Introduction to Social

Capital Theory
SOCAP101

Tristan Claridge

Version 1.0
August 2018
Contents
1 What is social capital, what are its benefits and downsides.................4
1.1 Understanding the concept of social capital...................................5
2 What are the main conceptual approaches and their history...............7
2.1 Theory of capital – Pierre Bourdieu................................................7
2.2 Rational-choice approach – James Coleman....................................8
2.3 Democratic or civic perspective – Robert Putnam..........................9
3 What factors complicate social capital theory....................................11
3.1 Plethora of definitions...................................................................11
3.2 Multiple overlapping and interrelated levels................................12
3.3 Difficulty of separating source, form and consequences..............16
4 What are the dimensions of social capital...........................................19
4.1 Structural social capital................................................................19
4.2 Cognitive social capital.................................................................20
4.3 Relational social capital.................................................................21
4.4 Functions of social capital – bonding, bridging, linking................22
5 What are the main approaches to social capital measurement..........26
5.1 Network perspective to measurement..........................................26
5.2 Social structure perspective to measurement...............................26
5.3 Social capital measurement considerations..................................27
5.4 Social capital measurement problems..........................................30
6 Criticisms of social capital theory.......................................................32
6.1 Social capital is not social.............................................................35
6.2 Social capital is not capital............................................................36
6.3 Social capital theory is not a theory..............................................38
6.4 Lessons from criticisms of social capital theory...........................40
7 How to use social capital theory in your research or project.............42
7.1 Define what is and is not relevant to your research context.........42
7.2 Identify a theoretical perspective or research tradition...............42
7.3 Identify a suitable definition..........................................................42
7.4 Identify a suitable methodology....................................................42
8 References...........................................................................................44
 SOCAP101 Introduction to Social Capital Theory 3

1 What is social capital, what are its benefits and downsides

Humans are a social organism, we have evolved to be social. Working
together for collective action is hard-wired into us. We want to help,
share, and give to each other and receive in kind. Many things that we
want, and need, cannot be created simply by our own efforts, so require
some form of collaboration or reciprocity. The benefits we derive from
that sociability we could call social capital. Social capital arises from the
human capacity to consider others, to think and act generously and
cooperatively.
The concept of social capital relates to important questions of human
behaviour and motivation, such as why people give or help others even
when there is no foreseeable benefit for themselves. Can rational choice
explain this? Is it the result of instinct, resulting from biological
evolution? Is it the result of psychology, or social norms, or religion? Is it
rational for persons to perform voluntary community service, to accept
unpaid leadership responsibilities, or to make efforts to maintain social
peace and harmony around them (Uphoff 1999)? It relates to the
dichotomy between competition and cooperation, self-interest and
selflessness, rationality and morality, and instrumental and intrinsic
actions.
The appeal of social capital stems from its intriguing integration of
sociology and economics. The concept helps to erode economists’ idea of
homo economicus, which has dominated capitalist societies. The idea of
homo economicus sees the modern human as a self-interested utility
maximizer (Arrow 1999). Yet this view ignores the role of social factors
in the function of society and the economy. This has led to economists'
analysis to be described as an "undersocialized concept of man"
(Granovetter 1985). Mainstream economics has puristically shied away
from investigating and explaining the way a society's institutions and
shared attitudes interact with the way its economy works (Solow 1999).
Social capital provides the context for understanding a range of
phenomenon beyond an economic lens, and as such has been heralded as
a very important conceptual innovation for inter and transdisciplinary
theoretical integration (Adam and Roncevic 2003).
Although the term social capital is relatively new, the concept is not
as it encompasses a variety of other concepts that have been around
since at least the 19th century. Intellectuals such as David Hume,
Adam Smith, Karl Marx, Georg Simmel, Émile Durkheim, and Max
Weber among many others dealt with similar notions. The quote
below is one such example.

Here I learn to do a service to another, without bearing him any real kindness;
because I foresee, that he will return my service, in expectation of another of the
same kind, and in order to maintain the same correspondence of good offices
with me or others. And accordingly, after I have served him and he is in
possession of the advantage arising from my action, he is induced to perform his
part, as foreseeing the consequences of his refusal.
David Hume
Treatise of Human Nature (1740/1978, 521)

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 SOCAP101 Introduction to Social Capital Theory 4
Social capital is a concept that is intuitive and part of our everyday lives, yet as a
theory it is incredibly complex with multiple dimensions operating at multiple
levels with a range of different factors that determine whether it has positive or
negative effects. Social capital experts can make the concept sound almost
mystical, and for many people approaching social capital for the first time it can
be daunting.
1.1 Understanding the concept of social capital
By way of introduction I will start with an explanation of social capital
that speaks to our existing intuitive understanding of the concept. The
complex theoretical part can come later once we understand how it
relates to our everyday lives.

The central proposition of social capital is that ‘relationships matter’ and

that social networks are a valuable asset. Social capital is aspects of
social context (the “social” bit) that have productive benefits (the
“capital” bit). It includes the store of solidarity or goodwill between
people and groups of people. You could think of it like a “favour bank”,
although this only encapsulates part of social capital. Another simple
explanation is as helpfulness behaviors resulting from feelings of
gratitude, respect, and friendship. The adage: “it’s not just what you
know, but who you know” relates to the powerful effects that social
capital can have and is an easy way to understand the concept in the
context of how it impacts our everyday lives.
We intuitively understand that we can derive benefits from our social
relationships with others, whether it be as simple as finding a reliable
mechanic (which can save you money) or borrowing a cup of sugar from
a neighbour (which can save you time), or finding a new job or client
(which can make you money). These are just a few tangible examples of
the benefits of social capital, there are many more. In fact, social capital
is what allows humans to collaborate, coordinate, and coexist. It is
essential to the human social existence.
Social capital has been described by some authors as lubricating the
fabric of society and allowing modern economies to function efficiently.
These may seem like lofty claims but without social capital humans
could not work together. This is because social capital is the shared
values, norms, trust, and belonging that make social exchange possible.
Our society, economy, institutions, and political system could not exist
without social capital. As such social capital has been described as a
glue. Given that social capital is the productive benefits of sociality then
everything is a benefit of social capital. Every benefit of living in society
over living as a hermit.
It must be noted however that many authors have found negative
consequences of social capital. In this regard it is unfortunate that the
term social capital includes the word ‘capital’ since it implies that social
capital is only good. Research has found that the same features of social
structure we call social capital can also be a liability in the sense that it
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 SOCAP101 Introduction to Social Capital Theory 5
can produce unwanted results. Corruption and organised crime rely on
high levels of social capital. Gangs and the Mafia use social capital as the
foundation for their organizational structure. Cartels also develop social
capital in their effort to keep control over an industry so as to reap more
profits than would otherwise be the case.
“Every feature of social structure can be social capital in the sense that
it produces desired outcomes, but also can be a liability in the sense that
it produces unwanted results”
Potential downsides of social capital include: fostering behavior that
worsens rather than improves economic performance; acting as a barrier
to social inclusion and social mobility; dividing rather than uniting
communities or societies; facilitating rather than reducing crime,
education underachievement and health-damaging behaviour.
Social capital can be either positive or negative in different contexts or
from different perspectives. In fact, because social capital is
multidimensional, it can be both positive and negative at the same time.
The inclusion of the word ‘capital’ is a source of frustration or confusion
for some people. I don’t think it is ideal, but the term is now well
established in the literature, so we need to accept it and move on.

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2 What are the main conceptual approaches and their history

Social capital has hybrid theoretical origins having been explored by
theorists from economics, sociology, political science and virtually every
other social science. Social capital is applicable to anyone investigating
human sociability and cooperation, and its evolution. Therefore, social
capital is relevant diverse theoretical paradigms such as game theory
and evolutionary socio-biology.
The initial theoretical development is typically credited to three authors
who each approached social capital from vastly different perspectives
and created different theoretical and conceptual findings.
 Theory of capital – Pierre Bourdieu
 Rational-choice approach – James Coleman
 Democratic or civic perspective – Robert Putnam
An understanding of the foundations of social capital theory helps to
navigate the myriad theoretical perspectives that now prevail in the
literature. Social capital is often plagued by competing or conflicting
definitions and conceptualisations. Being able to identify the theoretical
tradition or perspective being used by an author helps to be able to
understand the context of literature on social capital.
More recently social capital theory has predominantly focused on the
dimensions of social capital developed by Nahapiet & Ghoshal (1998) building
on Granovetter's (1992) theory of embeddedness.

2.1 Theory of capital – Pierre Bourdieu

Pierre Bourdieu (1930 – 2002) was a French sociologist and public
intellectual who was primarily concerned with the dynamics of power in
society. His work on the sociology of culture continues to be highly
influential, including his theories of social stratification that deals with
status and power. Bourdieu was concerned with the nature of culture,
how it is reproduced and transformed, how it connects to social
stratification and the reproduction and exercise of power. One of his key
contributions was the relationship between different types of such
capital, including economic, cultural, social, and symbolic.
Bourdieu’s (1986) conceptualization of social capital is based on the
recognition that capital is not only economic and that social exchanges
are not purely self-interested and need to encompass ‘capital and profit
in all their forms’ (Bourdieu, 1986: 241). Bourdieu's conceptualization is
grounded in theories of social reproduction and symbolic power (Dika
and Singh 2002). Bourdieu's work emphasizes structural constraints and
unequal access to institutional resources based on class, gender, and
race.
Bourdieu saw social capital as a property of the individual rather than
the collective. Social capital enables a person to exert power on the
group or individual who mobilises the resources. For Bourdieu social
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capital is not uniformly available to members of a group or collective but
available to those who provide efforts to acquire it by achieving positions
of power and status and by developing goodwill (Bourdieu 1986). For
Bourdieu social capital is irreducibly attached to class and other forms of
stratification which in turn are associated with various forms of benefit or
advancement (Fine 2002a). Bourdieu framed social capital as accrued
actual or virtual resources acquired by individuals or groups through the
possession of “more or less institutionalized relationships of mutual
acquaintance and recognition” (Bourdieu and Wacquant 1992: 119).
Therefore, social capital resides in the individual as the result of his or
her investment. Bourdieu’s social capital does not include collective
property attributes, which Bourdieu instead calls cultural capital.
Therefore, Bourdieu’s social capital does not confuse the level of
observation which is a common problem with other approaches.
Bourdieu’s approach is starkly different to most current
conceptualizations of social capital. Bourdieu is rarely cited for his work
on social capital relative to James Coleman and Robert Putnam. This
may be because his approach is too intellectually demanding (Fine
2002a). There are many concepts underlying the terms he uses that has
specific and significant meaning (Poder 2011). His approach is based on
his wider sociological theories of habitus and fields of practice (Bourdieu
1984). He emphasizes the fluidity and specificity of his objects of study,
which means that social capital is deeply reliant on the context of a
particular social space (Markowska-Przybyła 2012).
Bourdieu’s theory of social capital is substantiated by a rich set of
sociological theories that embrace the complexity of the social
environment rather than seeking simplification and reductionism. Fine
(2002a) suggested that this is incompatible with the wide-ranging and
superficial postures currently attached to social capital. My conclusion is
that Bourdieu’s theory of social capital may be beyond the reach of most
people outside of sociology who may fail to fully understand and
appreciate the meaning of his terminology.

