Social Capital

Custom Student Mr. Teacher ENG 1001-04 2 October 2016

Social Capital

Discuss the concept “social capital” with regard to development of welfare policy in your own country. Social capital is a multidimensional concept however it has consistently emerged in the literature of theoretical and applied social sciences like economics, sociology since the mid 1990s. In fact there is no universally accepted definition of social capital. In the broadest sense, the term encompasses those social relationships that help people to get along with each other and act more effectively than they could as isolated individuals.

In this view, patterns of social organization, especially trust, mutuality, and reciprocity, are seen as important resources, which can result in benefits to individuals, groups, and society. The narrowest concept of social capital is associated with Putnam (Putnam 1993) who views it as a set of “horizontal associations” between people: social capital consists of social networks (“networks of civic engagement”) and associated norms that have an effect on the productivity of the community. Now we may describe the various dimension of social capital, such as-

Social dimension:

Based on long sociological tradition, Coleman (1988) defined social capital as inhering in the structure of inter-personal relations, yielding value by enhancing individuals’ abilities to further their interests. Social capital is embedded in society rather than in any one individual, but is given value by the individuals and organizations that use it to further their individual or collective interests. He also explicit that social capital is valuable in facilitating certain actions may be useless or even harmful for others.

Robert Putnam who drew the concept from Cloeman defined social capital as “those features of social organization such as networks, norms and social trust that that can improve the efficiency of society by facilitating coordinated actions (Puntam, 1993) or as ” features of social life- networks, norms and trust that enable participants to act together more effectively to pursue shared objectives (Puntam, 1995).

Economic dimension:

Social capital is a mechanism of economic growth. Traditionally, the concept of capital has included natural, physical—or produced—and human capital as the main building blocks of economic development and growth. It is now recognized that these three types of capital determine only part of the process of economic growth, because they overlook the way in which the economic actors interact and organize themselves to generate growth and development. The missing link, in other words, is social capital (Grootaert, 1997).

According to Uphoff (2000), social capital can be understood in terms of two distinguishable but interrelated categories: structural and cognitive. The structural category, broadly speaking, is associated with social organization of various kinds and particularly with roles and rules, while the cognitive category is based on mental processes and psychology in the domain of ideas and includes particularly norms, values, attitudes, and beliefs.

That means social capital of a society includes the institutions, the relationships, the attitudes and values that govern interactions among people and contribute to economic and social development. By the consideration of above discussion we can say that social capital is an asset, created by trust, social norms, networks, solidarity and social cohesion embedded in individuals of a community.

Social capital with regard to development of welfare policy in Bangladesh:

Bangladesh is the most vulnerable of the South Asian economies in view of its extremely high population density and high incidence of natural disaster. Poverty has been assigned as the number one problem for development of Bangladesh. Though the country is making significant progress in the socio-economic field, poverty reduction is rather slow. This is mainly because of its high population size of 130 million (population census-2001) in an area of 141,000 sq. km. Every year, about 2 millions population are adding to its population size. In that context social capital consider as a tool of implementing development of welfare policy especially for poverty reduction in Bangladesh because it effect the social and economic life of the poor people .

Different types of credit arrangements targeted at the poor rely on social ties and interactions as part of the design and implementation of their delivery and enforcement mechanisms. Poverty reduction in the 1990s was due in large part to strong, sustained economic growth, but another significant factor was government investment in the areas of health, education, social safety nets, and support for micro credit programs, which provide poor people with loans for the creation of small business enterprises. Social capital can be produced by the government (GO), non-governmental organizations (NGOs), local societal actors, and external actors in the civil society, both in combination and in isolation.

The economic role of social capital in rural Bangladesh is not only determined the households benefits but also it affects the economic performance of agro-industry enterprises. For example- rural farmers, fishermen in Bangladesh work collaboratively and establish or maintain both trust based relationships and networks in their community because every year natural calamities upset people’s lives in some part of the country. The major disasters concerned here are the occurrences of flood, cyclone and storm surge, flash flood, drought, tornado, riverbank erosion, and landslide.

