Social capital is a theoretical concept rather than a clearly tangible phenomenon
The term social capital first began to be defined in the 1970s and remained largely restricted to the academic world of the social sciences until the 1990s, when it suddenly emerged as a central element in public discussions and policy debates about the quality of civic culture in Western nations, especially the United States of America. At the same time it also gained a place of prominence in discussions of political and economic ‘development’ in the non-Western world by international agencies such as the World Bank. Despite this rapid ascent—becoming a key analytical concept used by academics (primarily sociologists, political scientists, and economists, but also anthropologists and historians), government policy planners, and international officials in development agencies within less than a generation—a firm definition of the term has not yet emerged, which is not surprising given that what it seeks to describe is largely intangible, diffuse, and elusive. As a result there has been a proliferation of usages, which has weakened the conceptual cogency of the term.
Broadly defined, what most authors mean in the early twenty-first century, when they write of social capital are social networks of cooperation in which people invest and from which they may ultimately derive benefits. According to most contemporary theorists of the concept, the three most important diagnostic features of such networks are social interaction, civic trust, and normative behavior. Social capital is a theoretical concept rather than a clearly tangible phenomenon. Interaction, trust, and norms are observable and even measurable phenomena, whereas social capital is not itself perceptible, and hence difficult to define. Nevertheless, the first references to the term (as opposed to a defined concept) of social capital were observational rather than theoretical.
Most studies trace the first use of the term to a 1916 academic study by Lyda Judson Hanifan, a school supervisor, on the deterioration of civic culture in rural West Virginia. The next and perhaps most influential use of the idea came with Jane Jacobs’s 1961 study of the decline of American cities, a study that was based on her close observations of the changing nature of urban communities in New York City. Both authors called attention to the features and benefits of close social communities, and hence the need to preserve them. Despite the divergent ideological lessons drawn from it, there is wide agreement about the importance of the concept in both academic and public policy circles today. However, there is no consensus on how to measure it. Unlike conventional forms of capital, social capital is primarily relational rather than material. Some economists have been skeptical about the cogency of the concept as well as about the ability of proponents of social capital to arrive at quantifiable measures. Measuring social capital has been a particularly important task because of the prominent role the concept has assumed in discourses concerning economic development in the non-Western world, where the emphasis is not on civic culture but directly on amelioration of economic and political conditions.
By bringing the social to the forefront of discussions of economic and political conditions, social capital has had an important impact on the thinking of institutions such as the World Bank about development in the non-Western world. But the application of the concept beyond the West has raised a series of important questions, the central one of which is its relationship between society and the state. Some forms of social capital have been seen as inimical to economic and political development; where states have collapsed or become oppressive and economies deteriorated, and where accordingly survival strategies have heightened the importance of social capital, the symptoms have been read as a cause of continuing economic and political failure. Many forms of social capital that appear to be negative in the context of the West, must be understood within the much different historical origins and more problematic dynamics of the relationship between state and society in many parts of the non-Western world.
Both within the West and for the non-Western world, the idea of social capital offers new ways of thinking about social problems. In particular, it offers the possibility of integrating our understandings of the social and economic; however, if not properly integrated there is a real danger of the latter merely colonizing the former, thereby reducing social interactions to sets of instrumental strategies and rational calculations. Simply because it is a relatively recent concept, it requires further elaboration and refinement, which it is already beginning to attract. Even more nuanced insights will result.