2.2 Rational-choice approach – James Coleman

James Coleman (1926 – 1995) was an American sociologist who was
primarily interested in the sociology of education and public policy. Like
Bourdieu, Coleman was interested in different types of capital and their
interaction, namely human, physical and social capitals. The aim of
Coleman’s concept of social capital was to import the economists’
principle of rational action for use in the analysis of social systems
without discarding social organization in the process (Forsman 2005). As
such, Coleman connected sociology and the social actions of individuals
with the rational ideas of economists (Jordan 2015). This theoretical
union represents a middle line between two theoretical traditions
(Tzanakis 2013). The first is a functionalist view of social action which is
conditioned by social structure. The second is rational theory which
suggests that actors’ goals are determined by utility-maximizing pursuit
of his or her self-interest (Coleman 1988). Coleman (1988) connected
sociology and the social actions of individuals with the rational ideas of
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economists that individuals act independently and for self-interest
(Jordan 2015).
Like Bourdieu, Coleman saw social capital as essentially residing in the
social structure of relationships among people. However, where
Bourdieu was concerned with power and status and the uneven
distribution of social capital between individuals, Coleman saw social
capital as a public good where the actions of individuals benefits the
whole (Tzanakis 2013). As such Coleman conceptualized social capital
as a collective asset of the group and made little provision for inequality
that results or a causes differential power and status. This neglect of
power and conflict probably stems from Coleman’s preoccupation with
social capital being largely a product of social structure. This is a
significant departure from Bourdieu’s theory which treated collective
property attributes under the term cultural capital. This means that
Bourdieu’s and Coleman’s theories of social capital are fundamentally
different, and this has resulted in confusion in the literature about what
is and is not social capital.
For Coleman, individuals engage in social interactions, relationships and
networks for as long as the benefits persist (Jordan 2015). This logic
stems from rational choice theory which seeks to explain human
behaviour through rationality. These rational actions are set in a
particular social context accounting for not only the actions of
individuals, but also the development of social organization.

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In this sense, social capital is both a private and public good benefiting
everyone in the group, not only those who invest in organizing the
associations or networks. For example, everyone in a neighborhood
benefits when a neighborhood watch group forms to help lower the local
crime rate, even those people who never personally participate (Coleman
1988). Direct contributions by actors will benefit the whole, not just the
individual. Strong families or communities accrue from strong social
bonding among members.
Where Bourdieu saw social capital as reproducing social inequality,
Coleman treated social capital as almost universally productive, i.e. it is
used so that actors can achieve particular ends that would have been
impossible without it (Coleman 1988). A good illustration of this is
Coleman’s famous example of wholesale diamond merchants in New
York. In this context bags of diamonds are lent for examination without
any formal contracts or insurance, leaving the lender in danger of
receiving counterfeits or lower quality diamonds when the diamonds are
returned. Although opportunities for dishonesty are not rare, instances
are virtually never observed. Here, social capital influences individual
decisions on honesty because dishonesty by a given diamond merchant
will induce responses by others which matter to his assessment of how to
act (Durlauf 1999).
In Coleman’s initial analysis he referred the work of economists Glen
Loury and Ben-Porath, and sociologists Nan Lin and Mark Granovetter.
This integration of economics and sociology is clearly evident in his work
and was one of the most appealing aspects of this theory as it facilitated
cross and interdisciplinary investigation.

2.3 Democratic or civic perspective – Robert Putnam

Robert David Putnam (1941-) is an American political scientist most
famous for his controversial publication Bowling Alone, which argues
that the United States has undergone an unprecedented collapse in civic,
social, associational, and political life (social capital) since the 1960s,
with serious negative consequences. Putnam is generally credited with
popularized the term social capital (Portes and Vickstrom 2011).
Putnam treated social capital as a public good—the amount of
participatory potential, civic orientation, and trust in others available to
cities, states, or nations (Putnam 1993, 2000). This contrasts with
Bourdieu’s theory of social capital, with Coleman’s definition somewhere
in the middle. In Putnam’s conceptualisation social capital is elevated
from a feature of individuals to a feature of large population aggregates.
Social capital becomes a collective trait functioning at the aggregate
level (Tzanakis 2013).
Putnam made the argument that social capital is essentially the ‘amount’
of ‘trust’ available and is the main stock characterizing the political
culture of modern societies. For Putnam (1993 p. 35; 1993) social capital
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refers to ‘features of social organizations, such as networks, norms and
trust that facilitate action and cooperation for mutual benefit’. Putnam
follows Coleman’s belief that social capital is a quality that can be a
facilitator of interpersonal cooperation. In Putnam’s view, such a feature
can be considered an aggregate trait to such a degree that it can become
automatically comparable across cities, regions and even countries
(Tzanakis 2013).
Putnam has been widely criticized for fundamental conceptual and
methodological flaws. Perhaps most problematic is the drastic over-
simplification of complex and interrelated processes to a single or small
set of factors, i.e. trust as an aggregate indicator of social capital. This is
further complicated by logical circularity. As a property of communities
and nations rather than individuals, social capital is simultaneously a
cause and an effect (Portes, 1998).

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While popularizing the concept of social capital, Putnam’s work has

confounded theoretical and methodological rigor to such an extent that
much of the later work on social capital has be described as vulgar
scholarship (Fine 2002a). I think that Putnam’s work is interesting and
descriptive however offers little in the way of theoretical and
methodological framework for future study.

3 What factors complicate social capital theory

The theoretical development of social capital has occurred in different
disciplines using very different approaches. These theoretical
developments took place somewhat independently, using discipline
relevant underpinnings. These differences can be found in the resultant
approaches and are as stark as the differences between the disciplines
themselves. This has resulted in literally hundreds of different definitions
of social capital and numerous approaches to its conceptualization.
Social capital has been treated as a private good, or a public good, or
both by some authors. It has been investigated at the level of the
individual, the group or organization, and the national or societal level.
Different authors have included different factors or dimensions, while
using different terminology. In addition to these problems, different
authors confuse the source, form and consequences of social capital, or
worse, fail to differentiate them at all resulting in logical circularity.
This section discusses the main factors that complicate social capital theory.
3.1 Plethora of definitions
The commonalities of most definitions of social capital are that they
focus on social structures that have productive benefits. Definitions
generally have some combination of role-based or rule- based
(structural) and mental or attitudinal (cognitive) origins (Uphoff
1999). The variety of definitions identified in the literature stem from
the highly context specific nature of social capital and the complexity
of its conceptualization and operationalization.
Social capital does not have a clear, undisputed meaning, for
substantive and ideological reasons (Dolfsma and Dannreuther 2003;
Foley and Edwards 1997). For this reason, there is no set and
commonly agreed upon definition of social capital and the particular
definition adopted by a study will depend on the discipline and level
of investigation (Robison, Schmid, and Siles 2002). Not surprisingly
considering the different frameworks for looking at social capital
there is considerable disagreement and even contradiction in the
definitions of social capital (Adler and Kwon 2002). Because of the
difficulties in defining social capital, authors tend to discuss the
concept, its intellectual origin, its diversity of applications and some
of its unresolved issues before adopting a school of thought and
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adding their own definition (Adam and Roncevic 2003). This however,
adds further the problem as more and more definitions are added to
the pool that further complicates the theory.
In recent times authors have increasingly cited either Adler and
Kwon (2002 p.23) or Nahapiet and Ghoshal (1998 p.243). These
commonly used definitions are below.

“Social capital is the goodwill available to individuals or

groups. Its source lies in the structure and content of the
actor's social relations. Its effects flow from the
information, influence, and solidarity it makes available to
the actor.”

Adler, Paul S. and Seok-Woo Kwon. 2002. “Social Capital: Prospects for a New
Concept.” Academy of Management. The Academy of Management Review
27(1):17–40.

“the sum of the actual and potential resources embedded

within, available through, and derived from the network of
relationships possessed by an individual or social unit.
Social capital thus comprises both the network and the
assets that may be mobilized through that network”
Nahapiet, Janine and Sumantra Ghoshal. 1998. “Social Capital,
Intellectual Capital, and the Organizational Advantage.” Academy of
Management Review 23(2):242.
Other definitions are commonly used in more discipline specific studies
such as Burt (2000), Lin (2002) or Coleman (1988) in economics;
Bourdieu (1986) in sociology, and Putnam (1995, 2000) in political
science.

3.2 Multiple overlapping and interrelated levels

One of the key questions about social capital is where or at what level
of society it resides. Does it reside with the individual like human
capital? Or is it a property of society more generally? Or in fact, is it
both the property of individuals and of society? The question of
whether social capital is the property of the individual or collective is
closely echoed by discussions of whether social capital is a public or
private good.
3.2.1 Property of the individual, collective, or both
While the full gamut of views can be found in the literature a general
agreement has emerged in recent years that social capital has both an
individual and an aggregate component (Buys and Bow 2002; Newton
1997; Slangen, van Kooten, and Suchanek 2003). This is because an
individual has a degree of control over some aspects of social capital,
but little control over other aspects.
An individual can invest in personal relationships to build their social
capital. Someone can attend networking events, join community or

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interest groups, or they can volunteer their time in the community. These
activities will help them to meet new people and form new relationships.
They can be friendly, offer assistance, do favours for others, and be
trustworthy and kind. This will build goodwill and a positive reputation.
They can spend time with their network connections and share
experiences and perspectives. These actions build aspects of social
capital such as networks, trust and reciprocity, and shared language and
understanding, i.e. all three dimensions of social capital: structural,
relational, and cognitive.
It’s not just positive actions that affect an individual’s social capital.
Negative actions can have the most severe consequences for social
capital, particularly those actions that represent exploitation or
betrayal of trust. These actions tend to have significant and lasting
impacts. It can take a long time to build strong relationships,
goodwill, and trust, but it can be destroyed in an instant.
While an individual can invest in or destroy their social capital, an
individual does not own their social capital per se. Instead it resides
in their social relationships. It could be described as shared
ownership but in fact social capital requires the inclination and
availability of others to be realised. Therefore, it differs from the
typical concept of ownership. Regardless of the established
obligations, goodwill, or trust, an individual may or may not provide
the desired assistance at a given time. For example, if your interests
conflict with theirs, or if they do not possess what you require, or if
they are unavailable when required, or if they decide for any or no
reason that they don’t want to provide the desired assistance at that
time.
In this regard social capital is somewhat intangible, certainly less so
than other forms of capital. You can’t put it in the bank and draw
upon it as required. But you can build up the potential stock of social
capital such that you increase the likelihood of being able to draw
upon it when desired. Therefore, an individual may feel a degree of
ownership of ‘their’ social capital as well as a degree of control even
though social capital resides between social actors.
To illustrate these feelings of ownership and control, consider the
following reflection about social capital.

I am proud of my social capital because I have worked

hard to build it. I have invested time, energy, and in
some cases money in my social capital. I know how to
build more of it, and I know that if I am not careful I
could destroy much of it by a single action. I am
confident I am significantly better off because of my
social capital and I can cite numerous examples of how
I have benefited from it. I know I don’t fully own it, and
I cannot fully control it. I know others benefit from my
investment in social capital, in some cases more than I
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do. I feel that investing in social capital makes my life
better, my community better, and the world better. It
may sound like it is exploitive of social relationships,
but I invest in social capital because it is mutually
beneficial. In fact, I give as much as I can where
appropriate to do so. I give time, information, skills, and
any other resource I have that is useful to other people.
Often a small investment results in a large return. A
minute of my time may save someone an hour. A small
piece of information may save someone hundreds of
dollars. “A few kind words may brighten someone’s
day”. By acting in this way there is therefore a positive
return on investment for my social groupings, and
society more generally, and in the long run for me as
well.

