Social Capital and Economic Growth: A Comparative Study between High and Low Social Capital Countries

Document Type : Research/Original/Regular Article

Authors

1 Associate Professor, Department of Economics, Faculty of Economics, Management and Accounting, Yazd University, Yazd, Iran

2 MA of Economics, Faculty of Economics, Management and Accounting, Yazd University, Yazd, Iran

3 MA of Industrial Management, Faculty of Economics, Management and Accounting, Yazd University, Yazd, Iran

Abstract

Social capital has recently been noted as a main reason for economic development in every society. World Bank has termed social capital as 'the invisible wealth of a country', encapsulating all the institutions, relationships, and values which form social relationships. Analyzing the significant effect of social capital on economic development is fundamental in economic decisions. To this end, the current paper takes some variables of social capital, namely, good governance, corruption index, access to internet, and women's contribution in labor market to be compared among the countries with high social capital and those with low social capital from 1998 to 2014. The findings indicate that the countries with high social capital, indexes of good governance, access to internet, education registration rate, and women's contribution rate in the labor market have a direct significant effect on economic development; however, the corruption index has a negative effect in this regard. In countries with low social capital, the corruption index has a negative significant effect on economic development. Indexes of good governance and women's contribution rate are not significant for countries with low social capital. On the other hand, access to internet has a negative effect on economic development in countries with low social capital, while the effect of education registration has a significant positive effect.

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References

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