. Motive is regarded here as a variable and not a given as in neoclassical economics.
Greed is an engine driving human choice. But an economics built only on the motive of greed and narrow self-utility maximization is incomplete (Sally 2001). People are also motivated by caring, affinity, and the giving and receiving of regard (Cory 1999). These motives provide a social capital which has some of the characteristics of physical and human capital to be explained below. A person may make an apparent gift or join a club or neighborhood association strictly for a calculated future business gain. But people also do these things because they hold social capital for others. The motive can make a difference in the flow of goods that would not be expected from greed alone.
Michael Woolcock (1997, 35) argued that "definitions of social capital should focus on its sources rather than its consequences." It will be argued that it is important to distinguish the capital good, or "factory," from its products (or behavioral consequences) and from the means for building factories. What are the alternative factories? It is easy to see that people will invest in social capital if their benefits exceed their costs-a rational utility maximization motive. This is an instrumental motivation. But as Alejandro Portes (1998) asked, What motivates people to create social capital for others if there are not immediate returns? Robert Putnam (1993) asserted that norms and trust are the source of social capital. People learn to do the right thing from a process of socialization. These deeply internalized norms are called "consummatory" by Portes (in contrast to instrumental) and come from the experience of a shared destiny. Following norms can also have a calculated rational dimension when a person considers the consequences of sanctions by the community in what Portes labels "dyadic social exchange." It can also have an emotional element such as commitment to a cause. A third motive has not been given much attention in the social capital literature. People go beyond narrow self-interest to help those they have affinity for, Sympathy and caring can be a motive with the characteristics of capital. Most researchers acknowledge that people usually act from a mixture of motives. But there is little literature measu ring the proportions of different motives in the mix. James Coleman (1988), for example, emphasized the rational actor but also allowed for norm following, but in practice has not tried to distinguish them empirically.
The plan of the paper is to first review some of the measures of social capital extant in the literature and to illustrate how they do not clearly identify and distinguish capital sources from its outputs. Next, a deeper interpretation of the capital metaphor, focused on motives, is offered. This is followed by an analysis of the role of sympathy and caring as distinct from norm following. Finally, a survey instrument is developed arid tested to measure the mix of motives that provide the energy of social capital.
Measures of Social Capital and its Consequences
Measures of social capital, its consequences, and policy implications in the literature are greatly influenced by two seminal works, those of Robert Putnam and Francis Fukuyama. …