However, there are aspects of social capital that individuals have limited
control over. These aspects tend to change more slowly, and they are
generally culturally embedded. In fact, if you review the aspects of each
dimension of social capital you find that they are more characteristics of
the collective rather than the individual. For example, when high
levels of relational social capital are present, the resultant trust and
associability become a public rather than a private good, that is,
available to anyone who is part of the group or organisation to draw
upon (Coleman 1988; Leana and Van Buren 1999; Oh et al. 2006;
Putnam 1995). The same is true of cognitive social capital
considering shared language, narratives, values, beliefs, and
attitudes are a characteristic of a group rather than an individual
(Taylor 2007). The one exception may be bridging social capital, an
aspect of the structural dimension, since it provides opportunities
primarily for the individual who is located at the ‘bridge’, so could be
considered a private good (Taylor 2007).
An individual contributes to each aspect, and the extent of influence
varies greatly depending on a range of factors, but ultimately the listed
aspects of social capital are not individual characteristics or properties,
and individuals have limited control over them.
For example, if a group, organization, or community has a general
culture of distrust then people may be less trusting despite an
individual’s previous trustworthy behaviour. Another example is rules
and procedures, an important aspect of the structural dimension of
social capital, which typically an individual has little control over. An
individual also has little control over social norms and sanctions,
especially in larger social groupings.
These collective attributes are not static, they can be influenced and
change over time. Generally, the speed of change, and the extent of
individual influence, depend on the size and
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inter-connectedness of the social grouping. Smaller or more connected

groups tend to change more quickly than larger groups. This is primarily
because it takes less time for the change of norms, values, expectations,
etc to be observed and accepted by individuals. At a societal level these
aspects of social capital are often described as ‘rooted in history’
because of the very slow nature of change through a society.
From this discussion we can conclude that social capital has both
individual and collective components and is both a private and public
good. It has characteristics of a private good because an individual
can invest in their social capital, has some degree of ownership and
control, and can derive benefits as exclusive private property
(Alguezaui and Filieri 2010). It is however also a public good since
many aspects of social capital are beyond the control of individuals
and affect and benefit larger groups of people, not just those who
created it (Kostova and Roth 2003).
3.2.2 Micro, meso, macro level social capital
There are divergent views in the literature; some authors posit social
capital at the individual level, some the community level and others
have a more dynamic view. Social capital has been located at the level
of the individual, the informal social group, the formal organization,
the community, the ethnic group and even the nation (Bankston and
Zhou 2002; Coleman 1988; Portes 1998; Putnam 1995; Sampson,
Morenoff, and Earls 1999). Kilby (2002) stated that social capital exists
at various levels as one feels belonging to family, community, profession,
country, etc, simultaneously and these levels overlap and interact. This is
one of the theoretical cornerstones of Bourdieu's sociology – the idea of
society as a plurality of social fields (Siisiäinen 2000).
Social capital is identifiable at any level of social grouping, from the
individual level to the level of the nation, and it exists at any level
where there is identification and belonging, i.e. a social grouping.
This could include identification or belonging to factors such as
location, class, race, religion, profession, hobbies, interests, and a
range of other factors.
For example, based on geography I may feel belonging to my
neighbourhood, my city, my state, and my country. In addition, I may
also feel belonging to the neighbourhood where I grew up, where I
went to college, and where I lived previously. I also share social
capital with my family, with people I went to school and college with,
and who I work with, or used to work with, who go to my church, who
are in my sporting team, who are members of the same professional
organisation, etc.

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Among these groupings there is

potential for overlap and interaction.
For example, the norms, values,
beliefs etc in my family influence my
actions in my other social groups. My
brother may also play on the same
sporting team, my neighbour may
work for the same company, and I
may see my old boss at professional
events. The norms, values, beliefs,
shared language and shared
understandings embedded in each
grouping interact in complex and
dynamic ways. This is not just
between groupings, when one Figure 1.The nature of societal structure and organisation
member interacts with a member of is too numerous and complex to describe or illustrate
another group, but dynamically as
any one member belongs to
numerous groupings simultaneously.
All these different social groupings
are too numerous and their
interactions too complex to describe,
especially when we include their
distribution in time and space.
To simplify this complexity, we can define the level of interest that is
relevant for any given application as either micro (individual), meso
(group or organization) or macro (community or societal). This
classification is useful in the analysis of social capital (refer to Figure
7).

Figure 2. Illustration of the interaction of levels at which social capital exists

Because actual reality is not divided into levels, analysis at one level
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is inevitably embedded in the other two (Turner 1999). This
represents one of the main challenges of social capital theory and its
research – simplification is required to make sense of the complex
social environment but over simplification can obstruct meaningful
findings.
Table 9 summarizes the three levels of social capital analysis. This is
a generalization of the different views expressed in the literature.
Individual studies do not necessarily fit neatly into one category and
various approaches have been used to study social capital that do not
fit into this schema. This overview is provided for descriptive
purposes to help gain a general understand the different conceptual
approaches to social capital theory.

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Level Description Property

Micro Individual Property of
individuals Private
good
Meso Group or Property of individuals and the
organization collective Private and public good
Macro Community or Property of the
society collective Public
good
Table 1. Generalized overview of levels of analysis of social capital
3.3 Difficulty of separating source, form and consequences
One of the key challenges in social capital theory is the confusion about
what causes social capital, what social capital is, and what the results of
social capital are. You could think of this as distinguishing between the
source, form, and consequences of social capital (Adam and Roncevic
2003), or another set of terminology that is popular in the literature is
separating the determinants, dimensions, and manifestations (Adler and
Kwon 2002).
The following terminology is common in the literature and is used
interchangeably:
 Source, causes, or determinants
 Form, substance, structure, or dimensions
 Consequences, outcomes, or manifestations

There is considerable debate and disagreement in the literature about

how to define what is a determinant, dimension, or manifestation.
Unfortunately, there are now many publications, even in peer reviewed
journals, that confuse them. I don’t pretend to have the answer, but I
identify it as something that you need to consider carefully in your
application of social capital theory.
Consider the following example: John is an accountant and plays football
in a local club. During a practice session he mentions to some other
players that he is looking for a new job. Another player Paul has a
brother who has an accountancy firm and is looking for new staff so
offers to make the introduction. Paul tells his brother about John and
describes him as a “a great guy who is team player”. This introduction
and recommendation results in John getting the job.
In this example clearly social capital is at work, but what are the
determinants, dimensions, and manifestations? We could conclude that
the determinant is membership in the football team. This membership
results in social interaction and the development of trust, belonging,
norms of reciprocity, and information flows – which are the dimensions.
The introduction and recommendation that results in John getting the job
is the manifestation.
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When we are investigating social capital, we need to be very careful to
separate the determinants, dimensions, and manifestations (Adam and
Roncevic 2003; Onyx and Bullen 2001; Sobels, Curtis, and Lockie 2001).
We need to be clear about what we are measuring or building otherwise
we can confuse or confound our investigation. An example is trust, which
is commonly seen as a component of social capital. Some authors equate
trust with social capital (Fukuyama 1995, 1997), some see trust as a
source of social capital (Putnam, Leonardi, and Nanetti 1993), some see
it as a form of social capital (Coleman 1988), and some see it as a
collective asset resulting from social capital construed as a relational
asset (Lin, Cook, and Burt 2001).

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We also need to understand that the causality between the determinants,

dimensions and manifestations of social capital are highly context
specific. For example, membership does not necessarily result in the
development of norms of trust and reciprocity, and high levels of trust
does not necessarily result in innovation (believed to be an outcome of
social capital).
Social capital is mostly the result of social interaction: when people
interact they develop relationships that can result in trust and norms
that can have productive outcomes. I say “mostly” because there are
other factors that can bring about social capital without social
interaction – I’ll deal with these later. I also use the word “can”, twice.
This is because social interaction does not always result in the
development of trust or productive norms. Sometimes people disagree or
are uncooperative. Even where trust and norms are established, the
outcomes may not be positive, depending on your perspective. The same
trust and norms that can facilitate innovation can also facilitate
collusion, fraud, or corruption. This is another of the key challenges of
social capital theory: the same social capital form can have productive or
perverse outcomes depending on the context (refer to Figure 1).

Figure 3. Links between determinants, dimensions and consequences or

manifestations (adapted from Claridge, 2004)
As I mentioned earlier, social capital is not only the result of social
interaction. It is also the result of the various constructs of society that
provide the background context for interaction (Portes 1998). Therefore,
it is possible for social capital to exist among individuals who don’t know
each other and who have never interacted in any way. This is a
contentious issue in the literature with many authors contradicting this
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view (see Anderson et al. 2007). Authors who see social capital as social
connections or embedded in social relations fail to account for the
powerful influence of the wider societal context.
It may seem too inclusive or too abstract to include the wider social
context, but oversimplification of the concept is equally damaging to the
future potential of the theory.
Societal constructs are created to organise, regulate, and coordinate groups
of people. The term
institution seems appropriate to denote the way that people are organised in
order to face

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fundamental problems of coordinating their activities. Basic problems

include securing resources from the environment, reproducing the
species, coordinating activities, defending against enemies, maintaining
social control, and many more. There are five basic institutional spheres
that each have different influence on social capital: kinship, religion,
economy, polity, and law (Turner 1999).
Institutions create distinctive sets of beliefs, ideologies, myths, linguistic
styles, and norms that facilitate actions and transactions. This
background context helps to link the general values of society as a
whole to face-to-face encounters which provides a means of exchange
for individuals and groups.
Examples of these societal constructs include government, corporations,
and various other institutions that result in rules, laws, and norms that
guide behaviour. They provide the background context for interaction
and are woven into the fabric of society. This aspect of social capital is
rooted in history and tradition (Adler and Kwon 2002). Some authors call
this cultural capital although it is closely related to, and part of, social
capital (Claridge 2004).
Modern societies have large, impersonal bureaucratic organisations
operating according to the rule of law. This relative stability and
predictability is a source of social capital due to the way it provides
context for exchange and interaction. Similarly, the way government
systems consolidate power is a source of social capital (Turner 1999).
The resulting social and political environment shapes social structure
that guides individual behaviour (Serageldin and Grootaert 1999).