These extreme natural events are termed disasters when they adversely affect the whole environment, including human beings, their shelters, or the resources essential for their livelihoods. In that perspective capacity building activities and institutional network absorbed the social capital enhanced the welfare life of rural people. Now we can discuss some major ideas that help to accumulate social capital for the development of welfare in Bangladesh.

The role of Education:

Education is a critical input to economic development, as investments in human capital are associated with higher rates of economic growth across countries. Beginning with the pioneering work of James Coleman, researchers have shown that social capital is a key input to education. Social capital provides a set of shared values and norms that support investments in education, creates ownership and involvement of communities in the educational process, and can create a safe and supportive intellectual environment in which learning can take place. But education also produces social capital, by encouraging higher levels of participation and civic engagement on the part of citizens and communities. This symbolic relationship creates the potential for a virtuous circle in development, in which social capital supports educational outcomes, which in turn create the potential for more social capital.

Pargal, Gilligan and Huq (2002) study the role of social capital in the private community-based provision of trash collection in neighborhoods in Dhaka, Bangladesh. They find that education levels (along with social capital) are strongly correlated with the existence of collective action for trash disposal. The level of household education in a neighborhood is strongly associated with the likelihood of having a voluntary solid waste management system.

This implies that investments in education are likely to have spillover effects in terms of the ability to organize for solid waste management and other forms of voluntary public goods provision. Social capital is not only a critical input to education, but is one of the important by-products of education. Education levels are an important long-run predictor of many forms of political and social engagement. In Bangladesh the large rural NGOs introduced informal primary education programs in the 1980s. This strengthening of human capital occurred as a result of spreading social capital and in turn reinforced the latter’s positive effect (Mondal, 2000).

The role Government:

The Government of Bangladesh has been pursuing a number of safety net programmes like old age allowance scheme, allowances for the distressed disabled person, allowance scheme for the widowed and distressed women, rural maintenance programme, the vulnerable group programme, food for education, female secondary stipend programme etc. These programmes have a great impact on socio-economic conditions especially for women and vulnerable group of society. It also indicates positive impacts on human capital formation. For example, Female Secondary School Stipend Assistance Project (FSSAP) and Food for Education (FED) impacted long term development by fostering human capital formation through increasing primary education rate, promoting school attendance, and reducing drop-out rates.

Therefore discrimination of women and disadvantaged group of society may graduate beyond their existing conditions and be able to sustain them above the level of extreme poverty. On the other hand ensuring participation, social inclusion and empowerment are essential for the development welfare and social capital. Like if people participate in various social and economic activities their social inclusion improves, which make them feel included in the decision making process and they feel they have control of their own life. This sense of self-determination creates empowerment. When people feel empowered they also feel secure. That means we can say that these three aspects simultaneously create social capital by utilizing the social norms, networks and trust and then use of social capital could benefit from favorable state policy.

The role non-government organizations:

The role of non- government organizations in Bangladesh is facilitating rural development and reducing poverty. Basically rural development by the NGOs has had better success in social capital formation in Bangladesh. Many community organizations in both rural and urban Bangladesh are originally based on local cooperative society. As Mondal (2000) has shown, two large NGOs in Bangladesh took the approach to organizing the rural poor (e.g., the landless, marginal and small farmers) into a large number of village organizations and primary groups to stimulate self-help activities. This cooperative collection action, as survey results reported by Mondal (2000) indicate, translated into a number of local benefits including reduced poverty rate, enhanced mutual trust and group networking, increased skill level and entrepreneurship, greater gender equality, better access to financial resources, and improvements in human rights.

