It also appeals to conservatives who are interested in charity-based social supports, and wish to see individuals and communities, rather than the state, providing solutions to persistent problems such as poverty or social exclusion. It also holds appeal for neo-liberal states that seek to bolster social engagement without addressing structural issues such as changes in employment forms and decreases in social service expenditure (Bezanson,2006)."
On the other hand, the versatility of the theory has been criticized. Some have asserted that the theory may become "all things to all people" and as such it will become a theory that is not viable in any format (Bezanson,2006). With all these factors taken into consideration it is also apparent that, the theory of social capital does single out the importance of informal caring relationships to the quality of life afforded to individuals and groups (Bezanson,2006).
Each of the three aforementioned types of social capital serves a purpose in the cultivation of the type of social capital that would result in beneficial outcomes from an economic standpoint. The research indicates that on the one hand, social capital is a promising concept in the sphere of economics because it encourages synergy. However, on the other hand, social capital is problematic because it has been embraced or used to analyze so many different subjects. As such there is a fear that using social capital in the analysis of economic factors will be inadequate.
Social Capital and Modern Economics
Grootaert & Van Bastelaer (2002), contend that if social capital is to be defined as capital its economic impact must last.
For example, if a community comes together everyday to allocate commons for the day, the social interaction in that community will generate social benefits but no economic stock (Grootaert & Van Bastelaer, 2002). In this case, social labor has occurred as opposed to social capital (Grootaert & Van Bastelaer, 2002). The lasting effects of that capital can be associated with the social interaction or the influence of the social interaction (Grootaert & Van Bastelaer, 2002).
According to the author the most apparent way social relationships can generate lasting effect is by promoting investment in physical capital (Grootaert & Van Bastelaer, 2002). For instance, if a community comes together to build a school, there will be an economic benefit associated with the social interaction that occurred (Grootaert & Van Bastelaer, 2002). Although the school is not social capital -- they are considered physical capital. However, social interaction was the impetus and persistent economic benefit was the result (Grootaert & Van Bastelaer, 2002). Therefore, the social capital allowed the community to overcome a free-rider problem: everyone in the community desires to have the school, but no one wants to assist in the paying for the school (Grootaert & Van Bastelaer, 2002).
Also as it relates specifically to Social Capital and Modern economics the research seems to indicate that there is a growing conection being made. Bezanson,(2006) reports that there has been a rise in the use of social capital when discussing economics. Some economists have asserted that there is an embrace of "the "social" by economists within a shift at the level of international states and institutions, as well as academic theoretical currents. In reaction to the repeated incapacity of economic theory to predict or explain failures in international economic initiatives, economics has turned greater attention to the "social" (Bezanson,2006)."
The author insist that this change is indicative of a movement from neo-liberalism and post modernism towards a new interest in a point-of-view that is more concerned with income distribution and wealth (Bezanson,2006). When such a movement is applied to social capitalism, the theory may be come an enduring subject that will be utilized to compensate for the insignificant amount pf information available as it relates to market systems (Bezanson,2006). In other words the social aspect of the theory may become the explanation for any or all market imperfections (Bezanson,2006).
With all these things being understood the author points out that social capital is a theory that has advantages and disadvantages as it relates to methodology, Conceptuality, and the creation of new policies (Bezanson, 2006). From a conceptual standpoint, discussions concerning social capital...
On the other hand as it relates to the political economy, social capital must be examined in a more historic context which often insist upon integrating the economic into the social (Bezanson, 2006). Additionally, the author asserts that all capital is social at its foundation. To think otherwise would be to assert that the economy could be separated form the social without any interferences or consequences. Also when an emphasis is placed on developing, bridging and linking social capital there is often too much emphasis placed on networks and commonly utilized models as the sources of progress in the job market (Bezanson, 2006). As such social capital can be utilized as a vehicle for an employability model of welfare states (Bezanson, 2006).
Such an emphasis on job market outcomes is also misplaced as it relates to the bonding type of social capital which is most often associated with women who carry the primary burden of developing social bonds and reproduction (Bezanson, 2006). With this being understood the social bonds created in this manner do not commonly produce job advancement or networks that surpass class boundaries (Bezanson, 2006). As such the concept of social capital must be critically examined because high degrees of social capital can also be utilized in negative ways (eg. Hate groups) that will be of no benefit to the economy or communities (Bezanson, 2006).
From the perspective of the Methodology, most research concerning social capital within the context of a cure for imperfect markets, utilize quantitative methods associated with economic modeling (Bezanson, 2006). Nevertheless, data concerning the factors that create and maintain social capital may be most effectively exposed through the use of qualitative methods including time-use surveys, and interviews (Bezanson, 2006).
The author contends further that the timing of the surfacing of social capital as a theory of interest to governments and international institutions is somewhat suspicious (Bezanson, 2006). This suspicion exists because the outcome of neo-liberalism as the economic and social strategy model has resulted in a relatively stark Canadian welfare state (Bezanson, 2006). Such strategies have also resulted in a substantial reduction in policy tools that governments can utilize to manage and remedy disparities in income and opportunity (Bezanson, 2006).
In addition the utilization of the theory of social capital by conservative economists implies that, the economy cannot be alienated from the social aspect of the theory, even though the social is defined as networks of associations that disseminate business standards or assist in stabilizing communities so that investors can become established. The author further contends that the focus on the individual as a bearer of social capital that can be mobilized -- by volunteering at a local school, for example -- can result in the rather easy and convenient argument that the state has little role to play in the economy. Decentralization, a focus on the local or the "community," and an adherence to the idea that stronger social capital (networks, associational life, trust and confidence in institutions) will result in stronger communities means that redistribution and measures to counter structural class, race and gender inequalities (among others) are not foregrounded. While non-state organizations are central to fortifying democracy and building social movements (Norris, 2002), the Putnam version of social capital as a social or collective good, they cannot replace a redistributive and responsive state (Bezanson, 2006).
In addition to impacting local economies, the World Banks asserts that social capital is the essential component in combating the problems with the modern global economy, particularly as it relates to poverty. An article published by the World Bank entitled, "More Social Capital, Less Global Poverty?" social capital is needed in the context of eradicating poverty because it creates trust and promotes relationship building. In addition the article asserts that high social capital must be utilized in the distribution of foreign aid. The World Bank contends that policies governing foreign aid should promote "reciprocity by abandoning pre-set conditions set by donors, for example, or fostering the all-important task of coalition building...Equally important is the need to experiment with loans and grants to projects that seem to generate the kinds of social capital that are most important to poverty-eradication (Edwards, 2000)."
The author explains that bridging social capital is often the type of social capital needed in poverty stricken countries because it provides individuals with information and opportunities. Without this access to information and opportunities the cycle…
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