4 What are the dimensions of social capital

The distinction between structural, cognitive, and relational social
capital was created by Janine Nahapiet and Sumantra Ghoshal and is the
most widely used and accepted framework for understanding social
capital. These dimensions are conceptual distinctions that are useful for
analytic convenience but in practice social capital involves complex
interrelations between the three dimensions.
Structural social capital indicates the presence of a network of access to
people and resources, while relational and cognitive social capital reflect the
capability for resource exchange (Andrews 2010).
Cognitive and relational social capital may seem similar however
cognitive relates to the subjective interpretations of shared
understandings whereas relational is feelings of trust that are shared by
the many actors within the social context (group, organization,
community). Thus, a simplified view of high levels of social capital would
be strong connections, high levels of trust and a shared sense of mission.
Or put another way we can understand social capital by the level of
inter-connectedness, quality and nature of these connections, and extent
of common shared vision (Akram et al. 2016).
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This relates to social capital as structural (connections among actors),
relational (trust between actors) and cognitive (shared goals and values
among actors) dimensions.
Structural Cognitive Relational
Social structure Shared understandings Nature and quality of
relationships
 Network ties  Shared language,  Trust and
and codes, and trustworthiness
configuration narratives  Norms and sanctions
 Roles, rules,  Shared values,  Obligations and
precedents, and attitudes, and expectations
procedures beliefs  Identity and
identification
Table 2. Distinctions between structural, cognitive, and relational social
capital
The structural/cognitive/relational distinction builds on Granovetter's
(1992) discussion of structural and relational embeddedness. It conforms
to the prevailing view that social capital constitutes aspects of social
structure, and the nature of social relationships, especially norms. Thus
‘structural’ and ‘relational’ social capital.
Structural social capital is tangible and can be readily observed by the
existence of network ties (ie who knows who) as well as roles, rules,
precedents, and procedures. The relational dimension however is
intangible since it is what and how people think and feel. It is therefore
‘cognitive’ since it is a function of people’s cognition and has regularly
been termed as such. It is common in the literature to find reference to
two dimensions: structural and cognitive eg (van Bastelaer 2001; Chou,
Yuan 2006; Grootaert et al. 2003; Krishna and Shrader 1999; Uphoff
1999). Since approximately 2004 it has become much more common to
find reference to the three dimensions, structural, cognitive, and
relational, and this is now the mostly widely used and accepted
framework.

4.1 Structural social capital

Structural social capital is a dimension of social capital that relates to
the properties of the social system and of the network of relations as a
whole (Nahapiet and Ghoshal 1998). The term describes the impersonal
configuration of linkages between people or units. It is the configuration
and pattern of connections between people and includes the roles, rules,
precedents, and procedures that are expressions of this configuration
(Uphoff and Wijayaratna 2000). Structural social capital is tangible and
can be more easily observed than the other dimensions of social capital.
Structural social capital is the network of people who an individual
knows and upon whom she can draw for benefits such as information and
assistance. It is typically considered the density, connectivity, hierarchy
and appropriability of the network of relationships in any given context
such as a group, organisation, or community (Davenport and
Daellenbach 2011). Important aspects of structural social capital are the
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number of ties a person has, with whom and how strong the tie is (Taylor
2007)
Structural social capital is normally studied using a network approach.
In research using the network approach the frequency of contact and
resulting social distance among actors in a particular firm or
organizational field are plotted to form a web-like diagram illustrating
actor interaction patterns (Edelman et al. 2002). It has been analysed
from different perspectives that include tie strength and centrality,
network stability and size (Lefebvre et al. 2016).
The structural dimension of social capital relates to the properties of the
social system, the various forms of social organisation that make up
society. It is the network relationships but not the quality of these
relationships since the quality of relationships is the relational
dimension.
Within the context of structural social capital many scholars have
identified the distinction between bonding, bridging, and linking social
capital (for example Putnam, 1995; Svendsen and Svendsen, 2003) to
describe different types of network ties (Lee and Jones 2008).
Structural social capital facilitates conditions of accessibility to various
parties for exchanging and transferring knowledge, and for increasing
the exchange opportunity (Ansari, Munir, and Gregg 2012). It provides
opportunities for people to gain access to relevant peers with desired
sets of knowledge or expertise (Andrews 2010). It makes it easier for
people to engage in mutually beneficial collective action by lowering
transaction costs and improving social learning (Uphoff and Wijayaratna
2000).

4.2 Cognitive social capital

Cognitive social capital is a dimension of social capital that relates
resources providing shared representations, interpretations, and systems
of meaning among parties (Nahapiet and Ghoshal 1998). It is the
cognitive schemes and systems of meaning as exhibited in common
vocabulary and narratives (Davenport and Daellenbach 2011). Cognitive
social capital is the shared language and codes that provide the
foundation for communication (Gooderham 2007).
Nahapiet and Ghoshal (1998) had originally related cognitive social
capital to shared language and shared narratives, but other authors have
described it also through shared goals or vision, and shared culture
(Inkpen and Tsang 2005; Tsai and Ghoshal 1998)
While the structural dimension can be observed in tangible relationships,
roles, rules, and procedures the cognitive dimension is intangible as it
relates to interpretations of a shared reality. It relates to Bourdieu’s
theory of habitus (Bourdieu 1986) – a set of dispositions, reflexes and
forms of behaviour people acquire through acting in society. Or it relates
to Habermas’ theory of lifeworld (Sitton 2003) – the “background”
environment of competencies, practices, and attitudes representable in
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terms of one’s cognitive horizon.
Cognitive social capital is often manifested in the use of specific
language and codes. For example, certain words within an organisation
may have different, or no, meaning outside the organisation (Ansari et
al. 2012).
Some authors conceptualize two (structural and cognitive) rather than
three dimensions (structural, cognitive, and relational), for example (van
Bastelaer 2001; Chou, Yuan 2006; Grootaert et al. 2003; Krishna and
Shrader 1999; Uphoff 1999). These authors do not distinguish between
cognitive and relational social capital and may use the term cognitive or
relational. This has led to additional confusion in the literature about
what is included in cognitive and what is relational social capital.
For example, Normal Uphoff (1999) stated that norms of trust and
reciprocity are forms of cognitive social capital. However, he
conceptualized social capital as only two dimensions: structural and
cognitive. So, this may result in unwitting readers includes these factors
as cognitive social capital even though under a three-way distinction
these factors would be relational social capital.
This confusion is exacerbated by the similarity and overlap of cognitive
and relational dimensions. Both forms arise from the mental rather than
the material realm, so both are ultimately cognitive. The distinction
between the two dimensions is that the characteristics of the relational
dimension they are embedded in, or relate specifically to, social
relationships. This is somewhat different from cognitive social capital
that describes the wider social context rather than being a characteristic
of specific relationships.
Shared understanding within a group, organization, or community is
cognitive, whereas trust and norms of reciprocity is relational as it
describes the quality of, or is embedded within, social relationships.
Cognitive social capital is shared values or paradigms that allow a
common understanding of appropriate ways of acting. Thus, cognitive
social capital provides a set of norms of acceptable behaviour (Anderson
and Jack 2002).

4.3 Relational social capital

Relational social capital is a dimension of social capital that relates to
the characteristics and qualities of personal relationships such as trust,
obligations, respect and even friendship (Gooderham 2007). The key
aspects of the relational dimension of social capital are trust and
trustworthiness, norms and sanctions, obligations and expectations, and
identity and identification (Nahapiet and Ghoshal 1998).
The relational dimension of social capital refers to the nature and quality
of the relationships that have developed through a history of interaction
(Lefebvre et al. 2016) and plays out in behavioral attributes such as
trustworthiness, shared group norms, obligations and identification
(Davenport and Daellenbach 2011).
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Relational social capital is the affective part as it describes relationships
in terms of interpersonal trust, existence of shared norms and
identification with other individuals. The relational dimension deals with
the nature or quality of networks or relationships (Cabrera and Cabrera
2005).
Nahapiet and Ghoshal (1998) identified that the key aspects of relational
social capital are trust and trustworthiness (Fukuyama 1995; Putnam
1995), norms and sanctions (Coleman 1990; Putnam 1995), obligations
and expectations (Burt 1992; Coleman 1990; Granovetter 1985), and
identity and identification (Hakansson and Snehota 1995; Merton 1968).
The relational dimension encourages normative behaviour based on
trust, reciprocity, obligations and expectations (Lee and Jones 2008). A
core facet of this is associability - the willingness to subordinate
individual goals to collective goals (Lazarova and Taylor 2009).
There is overlap between cognitive and relational social capital and this
can cause confusion for some people. For example, trust and
trustworthiness are typically described as parts of the relational
dimension. Trust can be is an attribute of a relationship, but
trustworthiness remains an attribute of the actors involved (Anderson
and Jack 2002) so may be more appropriately conceptualized as
cognitive social capital. Both cognitive and relational social capital are
intangible and stem from observation, perception, and opinion so are
highly subjective and variable between individuals and contexts. Both
forms arise from the mental rather than the material realm, so both are
ultimately cognitive, leading some authors to conceptualize both
dimensions together resulting in only two dimensions of social capital:
structural and cognitive.

4.4 Functions of social capital – bonding, bridging, linking

The difference between bonding and bridging social capital relates to the
nature of the relationships or associations in the social group or
community. Bonding social capital is within a group or community
whereas bridging social capital is between social groups, social class,
race, religion or other important socio-demographic or socioeconomic
characteristics. The bonding/bridging distinction can be made in relation
to a range of relationship and network characteristics. The table below
summarizes the main features of each.

Bonding social capital Bridging social capital

Within Between
Intra Inter
Exclusive Inclusive
Closed Open
Inward looking Outward looking
“Getting by” “Getting ahead”
Horizontal Vertical1
Integration Linkage
Strong ties Weak ties
People who are alike People who are different
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Thick trust Thin trust
Network closure Structural holes
Public-good model Private-good model
Table 3. Distinctions between bonding and bridging social capital
Robert Putman in his book Bowling Alone discussed bonding social
capital is good for "getting by" and bridging is crucial for "getting ahead"
(Putnam 2000). Putnam credit these terms to Ross Gittell and Avis Vidal
(Gittell and Vidal 1998).
Scholars at the World Bank are credited with adding the concept of
linking social capital to describe relationships among people or
institutions at different levels of societal power hierarchy (Woolcock,
2001; Szreter and Woolcock, 2004). Some authors include linking to
make the three-way distinction between bonding, bridging, and linking
social capital.
The distinction between bonding and bridging social capital builds on
the seminal work of Mark Granovetter (Granovetter 1973, 1985, 2000)
on embeddedness. This line to social capital theory is call the network
approach and is most commonly used by researchers approaching social
capital from economics. Key authors in this theoretical tradition can be
traced from James Coleman

1
In practice bridging social capital can be horizontal or vertical. See section on
linking social capital for further discussion.
(Coleman 1988, 1990) to Ronald Burt (Burt 1982, 1997, 2000; Lin et al.
2001), Nan Lin (Lin 2001; Lin et al. 2001; Marsden and Lin 1982), and
Alejandro Portes (Portes 1998, 2000, Portes and Landolt 1996, 2000;
Portes and Sensenbrenner 1993).