This case points to a blending of social capital in and its positive effect from the organizational, communal and individual. More than three thousand national and local Non-Governmental Organizations (NGOs) constitute the creative dimension in Bangladesh’s quest for development today. Some NGOs have become household names in Bangladesh and their success story in poverty eradication and empowerment has been admired across countries such as Grameen Bank has earned international recognition for its innovative approach to rural poor, particularly women. It provides micro credit for small enterprises without collateral. Collective awareness and mobilization strategies are being offered by the NGOs, which are creating social capital. For example- The economic independence enjoyed through micro-entrepreneurship has given them a voice – not only in the family, but also in the communities and villages.

Many of the women have become socially and even politically active. In a significant departure from the past trends and established notions, last Bangladesh general election in 1996 showed women outnumbering men in casting votes in rural areas. It shows how economic emancipation can contribute to empowerment of women. The NGOs in Bangladesh generate social capital through forms of collective actions combined with communal control like maintenance of common utilities, and village defense, in which patrols are organized to protect the village from cattle stealing, robbery, and other external attacks.

For example- two renowned NGOs in Bangladesh named BRAC and PROSHIKA groups have started to own communal resources, and the need to manage them has led to the creation of local rules. For instance, when a group builds a communal fish farm, it establishes rules against fishing in the pond and penalties for those who break the rules, such as- * Catching fish freely in the communal pond is prohibited. * Cutting trees in the community forest (social forestry) especially during night is prohibited.

* Damming waterways except for agricultural purposes is prohibited. * If a person’s cattle eat another person’s rice shoots or crop saplings, as a fine of Tk. 5 to 10 is imposed depending on the type of cattle etc.

Such restrictions contribute to public morality, collective action, and communal control which is basically creates the social capital of Bangladesh.

According to Putnam and his followers, social capital is a key component to building and maintaining democracy. In the process of building democracy in the country, the Government is making use of the NGOs and their groups. A case in point is the Fair Election Monitoring Alliance (FEMA), an NGO, which was entrusted with the responsibility of submitting recommendations to reform the electoral process in order to hold free and fair elections in the country in 1997. FEMA thereafter held a series of discussions and workshops involving elections and their monitoring. Above all, they have helped to generate the social capital that makes democracy work and that lies at the heart of healthy economics. This social capital includes both formal and informal networks of trust, openness, communication and cooperation as well as shared norms, goals, beliefs, and decision-making institutions.

Finally we can say that social capital helps to eradicate the poverty and contributes development welfare policy for Bangladesh. It is greater when individuals are embedded within a dense network of social ties so that cooperation can be monitored and rewarded by others, or when there is affection amongst individuals that promotes altruism and expectations of future reciprocity.


1. Coleman, J. (1988). Social capital in the creation of human capital. American Journal of Sociology, 94: pp. 95-120.

2. Grootaert, C. (1997). “Social capital: The missing link?” In Expanding the Measure of Wealth: Indicators of Environmentally Sustainable Development. Environmentally Sustainable Development Studies and Monographs Series No. 7. Washington, DC: The World Bank.

3. Mondal, Abdul Hye. (2000) Social capital formation: The role of NGO Rural Development Programs in Bangladesh. Policy Sciences Vol. 33: 459-475.

4. Pargal, Sheoli & Gilligan, Daniel & Huq, Mainul,. (2000) Private provision of a public good – social capital and solid waste management in Dhaka, Bangladesh. Policy Research Working Paper Series 2422, The World Bank.

5. Putnam, Robert D. (1993) Making democracy work. Princeton, NJ:
Princeton University Press.

6. Putnam, R. (1995, December). Tuning in, tuning out: The strange disappearance of social capital in America. The 1995 Ithiel de Sola Pool Lecture. Political Science and Politics, pp. 664-683.

7. Uphoff, N. (2000) Understanding social capital: learning from the analysis and experiences of participation. In Dusgupta, P., and Serageldin, I (Eds.), Social Capital : A Multifaceted Perspective (pp. 215-249). The World Bank. Washington D.C.


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  • University/College: University of Arkansas System

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  • Date: 2 October 2016

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