Social Capital - Definitions, Forms, and Measurement

Definitions, Forms, and Measurement

Social capital lends itself to multiple definitions, interpretations, and uses. David Halpern argues that the popularity of social capital for policymakers is linked to the concept's duality, coming because "it has a hard nosed economic feel while restating the importance of the social." For researchers, the term is popular partly due to the broad range of outcomes it can explain; the multiplicity of uses for social capital has led to a multiplicity of definitions. Social capital has been used at various times to explain superior managerial performance, improved performance of functionally diverse groups, the value derived from strategic alliances, and enhanced supply chain relations. 'A resource that actors derive from specific social structures and then use to pursue their interests; it is created by changes in the relationship among actors'; (Baker 1990, p. 619).

Early attempts to define social capital focused on the degree to which social capital as a resource should be used for public good or for the benefit of individuals. Putnam suggested that social capital would facilitate co-operation and mutually supportive relations in communities and nations and would therefore be a valuable means of combating many of the social disorders inherent in modern societies, for example crime. In contrast to those focusing on the individual benefit derived from the web of social relationships and ties individual actors find themselves in, attribute social capital to increased personal access to information and skill sets and enhanced power. According to this view, individuals could use social capital to further their own career prospects, rather than for the good of organisations.

In The Forms of Capital Pierre Bourdieu distinguishes between three forms of capital: economic capital, cultural capital and social capital. He defines social capital as "the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition." His treatment of the concept is instrumental, focusing on the advantages to possessors of social capital and the “deliberate construction of sociability for the purpose of creating this resource.”

James Coleman defined social capital functionally as “a variety of entities with two elements in common: they all consist of some aspect of social structure, and they facilitate certain actions of actors...within the structure”—that is, social capital is anything that facilitates individual or collective action, generated by networks of relationships, reciprocity, trust, and social norms. In Coleman's conception, social capital is a neutral resource that facilitates any manner of action, but whether society is better off as a result depends entirely on the individual uses to which it is put.

According to Robert Putnam, social capital "refers to the collective value of all 'social networks' and the inclinations that arise from these networks to do things for each other." According to Putnam and his followers, social capital is a key component to building and maintaining democracy. Putnam says that social capital is declining in the United States. This is seen in lower levels of trust in government and lower levels of civic participation. Putnam also says that television and urban sprawl have had a significant role in making America far less 'connected'. Putnam believes that social capital can be measured by the amount of trust and "reciprocity" in a community or between individuals.

Nan Lin's concept of social capital has a more individualistic approach: "Investment in social relations with expected returns in the marketplace." This may subsume the concepts of some others such as Bourdieu, Flap and Eriksson.

Newton (1997) considered social capital as subjective phenomenon formed by values and attitudes which influence interactions.

In "Social Capital and Development: The Coming Agenda," Francis Fukuyama points out that there isn't an agreed definition of social capital, so he explains it as "shared norms or values that promote social cooperation, instantiated in actual social relationships" (Fukuyama, 27), and uses this definition throughout this paper. He argues that social capital is a necessary precondition for successful development, but a strong rule of law and basic political institutions are necessary to build social capital. He believes that a strong social capital is necessary for a strong democracy and strong economic growth. Familism is a major problem of trust because it fosters a two-tiered moral system, in which a person must favor the opinions of family members. Fukuyama believes that bridging social capital (a phrase used by Putnam in Bowling Alone), is essential for a strong social capital because a broader radius of trust will enable connections across borders of all sorts and serve as a basis for organizations. Although he points out many problems and possible solutions in his paper, he does admit that there is still much to be done to build a strong social capital.

The Social Capital Foundation (TSCF) suggested that social capital should not be mixed up with its manifestations. While for example social capital is often understood as the networks that a person possesses and that he/she may use in a social integration purpose, it is more the disposition to create, maintain and develop such networks that constitutes real social capital. Similarly, civic engagement is a manifestation of social capital but not social capital itself. In this definition, social capital is a collective mental disposition close to the spirit of community.

Nahapiet and Ghoshal in their examination of the role of social capital in the creation of intellectual capital, suggest that social capital should be considered in terms of three clusters: structural, relational, and cognitive. Carlos García Timón describes that the structural dimensions of social capital relate to an individual ability to make weak and strong ties to others within a system. This dimension focuses on the advantages derived from the configuration of an actor's, either individual or collective, network. The differences between weak and strong ties are explained by Granovetter. The relational dimension focuses on the character of the connection between individuals. This is best characterized through trust of others and their cooperation and the identification an individual has within a network. Hazleton and Kennan added a third angle, that of communication. Communication is needed to access and use social capital through exchanging information, identifying problems and solutions, and managing conflict. According to Boisot and Boland and Tenkasi, meaningful communication requires at least some sharing context between the parties to such exchange. The cognitive dimension focusses on the shared meaning and understanding that individuals or groups have with one another.

Robison, Schmid, and Siles (2002) reviewed various definitions of social capital and concluded that many did not satisfy the formal requirement of a definition. They noted that definitions must be of the form A=B while many definition of social capital described what it can be used to achieve, where it resides, how it can be created, and what it can transform. In addition, they argue that many proposed definition of social capital fail to satisfy the requirements of capital. They propose that social capital be defined as the "sympathy". The object of another's sympathy has social capital. Those who have sympathy for others provide social capital. One of the main advantages of having social capital is that it provides access to resources on preferential terms. Their definition of sympathy follows that used by Adam Smith, the title of his first chapter in the "Theory of Moral Sentiments."

A network-based conception can also be used for characterizing the social capital of collectivities (such as organizations or business clusters).