The concepts of bonding and bridging social capital are associated with
the network theories of structural holes and network closure (Adler and
Kwon 2002). The social network theories provide a rich tradition of
research that social capital theorists find highly applicable.
The taxonomic refinement of bonding and bridging has been described
as types of social capital (Ramos-Pinto 2012), as forms of social capital
(Gooderham, Minbaeva, and Pedersen 2011; Widén- Wulff et al. 2008;
Woolcock and Narayan 2000), as dimensions of social capital (Woolcock
and Narayan 2000), and as functions of social capital (Seferiadis et al.
2015). These terms are often used interchangeably, even by the same
author in a single publication.
Some authors have conceptualized the difference between bonding and
bridging social capital as different types of trust. Bridging social capital
could be conceptualized as generalized trust (earned trust) and bonding
social capital as ascribed trust (van Staveren and Knorringa 2007).
In practice the distinction between bonding, bridging and linking social
capital is not easy given the multiple and overlapping relationships

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individuals have with others (Healy 2002). Although popular in
academic literature the bonding/bridging distinction focuses on social
structure so fails to reflect the multidimensional nature of social capital
(Engbers, Thompson, and Slaper 2017). In the past some authors have
taken one type, bonding or bridging, as the approach for their research.
This is uncommon in recent years when researchers have preferred
more comprehensive approaches.
4.4.1 Bonding social capital
Bonding social capital is a type of social capital that describes
connections within a group or community characterized by high levels of
similarity in demographic characteristics, attitudes, and available
information and resources. Bonding social capital exists between ‘people
like us’ who are ‘in it together’ and who typically have strong close
relationships. Examples include family members, close friends, and
neighbors.
Bonding social capital is described as the strong relationships that
develop between people of similar background and interests, usually
include family and friends, provide material and emotional support, and
are more inward-looking and protective. Bonding social capital refers to
networks with a high density of relationships between members, where
most, if not all, individuals belonging to the network are interconnected
because they know each other and interact frequently with each other.
Friendships are often considered to be bonding social capital, in that they
are frequently formed between people who share common characteristics
or interests. Friends are people that we turn to when we are in a crisis,
and with whom we feel close. However, friendships may also act as
bridging relations, in that they may be between people of different
cultural backgrounds, socioeconomic backgrounds, or ages, who may in
turn provide access to information and other groups or individuals not
previously known to the other.
4.4.2 Bridging social capital
Bridging social capital is a type of social capital that describes
connections that link people across a cleavage that typically divides
society (such as race, or class, or religion). It is associations that ‘bridge’
between communities, groups, or organizations.
Bridging social capital is different from bonding social capital which is
within social groups and is characterized by dense networks with people
feeling a sense on shared identity and belonging. The bonding/bridging
distinction can be made in relation to a range of relationship and network
characteristics. The table below summarizes the main features of each.
Bridging describe social relationships of exchange, often of associations
between people with shared interests or goals but contrasting social
identity (Pelling and High 2005).
Although friends are normally considered bonding social capital,
friendships may also act as bridging relations, in that they may be
between people of different cultural backgrounds, socioeconomic
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backgrounds, or ages, who may in turn provide access to information and
other groups or individuals not previously known to the other (Edwards
2004).
4.4.3 Linking Social Capital
Linking social capital is a type of social capital that describes norms of
respect and networks of trusting relationships between people who are
interacting across explicit, formal or institutionalized power or authority
gradients in society (Szreter and Woolcock 2004). These relationships
are described as ‘vertical’ and the key feature is differences in social
position or power. An example could be relationships between a
community-based organization and government or other founders.
Linking social capital is the third type of social capital that extends the
common bonding/bridging distinction that is popular in the network
theory approach to social capital. Linking social capital may be viewed
as an extension of bridging social capital involving networks and ties
with individuals, groups or corporate actors represented in public
agencies, schools, business interests, legal institutions and
religious/political groups (Healy 2002).
Scholars at the World Bank are credited with adding the concept of
linking social capital to describe relationships among people or
institutions at different levels of societal power hierarchy. Linking social
capital differs from bridging social capital because the power
differences between partners are a conscious part of the relationship.
While bridging social capital develops horizontal trust among unlike
groups, linking social capital involves classic patron/client or
mentor/mentee relationships (Schneider 2006).
Linking social capital refers to relations between individuals and groups
in different social strata in a hierarchy where power, social status and
wealth are accessed by different groups (Healy and Cote 2001). As such
it is the extent to which individuals build relationships with institutions
and individuals who have relative power over them (e.g. to provide
access to services, jobs or resources) (Woolcock, 2001; Szreter and
Woolcock, 2004). Linking relationships also involve reciprocity. For
example, funders expect effective, quality services for their grants and
mentors hope that the people they work with will reflect well on them by
doing well in their lives or providing the same assistance to others
(Schneider 2006).
4.4.4 Approaches to conceptualizing bonding/bridging social capital
Although the distinction between bonding social capital and bridging
social capital may immediately seem straightforward, there is an
underlying conceptual ambiguity plaguing the current theoretical
literature. I have discussed bonding social capital as networks of people
who are similar in some important way, and networks of people who
typically associate together. This represents two different ways of
conceptualizing bonding/bridging:
 Internal - bridging and bonding via socioeconomic heterogeneity of
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within organizations
 External - bridging and bonding through interconnections between
associations - bridging socioeconomic divides might predominantly
result from overlapping networks between organizations

Evaluation of the internal bridging nature of associations involves

comparing membership composition of each association to the
composition of the overall population on a large number of
socioeconomic dimensions, for example age, gender, education,
income, religion, race, housing status, professional status, occupational
classification, marital status, whether one has children.
Assessment of the external bridging potential relies on counting
interconnections between associations and correcting this number for
the relative size of each association. This gives information about the
extent of overlap in networks with a higher degree of overlap
representing more bonding social capital.
Let’s explore an example to illustrate the differences. A local Sheffield
(UK) cricket team may have players who are socioeconomically similar –
they may all work for local steel works, be predominantly white males
between 18 and 40 years of age, have similar levels of education and
income, and the dominant religion may be Christian. Many of the players
may know each other outside of the cricket team, and many may also
know other members of their families. They would likely live near each
other and have gone to the same schools, attended the same churches,
and been members of the same groups or clubs.
This represents a high level of bonding social capital by both approaches.
Contrast this to a local cricket team in Brisbane (Australia) where
players would likely come from diverse backgrounds. Some may be
university students, others may work in a variety of white and blue-
collar professions, and some may be unemployed. They may include a
variety of ethnic backgrounds and have vastly different socioeconomic
characteristics. They would be less likely to know each other outside of
the team, and although they may live in the same area higher levels of
mobility may mean few of them went to the same school, attended the
same church, or were members of the same groups or clubs.
This represents a low level of bonding social capital by both approaches.
In both examples above the result was the same regardless of the
methodological approach used to define bonding and bridging social
capital. This is because often heterogeneity of membership and
interconnection between associations is related. Likeness of members is
often related to the likeness of their associational memberships.

5 What are the main approaches to social capital measurement

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There is almost universal agreement that social capital is difficult to
measure with a high degree of validity. Demand for relevant empirical
measures has continued to outstrip supply. This section will help, but
unfortunately there is no silver bullet; no perfect tool for social capital
measurement.
Social capital cannot be measured directly but can be inferred from its
determinants or manifestations. The determinants are factors that have
an impact on social interactions and therefore allow social capital to
come about. Manifestations are the outcomes of social capital for
example lower crime rates. We measure social capital by using
indicators or “proxies” that are theoretically linked to social capital.

5.1 Network perspective to measurement

Bonding – social ties between individuals within the same social group or
with others who are primarily like them. Read more about bonding social
capital.
Bridging – social ties that link people together with others across a
cleavage that typically divides society (like race, or class, or religion).
Read more about bridging social capital.
Linking – social tie (often a bridging social tie) to those with power that
provides one with the capacity to gain access to resources, ideas and
information from formal institutions beyond the community. Read more
about linking social capital.
The table below shows examples of different types of ties
of strengths. Strong Ties Weak Ties
Bonding (horizontal) ties Close friends or immediate family with similar social
characteristics,
e.g. social class or religion Members with similar interests or
social characteristics within voluntary associations
Bridging (horizontal) ties Close friends or immediate family
with different social characteristics, e.g. age, gender or ethnicity
Acquaintances and members with different
social characteristics within voluntary associations
Linking (Vertical) ties
Close work colleagues with different hierarchical
positions Distant colleagues with different hierarchical
positions and ties between citizens and civil servants

5.2 Social structure perspective to measurement

Structural – elements of social structure that create opportunities for the
social realisation of productive ends.
Cognitive – includes shared norms, values, attitudes, and beliefs,
predisposes people towards mutually beneficial collective action.
Relational – is based on the characteristics of social relationships
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between individuals and is commonly described as including trust and
trustworthiness.
This theoretical perspective could be expanded to include potential
indicators for each type of social capital.
Most investigators tend to summarize the components of social capital into
four broad categories:
 Networks, relationships and connections
 Trust
 Civic engagement and voluntary activities (including
cooperation, political participation, social participation,
associational memberships, community volunteerism, etc.)
 Civic norms, shared norms and values

The OECD concluded that there is convergence around a number of key

dimensions:
 Political participation
 Community involvement
 Informal networks/sociability
 Trust, norms and sanctions
The important point here is that the instrument of measurement must be
closely related to the theoretical understanding of social capital.

5.3 Social capital measurement considerations

5.3.1 Level of analysis
Measurement of social capital depends on the level of analysis
(individual, group and organisational, community and national), and also
on the interests of researchers – whether they are interested in the
source, form or consequences of social capital.
Measures at the national level may be of little or no relevance at the
organisational level so care needs to be taken to ensure the measure is
appropriate for the level of analysis.
For example we may measure membership in associations as an indicator
of civic engagement which is thought to be a dimension of social capital
(at the macro level), but could also be an outcome of social capital. This
can be somewhat resolved by clarifying the focus of the analysis.
Level of analysis defines the measurement instrument. The type of
measurement will depend on the scale of interest. Generally there are 3
different levels:
 Macro – community or national
 Meso – groups or organisations
 Micro – individual
5.3.2 Community and National (Country) Level Measures
At this level social capital is a community level resource or ‘collectively-
owned capital’. Due to the challenges of data availability measures at the
macro level often use secondary analysis of existing datasets not
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collected specifically to measure social capital. These datasets could
include country level census data, or the World Values Survey, the
European Values Survey, the General Social Survey, and the Index of
National Civic Health in the US.
Because the data was often not collected with the intent to investigate
social capital the indexes are often “best fit” and often not rigorously
related to the theory.
The items in the indexes have been primarily from the structural
dimension and have included trust (general and institutional),
trustworthiness, network structural characteristics (e.g. network
density, strong ties, weak ties, intra-community ties, etc.), association
membership and community engagement, and voluntary activities (e.g.
community volunteerism, civic engagement, social and political
participation, etc.). Measures used to describe relational social capital
have focused on social relationships, social cohesion, and social
interactions. Measures used for cognitive social capital have emphasised
civic norms, reciprocity, trust, social support, affective bonds and
collective goals.
Examples of macro level indexes used to measure social capital:
 World Values Survey (WVS) (Includes the European Values Survey)
 TInglehart (1997) http://www.worldvaluessurvey.org
 Putnam’s Social Capital Index Instrument and Putnam (2000)
 General Social Survey (GSS)
 National Opinion Research Center, University of Chicago (Biennial Survey)
 Global Social Capital Survey
 Narayan and Cassidy (2001)
 New South Wales Study
 Onyx and Bullen (2000)
 The Barometer of Social Capital
 Sudarsky (1999)
 Index of National Civic Health in the US
 National Commission on Civic Renewal (1996)
 Aspects of Social Capital
 Harpham (2003)
 University of Minnesota Scale
 Scheffert, Horntvedt, and Chazdon (2009)
 World Bank’s Social Capital Assessment Tool (SOCAT)
 Grootaert and Van Bastelaer (2002)
 Adapted Social Capital Assessment Tool (A-SCAT)
 Harpham, Grant and Thomas (2002)
 World Bank Integrated Questionnaire for the Measurement of Social
Capital (SC-IQ)
 Grootaert, Narayan, Jones, and Woolcock (2004)
 Social Capital Measurement Tool (SCMT)
 Kitchen, Williams and Simone (2012)
 Social Relationship Index
 Wilson (2006)
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 The UK Social Capital Measurement Framework
 Harper and Kelly (2003)
5.3.3 Group and Organisation Level Measures
It is very important for investigation of social capital at the group level to
take into account the context of the group. Because of the hierarchical
structure of most groups or organisations the role of executive
leadership in creating “culture” should be taken into account. This
culture is the cognitive dimension of social capital.
Unfortunately, many of the previous studies at this level looked primarily
at the structural and relational dimensions of social capital. They have
missed the very important cognitive dimensions that influence individual
actions that have productive outcomes.

The structural dimensions include:

 network structural characteristics (e.g. network links, network

centrality, network density, network diversity, network size,
network frequency, network redundancy, institutional network,
etc.)
 network ties (strong ties, weak ties, government officials ties,
tie strength, bonding ties, bridging ties, linking ties, structural
holes, etc.)
 association membership and institutional links
 trust
The relational dimensions include:
 social connections and ties with
 close acquaintances (e.g. family members, and colleagues at work), and
 various external stakeholders (e.g. executives from other businesses,
board members, political leaders, government bureaucratic officials,
and community leaders);
 interpersonal trust
 trust
Where cognitive social capital has been investigated it is mostly
attitudinal and value-based and include:
 shared norms, values and obligations
 reciprocity
 shared goals and mission
 attitudes and beliefs
A generic social capital measurement tool may ask about the relationship
with suppliers, but this will not be relevant to all organisations. The
nature of the group, its activities and purpose will determine the aspects
of social capital that are important and therefore what data is relevant.
5.3.4 Individual Level Measures
At the individual level, social capital is usually measured by
questionnaire surveys using indicators that tap into social connections,
social networks and social support.
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The structural dimension includes:
 degree of trust,
 social network structure and position (e.g. network centrality,
network size, network density, betweenness centrality, network
homogeneity/heterogeneity, homophily/heterophily, network
constraint, tie strength, structural holes, etc.),
 number of network memberships,
 association memberships and social participation,
 social connections and relationships (e.g. bonding ties, bridging
ties, linking ties, connectivity, etc.), and
 the quantity or volume of social resources
The relational dimension includes:
 social interactions,
 social relationships,
 social networking,
 social support,
 social cohesion, and
 associability.
Cognitive social capital includes:
 general and interpersonal trust,
 shared goals,
 shared culture,
 reciprocity,
 feelings of safety, and
 views of multiculturalism to gauge the individual’s tolerance of diversity.
Measurement of social capital is less problematic at the individual level
given greater specificity of the indicators, which are derived from social
network research.

5.4 Social capital measurement problems

Given the lack of agreed methods for measurements, researchers tend to
identify the important elements or factors that suit their research
context and develop their own instrument.
We must be critical of the relationship between the instrument and
theory, and any assumptions about causality.
This is very effective in most cases as long as the researcher has
sufficient understanding to develop an instrument informed by theory,
and the ability to be critical of the potential for the instrument to make
assumptions about the connection between the proxies being
investigated and the elements of social capital.
There are now many different measurement tools available that may be
utilized or modified to suit the context of interest. Care must be taken to
ensure that the instrument is rigorously linked to the relevant
theoretical understanding of social capital.
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We need to be aware that much of the data we use to measure social
capital is subjectively derived. Much of it tends to be opinion, feeling or
belief that is heavily influenced by the way in which it is collected.
Even the wording of a question can significantly influence the response
so care must be taken to ensure that social capital measurement is not
self-fulfilling – ie that we don’t find exactly what we set out to find
without questioning the means.
Most of the cognitive dimensions of social capital are “pre-reflective”,
often requiring some reflection for us to be able to articulate their
nature. The amount of reflection may affect the response because an
initial belief may be different to an eventual conclusion after deep
reflection of the situation.
Often the method of our data collection limits the opportunity (time
constraints) or willingness (not understanding the reason or importance)
for reflection. This can result in widely varied responses that create
noise in the data making it more difficult to identify patterns with
statistical confidence. It can even result in inaccuracy.

6 Criticisms of social capital theory

Social capital has been perceived as a miracle concept that is able to
provide answers to a range of phenomenon beyond an economic lens
(Poder 2011). Its rapid and wide application has made it one of the most
popular concepts in the social sciences yet people using the term do not
always mean the same thing. Social capital is ill-defined, with different
authors attributing different meanings to the concept (Durlauf 1999).
Scratch beneath the surface of social capital and things get complicated
rather quickly (Lynch et al. 2000). Social capital is so complicated that
entire books are devoted to exploring the conceptual and theoretical
underpinnings. I have personally spent many hours, or even days, weeks,
and months, analysing and synthesising the seemingly disparate
literature on social capital in an attempt to gain a coherent
understanding of the concept. This has been a gargantuan task over
many years that has been regularly marked by moments of exasperation
at the crass scholarship and caviller application of the concept. Social
capital is far from a unified theory; there is little agreement about
definition, dimensions, measurement, or building.
Social capital has been widely criticized, mostly for its ambiguity and
variability. I believe that discussing the criticisms of the concept is very
important since it allows us to focus our attention on the potential
weaknesses of the concept and our application of it. This allows the
opportunity to improve our practice and the validity or effectiveness of our
projects involving social capital. Many of the criticisms are valid and
failing to account for them could result in social capital projects being sub-
optimal, open to scrutiny, and even collapse under the weight of
contradiction and assumption.
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Social capital is a metaphor that highlights the positive and productive
aspects of sociability. However, it falls short of being a form of capital,
and it is also widely accepted that social capital can have positive and
negative consequences. This makes the term rather inappropriate and
confusing. Economists can object to the inclusion of social with capital,
and sociologists can take issue with the inclusion of capital with social.
Yet despite these problems the concept of social capital has been widely
applied to a seemingly ever-widening range of contexts.
The main criticisms of social capital theory are that it is not social, not
capital, and not a theory. This doesn’t leave the concept with much of
substance, leading some authors to describe the concept as
“fundamentally flawed” (Fine 2002b). In addition it has been claimed
that it is impossible to measure, that problems of circularity make it a
tautology, and that the possibility for positive or negative outcomes make
it context dependent (Haynes 2009). Some aspects are objective, but
others are subjective2 (Bourdieu 1986; McShane et al. 2016). Some are
cognitive, but others are pre- cognitive3 (Bourdieu 1986). Social capital
can be rational, pre-rational, or even non-rational (Woolcock 1998). This
suggests social capital is more of an umbrella concept than a functioning
theory (Haynes 2009). Yet these damning criticisms have not halted the
use and application of the concept. Quite the opposite is true, with
widespread and often cavalier use of the concept pervading much of the
literature on social capital (McKeever, Anderson, and Jack 2014).
Social capital seems almost immune to criticism. Its theoretical
ambiguity and variability remains a problem for its rigorous application
but also acts as an antidote to criticism. It renders most critiques both
valid and invalid depending on theoretical perspective. For example, take
the criticism that

2
Aspects such as social networks, roles, and rules are objective, but aspects such
as norms, trust, and shared understanding are subjective.
3
The background context for knowing and acting in social settings is
partly pre-reflective and therefore pre- cognitive.

social capital is not social (Fine 1999, 2002a; Haynes 2009); while I can
see that this could be true in the way some authors conceputalise social
capital, it is most certainly not true from the way I and many other
authors conceputalise it.
This stifles intellectual debate because discussions of social capital often
become conditional on theoretical perspective. There is potential for
confusion with authors weighing in on discussions without appreciating
the theoretical context. Someone may think they know what social
capital is because they read Bowling Alone4 and so feel confident to
comment or critique. But often comments about social capital apply only
to a particular perspective on the concept (Huber 2009). People who
don’t know this can cause confusion and authors who do know will often
not be confident enough of the context to contribute. And so, the
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popularity and widespread application of social capital continues,
picking up speed as assumption and contradiction confounds future
application of the concept.
This can even be seen in the peer-reviewed literature. There are
numerous examples of publications that demonstrate poor connection to
theory, or as Ben Fine (Fine 2002a) has put it “vulgar scholarship”, that
have been published in reputable journals. I can’t surmise exactly how
this has happened, but one explanation is that they based their work on
previous literature that was equally poor. Another possibility is that
reviewers didn’t have the confidence to reject the work, either because
they were not sure of the appropriateness of the theoretical perspective
or because it was consistent with precedent. It would be great if there
was a way to unpublish this work to prevent the continuation of poor
social capital research. Since that is not possible another solution would
be for this work to be discredited. But who is to say what is and is not
rigorous research or good scholarship. This is especially difficult
considering the variety of theoretical perspectives.
The current situation is that researchers and practitioners approaching
social capital for the first time must read widely to gain a thorough
understanding of the concept from different perspectives. They need to
evaluate the options and select an appropriate approach. In the past this
has led to many people creating their own definition of social capital,
and this has added to the current definitional difficulties. People who do
not read widely run the risk of selecting a narrow perspective that is not
sufficiently related to underlying theory. This leaves their work open to
criticisms of circularity, tautology, exaggeration, assumption, and
confusion.
For someone approaching social capital theory for the first time the
challenge can seem immense. There are numerous definitions, different
levels of analysis, and different terminology that is often used
interchangeably. Some authors refer to dimensions, but other authors
use other terminology such as types, forms, or functions. These terms
are even used interchangeably with the precise meaning remaining
unclear. When reading literature on social capital one tends to find
ambiguity, variability, inconsistencies, and contradiction. Unfortunately,
the social capital literature is marred by ‘vulgar scholarship’ (Fine
2002a) where authors have used the concept without sufficient
consideration of its theory and have failed to understand and account
for its inherent complexity.
The complexity partly stems from the broad nature of the concept since
it relates to any aspect of sociability that has potential productive or
perverse outcomes. This makes it virtually impossible for any project to
take a comprehensive approach that includes all dimensions and levels.
Therefore, researchers tend to narrow their scope to a particular area of
interest, in the process they omit dimensions, aspects, or levels of
analysis. This is not a criticism per se, but the way in which this is
typically done has little bearing on our theoretical understanding of the
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concept.
From another perspective the broad nature of social capital has made it
applicable to almost any area of human endeavour. As such it has been
described as a catch-all, for-all, cure-all term (Huber 2009; Lin and
Erickson 2010) or an umbrella concept (Haynes 2009). Since it relates to
human sociability it encompasses almost any concept related to social
structure, social organisation, or social action. Social capital is a new
term for an old concept. Issues related to the core themes of social
capital have been investigated and discussed in the social sciences for
hundreds of years. This means that there is an approximately similar
term, or series of terms, to be found in every discipline of the social
sciences. Table 11 includes a small sample of relevant terms, some are
approximately equivalent to the concept of social capital while others are
a subset or dimension of social capital.

embeddedne group-based collective action

ss social identification social norms and
support group dynamics sanctions reciprocity
social social trust
cohesion investment cultur
social inclusion or prosocial e
exclusion social behaviour
equality social
solidarity
Table 4. Terms related to social capital – this is not an exhaustive list
The popularity of the term social capital has resulted in many authors
using the term when it would be more appropriate to use a related term
that has a more relevant meaning. Claude Fischer (2005) believed that
the term social capital is unnecessary as other clearer and simpler terms,
such as membership, sociability, and trust serve perfectly well (Haynes
2009). For example, an author may use the term social capital when their
interest is social inclusion. They cherry-pick social capital theory for
aspects that are relevant to social inclusion and discard the aspects that
are not relevant. This causes several problems, not least is a failure to
connect with existing literature on social inclusion and the resulting
pollution of the social capital literature.
Another example is an author interested in trust who instead uses the
term social capital. They then equate social capital as trust, thereby
ignoring the other dimensions of social capital. This is another example
of cherry-picking social capital theory to suit an inappropriate
application.
In some cases, the popularity of the term social capital has led to authors
using the term in the title of an article, but make little, if any, reference
to the term in the body of the article. The term may be added without
explanation or discussion in a way that can leave the reader unclear
about what, how, or in what way the topic is relevant to social capital.
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It’s like reading an undergraduate student’s essay that employs a
declarative conclusion such as “… and therefore social capital.” without
discussion of how and why. While this may not cause further problems
for the theory it demonstrates how the concept has become a catch-all
term.
The following sections deal with some of the common criticisms of social
capital as a concept and theory. While some of these criticisms are
applicable to social capital generally, many of them are applicable only
when social capital is defined or used in a certain way. This means
criticisms tend to relate to a theoretical perspective on social capital
rather than social capital generally. It can be difficult to identify which
comments relate to which perspective. That is, under what conceptual
and theoretical approach does the critique hold true and when is the
critique not relevant? This makes any critique complicated. Where
possible I will identify when the criticisms are or are not relevant.

6.1 Social capital is not social

Many conceptualisations of social capital simplify, reduce, and abstract
the concept to the extent that it almost ceases to be social. While many
authors perceive social capital as a means to give social issues
prominence in analysis and decision making it is often used for the
opposite purpose. It gives economists the opportunity to ‘colonise’
sociological territory with fundamentally economic notions (Fine and
Green 2000; Haynes 2009). This is not a criticism levelled at all
economists, but is relevant to any researcher who imports
methodological individualism and reductionism that restrict social
capital to economic rationality on the part of individuals (Antcliff,
Saundry, and Stuart 2007). Where this happens, social capital could be
accurately described as not social.
Social capital also tends to be abstracted because many aspects cannot
be observed directly. Since they cannot be observed directly researchers
tend to use indicators that can be measured and that are believed to
have a causal relationship with the aspects of social capital being
measured. This means that what is being measured ‘indicates’ the
existence of social capital. Social capital is said to be measured by
proxies because the proxies ‘stand in’ for the aspects of social capital we
hope to measure. The quality of these proxies varies enormously
depending on the theoretical and practical relationship to the aspect of
social capital we are attempting to measure. Some proxies are merely
correlational, such as the use of crime rates to measure trust, others are
more widely accepted and theoretically robust, such as the use of group
memberships to account for the size or nature of a person’s social
network (Engbers et al. 2017). Therefore, to measure social capital the
‘social’ is often reified and reduced to characteristics of something else.
The reifying of the social may not be immediately evident but it is most
problematic when there is a lack of connection between the theory and
measurement practices. For example, measurement approaches often

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look at the behavioural manifestations of social capital, such as
membership in associations as a proxy for trust. This is an
oversimplification that contains assumptions and confusion over
correlation and direction of causality between the aspect of social capital
being measured and the proxy that is used.
Trust is a good example of an aspect of social capital that cannot be
observed directly. Many of the results of trust can be readily observed
and measured, however this may or may not relate directly to the trust
we are attempting to measure. The existence of trust could be inferred
from the actions of individuals and often a lack of available data forces
researchers to use an indicator of trust, such as crime rates as discussed
above.
By its nature the ‘social’ is highly complex and abstract. It relates to
feelings, beliefs, and perceptions that are largely cognitive and pre-
cognitive. So, to operationalise social capital we need to ‘flesh it out’ to
make it more tangible or concrete. This is typically done by some degree
of simplification, reduction, and assumption that distorts the essence of
social capital (Markowska-Przybyła 2012). By trying to explain the
operation of highly complex systems in terms of the properties of their
constituent parts many authors may fall into the trap of ‘explanatory
reductionism’ (Mayer 2003).
Indeed, social capital tends to be a reductionist concept, particularly
where the focus is on the individual level. Ben Fine and Francis Green
argued that the concept is “reductionist across a number of dimensions:
to the individual, to utility maximisation and to universal categories”
(Fine and Green 2000: 91). This is not surprising considering
reductionism is the dominant paradigm of many disciplines. It is very
difficult to conceptualise particularly the relational and cognitive
dimensions of social capital from a reductionist perspective.
Methodological reductionism inevitably results in a focus on the
individual, which diminishes the importance of the social setting in
understanding human behaviour. The concern is that this makes the
analysis of social capital less social.

6.2 Social capital is not capital

The most obvious criticism of social capital is the term itself and the
question of whether it is ‘capital’. This is a common debate that has
pervaded the literature on social capital. It stems from the unfortunate
analogy that the term social capital attempts to make. Not only does
social capital fail to meet the traditional definition of capital, the fact
that it can have both positive and negative consequences make it
incongruent with the term capital.
There are numerous critics of the inclusion of capital in social capital,
including notable economists such as Kenneth J. Arrow, Robert M.
Solow, and Samuel S. Bowles. For many economist’s social capital is an
affront to their discipline due to the erosion of the concept of capital.
Attaching the adjective ‘social’ to the economic term ‘capital’ is an
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attempt to modify ‘capital’ as ‘social’ (Mayer 2003). To most economists
this is both unnecessary and inappropriate.
Robert M. Solow has been critical of the use of the term capital in social
capital. He stated, “it is an attempt to gain conviction from a bad
analogy” (Solow 1999: 6). He also stated that “I do not see how dressing
this set of issues in the language and apparatus of capital theory helps
much one way or the other” (Solow 1999: 9).
Kenneth Arrow (1999) found that social capital failed to meet the three
important characteristics of capital: (a) capital has a time dimension; (b)
it requires deliberate sacrifice of the present for future benefit; and (c) it
is “alienable”—that is, its ownership can be transferred from one person
to another (Quibria 2003). Although he did find that (a) above may hold
in part where building a reputation or a trusting relation (Arrow 1999).
His overall conclusion was that social capital should not be added to the
other forms of capital (Arrow 1999).
The American economist Samuel Bowles discussed the issue of ownership of
social capital:

“‘Capital’ refers to a thing possessed by individuals; even

a social isolate like Robinson Crusoe had an axe and a
fishing net. By contrast, the attributes said to make up
social capital—such as trust, commitment to others,
adhering to social norms and punishing those who violate
them—describe relationships among people”. (Bowles
1999: 6)

This suggests that because social capital cannot be owned by an

individual and therefore cannot be traded it doesn’t meet the traditional
definition of capital.
I remain dissatisfied with the term and I generally agree with many of
the criticisms above. I find the inclusion of the word capital most
problematic when discussing the negative outcomes of social capital.
That said, the term now has a history, albeit a chequered one, that gives
meaning and significance to discussions. To start again with a new term
would likely lead to further complication and confusion. So, I believe we
are stuck with the term and for better or worse it’s here to stay.
It should be noted that not everyone disagrees with the use of capital in
the term social capital. There is considerable controversy in the
literature (Falk and Kilpatrick 1999; Hofferth et al. 1999; Inkeles 2000;
Lake and Huckfeldt 1998; Schmid 2000; Smith and Kulynych 2002).
Portes (1998) suggested the location of capital in relation to other forms
of capital:
‘whereas economic capital is in people’s bank accounts
and human capital is inside their heads, social capital
inheres in the structure of their relationships’ (Portes
1998, p. 7).
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This doesn’t add much conviction to the appropriateness of capital in
social capital, but other authors have identified similarities to other
forms of capital. Social capital is similar to other forms of capital in that
it can be invested with the expectation of future returns (Adler and Kwon
1999), is appropriable (Coleman 1988), is convertible (Bourdieu 1986),
and requires maintenance (Gant et al. 2002). There are significant
differences in that it resides in social relationships whereas other forms
of capital can reside in the individual (Robison et al. 2002). Further,
social capital cannot be traded by individuals on an open market like
other forms of capital but is instead embedded within a group (Gant et
al. 2002; Glaeser et al. 2002). It is clear from the literature that social
capital has both similarities and dissimilarities with neocapital theories
and is certainly quite dissimilar from a classical theory of capital.
To discuss this in more detail it is necessary to further identify the
characteristics of ‘capital’. Schmid (2000) identified that capital is not
immediately used up in production but rather its’ services extend over
time. The capital stock is subject to investment for future production and
depreciation and decay from both use and non-use. Piazza-Georgi (2002)
stated that capital produces income and encompasses the non-
consumable, but depreciating, inputs into the production process. The
author supported Schmid (2000a) stating that capital is a productive
resource that is the result of investment (Piazza-Georgi 2002). Castle
(2002) added that other characteristics of capital are usefulness and
durability.
If social capital is adherence to a norm and not affected by individual
action as Fukuyama (1995) suggests, then it is not capital in the above
sense. The main difference is that more than one person benefits from
social capital (Schmid 2002; Schmid 2000). Smith and Kulynych (2002)
believed that the word capital has a too broad, pervasive and honorific
meaning and that the term blurs many distinctions which adversely
affects the scholarly inquiry, whatever its implicit or explicit normative
concerns. Inkeles (2000, p. 20) suggested that the term capital is too
limiting and would rather use the term social or communal resources.
The author argued this on the basis of:

‘capital being an element of production, in particular the

production of goods, but also services. We want not only
goods and serves but also social support, physical and
social security, freedom of expression, opportunities to
develop ourselves and a host of these outcomes not
captured by the idea of goods and services’.

Hofferth, Boisjoly et al (1999) suggested that social capital is the result

of altruism and therefore not capital as capital is a resource that is built
up through investment and can be drawn upon when needed. Lin, Cook
et al (2001) disagreed by identifying that social capital shares
commonalities with other forms of capital, notably human capital. SCIG
(2000) supported Lin, concluding that the consequences of social capital
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are capital in nature because capital suggests something that is durable
or long lasting and suggests something that retains its identity even after
repeated use, something that can be used up, destroyed, maintained, or
improved.
Many authors identify that both forms of social capital, structural and
cognitive, qualify as capital because they both require some investment –
of time and effort if not always of money (Grootaert 2001; Grootaert and
Van Bastelaer 2002b; Krishna and Uphoff 2002). It can be concluded that
social capital is unlike other forms of capital but also not sufficiently
dissimilar to warrant a different term. Certainly, it is the use of the term
capital that makes the concept attractive to such a wide range of people
given the bringing together of sociology and economics (Adam and
Roncevic 2003). Perhaps a more appropriate term may be social
solidarity as the notion connotes relations of trust, co- operation, and
reciprocity just as much as social capital and might be used in place of it
to overcome the problem identified above with using the term capital.
It is interesting that the term capital should be used with social,
considering capital is already a social relation. In the original sense of
the word capital, an object is only capital under particular social
conditions. In the same way the sources of social capital are only capital
under particular social conditions. For example, a favor owed is only
capital under certain, not necessarily favorable conditions. This idea
brings in the notion of negative or perverse social capital.

6.3 Social capital theory is not a theory

The word ‘theory’ can mean different things in different fields of
research, however it generally means an explanation or descriptive
assertion related to specific events (Haynes 2009). Many approaches to
social capital theory make significant generalizations to simplify the
complex social environment with the aim of making measurement more
practical and achievable. Unfortunately, by doing so they lose much of
the explanatory power of the processes that make up social capital.
Some authors even treat the concept as a coherent whole without
explaining how meaning is derived from the various mechanisms that
make up the concept. The opposite also causes problems. By attempting
to distil social capital to simple discrete elements the essential meanings
tend to be lost in the inherent assumptions that are typically involved. An
example is the distinctions between bonding, bridging, and linking social
capital. These typologies amalgamate a variety of contradictory aspects
of both networks and norms into single categories, creating
methodological blind spots that decrease the use-value of the concept
(Ramos-Pinto 2012).
An example of this generalization is how trust is typically treated in
social capital measurement where trust is commonly equated with social
capital. It tends to be measured by questions such as “Would you say
most people can be trusted?”. This assumes that trust has no meaning
independent of its ability to facilitate social relationships. A richer

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picture of trust suggests it is a psychological disposition independent of
the relationship context (Engbers et al. 2017). Other theoretical analyses
suggest trust is a highly contextualized decision regarding the
trustworthiness of potential partners, largely independent of the
elements that are said to be part of social capital (Hardin 2002; Ramos-
Pinto 2012). A further problem with this approach is that trust tends to
be pre-reflective so not fully known and understood by the person
answering the question, but rather part of the background context of
knowing and acting (Bolton 2006). If they have the time and motivation
to reflect on this question their answer may be different to their
immediate response. Responses are also influenced by a range of factors
including personality, mood, and how they understand the question and
its context. Experimental work suggested that social trust questionnaires
may be conflating trust with caution (Miller and Mitamura 2003). This
discussion suggests that the way trust is typically included in social
capital theory results in the loss of meaning.
Social capital is a renaming and collecting together of a wide variety of
sociological concepts and processes (Borgatti and Foster 2003). Calling
the encompassed processes ‘social capital’ is just a means of presenting
them in a more appealing conceptual garb (Portes 1998), but by doing so
it becomes a sack of analytical potatoes, merely a metaphor or a
heuristic device rather than a robust and coherent theory (Fine 2002a). I
can see how in this respect social capital has become a catch-all concept
which allows each author to see what they want (Poder 2011). Adler and
Kwon (2002) made the point that social capital is "a wonderfully elastic
term" (Lappe & Du Bois, 1997: 119), a notion that means "many things to
many people" (Narayan & Pritchett, 1997: 2), and that it has taken on "a
circus-tent quality" (De Souza Briggs, 1997: 111).
The inclusion of the word “social” makes social capital incredibly general
and widely applicable to virtually any area of human endeavour. The
word "social" is one of the most widely and broadly used adjectives in
the English language yet the realm of what is "social" is extremely
complex (Uphoff 1999). It is not clear what is assembled under the
umbrella of social and what is the precise composition of the social
domain. The use of the word social gives social capital enormous
generality as well as ambiguity. When the concept is defined so broadly
it seems to cover any social phenomenon which could have potential
effects on social and economic outcomes and therefore it lacks specificity
and substance (Huber 2009). When conceptualized as an undifferentiated
mixture of multiple independent social dimensions the causal
mechanisms of specific dimensions remain nebulous (Hauser, Tappeiner,
and Walde 2007). A further result of this approach is the tendency for
social capital theory to gloss over the multi-dimensional and conflictual
nature of social stratification, especially where social capital ignores
divisions of class, race, ethnicity, gender, age, etc. (Fine 2002a). The
result is that social capital as a concept lies somewhere between grand
systemic theory and mere description.

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 SOCAP101 Introduction to Social Capital Theory 46
It is often a heuristic since it is often not an optimal approach. Despite
this, many consider it sufficient for their immediate goals. This adds
validity to the claims that it is little more than a metaphor and heuristic
device. As discussed previously, social capital encompasses a range of
processes that have been subject to scholarly investigation in a range of
disciplines. By combining these processes in a single concept the result is
to reduce and homogenise the content of earlier diverse analyses (Fine
2002a). As such using the social capital concept is often not the ideal
approach since in many circumstances a different concept would be more
relevant and appropriate. However, the popularity and appeal of the
concept has resulted in it being used in the place of other more suitable
terms. When this happens often the author will cut and trim social capital
to make it suit.
This further reduces the explanatory power of the ‘theory’, especially
compared to the established concept that should have been used instead
of social capital.
Other reasons why social capital has been criticized for not being a
theory relate to the multitude of problems with conceptualization and
operationalisation. Social capital theory application tends to be flawed in
view of model specification, multicollinearity, omitted variables, multiple
equilibria, cross- section as representative of time series, and so on. The
biggest problem tends to be confusion of the cause, function, and
consequences of social capital (Healy and Cote 2001). Following from
Putnam (1995) and Coleman (1988, 1990) many authors do not really
distinguish social capital from its product (Poder 2011). Authors tend to
confuse the existence of social capital with its functions and its causes
with its effects (Sobel 2002). That is, they don’t differentiate between the
identification of social capital and the resources obtained from or
through it (Mayer 2003). This can result in researchers finding exactly
what they set out to find since the dependent variables and independent
variables measure the same thing. Mayer (2003: 111) suggested that the
cause, function, and consequences of social capital are often conflated in
a circular argument. Often outcome variables and the underlying causal
variables are not satisfactorily differentiated and possible alternative
causal factors are not controlled for (Huber 2009).

The lack of distinction between source, form, and consequences of social

capital has other problems. When social capital is defined in terms of the
presence of desirable outcomes then researchers will logically find
exactly what they are looking for. In this respect many authors treat
social capital as an unalloyed virtue (Durlauf 1999). Yet we know that
this is not the case. The same social processes that result in benefits can
produce undesirable outcomes, depending on perspective. Thus social
capital research must deal with how socially desirable versus socially
undesirable behaviors are selected (Durlauf 1999). Ben Fine (2002a)
believed that the fact that social capital can also result in perverse
outcomes depending on circumstances renders it unacceptable and
subject to collapse under the weight of its own contradictions and
inconsistencies. Further discussion on the problems of social capital
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measurement can be found in the chapter on measurement.

6.4 Lessons from criticisms of social capital theory

The criticisms of social capital may seem damning. After considering the
problems with the concept one may be inclined to dismiss it entirely as
fundamentally flawed and beyond salvage. But as an optimist I see the
criticisms as an opportunity to learn and improve our practice in relation
to social capital. Many of the problems with the use of social capital
would be avoided if there wasn’t cavalier use of the concept. This can
happen under several different circumstances. For example, where
people use the term where a different term would be more appropriate,
where people use the term without understanding or explaining how it is
relevant, where people tailor it to suit their purpose by omitting or
aggregating certain aspects, and where people use it with poor
scholarship.
It’s not clear exactly how to avoid making these mistakes given that
every context is different and there are many different theoretical
approaches to social capital. There are however several lessons that we
can take from the above discussion:
 Don’t lose the social by allowing rationalism, individualism, and
reductionism to reify the ‘social’
 Don’t treat social capital as capital, it’s not capital in the
traditional sense, it’s more appropriately a glue, lubricant, or
catalyst
 Don’t use social capital if a more appropriate term exists
 Don’t perpetuate the existing vulgar scholarship by
oversimplifying or inappropriately aggregating aspects
 Don’t get caught in a circular argument - be very clear about
what is source, form, consequence
 Don’t make assumptions about the indicators of social capital,
particularly how the data is collected and what its significance is
for the aspects of social capital being investigated
 Don’t ignore the context where social capital is being used or
investigated and be clear about the scope of interest or relevance
 Don’t confuse or ignore the different levels at which social capital exists
 Don’t create your own definition or instrument where an existing one
would suit

The application of social capital requires careful thought and

consideration. In general, the best approaches tend to be those that
maintain and embrace the specific context being investigated and those
that allow for complexity to be maintained rather than simplification and
aggregation that often involves assumption and confusion of causality. As
such, qualitative approaches tend to achieve the best results, especially
methodologies such as ethnography that allow understanding to emerge.
Mixed methods also tend to be very popular due to the desire to collect
data from a larger sample and this approach can have success.
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7 How to use social capital theory in your research or project

Social capital is highly applicable to a wide range of phenomenon. It can
provide a suitable framework for analysis of social context, thereby
elevating the importance of social factors that may otherwise be
overlooked or underestimated. However, social capital is not yet a unified
or mature theory that can be readily and rigorously applied. Special care
must be taken to follow scholarly practices to avoid theoretical or
methodological mistakes.
This section identifies and discusses some of the key factors you should
take into account when using social capital theory.

7.1 Define what is and is not relevant to your research context

Social capital can be applied to such a wide range of contexts that it is
important to clearly identify your context and what is, and is not,
important or relevant for your project.
Social capital can be applied to individuals, groups, organizations, and
communities. Some studies may seek an understanding of the role or
importance of social capital in a given context, others may investigate
how to build or improve social capital, while others may focus on the
cause or consequences of social capital on a particular phenomenon.
Consider what is relevant to your
research context. In your context:
 Is your focus on the outcomes for individuals, groups, or the whole
community or society?
 Are you interested in social capital internally within a group, or
externally to the group?
 Is social capital a public good, private good, or both public and private?
7.2 Identify a theoretical perspective or research tradition
It is vital to review the different theoretical perspectives and identify the
perspective that you will use for your research. This will allow you to
focus on only those approaches and factors that are appropriate for your
chosen perspective. When reviewing literature on social capital you need
to be able to identify the theoretical perspective being used, so that you
can identify literature that is not relevant to your project. This can often
be done by observing the definition being used, or by the discipline of
the author/s.
To help identify a suitable theoretical perspective consider whether
social capital for your discipline and application is considered a public
good or private good (or both).

7.3 Identify a suitable definition

Once you have identified your theoretical perspective you must choose a
suitable definition for your study. I would strongly discourage you from
creating your own definition since this will add to the existing
definitional problems. As identified previously, the definition most
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commonly cited is either Adler and Kwon (2002 p.23) or Nahapiet and
Ghoshal (1998 p.243).

7.4 Identify a suitable methodology

To date social capital studies using quantitative methodologies have been
susceptible to criticism for overgeneralisation and tautology. There are
several quantitative instruments that show promise where they are
rigorously linked to the theoretical understanding of the concept.
Examination of social capital using Bourdieu’s definition of social capital
requires more qualitative methodologies since Bourdieu’s theory treats
social relations as highly complex. Social capital cannot be quantified
simply by using individual indicators because they are not merely the
property of individuals. As such, if you choose to follow Bourdieu’s
conceptualisation of social capital you should use qualitative
methodologies.

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SOCAP101 Course Notes