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What is Social Capital?

Supplementary resources on social capital to complement our guide to social capital.

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Social Capital in Practice

A general guide for the practical application of social capital

What is social capital?

The term “social capital” encompasses various interpretations, but fundamentally, it denotes the innate ability, capacity, and potential of individuals to engage in collaborative, positive interactions and collective efforts. At its essence, social capital is rooted in the understanding that social relationships are invaluable assets, capable of catalysing positive and productive actions while curbing counterproductive and negative behaviors. It serves as a guiding asset, directing individuals towards desired outcomes, encapsulating the fundamental proposition that ‘relationships matter’—an indispensable asset in the social fabric.

What is the logic of social capital? What is it, and what does it do?

As a form of capital, it represents a stock of future benefit. We can invest by building relationships, developing trust, creating productive social norms, and establishing effective groups and organisations. This investment creates the ability, capacity, and potential that is social capital.

The potential that we call social capital has two main components: 1) the opportunity or ability to act (stemming from connectedness), and 2) the inclination, motivation, or predisposition to act. Both are required for strong social capital. For example, a society of many virtuous but isolated individuals is not necessarily rich in social capital (as observed by Robert Putnam in his popular book Bowling Alone (2000)). Similarly, a very well-connected but highly distrusting community is also not rich in social capital.

Aspects of predispositions

The predispositions component of social capital includes people’s values, attitudes, beliefs, emotions, and understandings that influence the potential for social action and the nature of social action when it occurs. It relates to whether people are predisposed to act and the nature of action when it does occur.

Various factors, collectively called predispositions, can influence people’s values, attitudes, beliefs, emotions, and understandings. Some of the most frequently identified ones in the context of social capital include:

Aspects of connectedness

People may be predisposed to positive social action, but if people are not connected by relationships, networks, or membership in formal or informal organisations, there are limited opportunities for social action and, therefore, limited social capital. If people are not connected, then there can only be unplanned and incidental outcomes, regardless of peoples’ predispositions for social action.

Opportunities for social action come from connectedness (informal and formal) and from knowing. It is not enough to just know people. For there to be strong potential for social action, you need to know how to find or contact them and know about them, including their reputation, what they do, what they can do and know, who they know, etc.

What is low social capital?

We can easily understand what high or strong social capital is, but what is low social capital? Low social capital may occur in contexts where people are relatively disconnected – where people have small social networks and do not know many people. For example, in communities where people do not know their neighbours, have limited shared knowledge, do not know much about each other, or where there are weakly defined social norms and informal rules or expectations, we could describe it as low social capital. Low social capital represents a low potential for social action, such as cooperation and collective action.

Why should you care about social capital?

Social capital is not just a fad or a buzzword. There has been sustained and growing interest in social capital for over 30 years across all the social sciences and beyond outside of academia to applications in politics, economic development, business, public health, sustainability, disaster management, community development, and many more areas. Consideration of social capital provides substantial opportunities to improve outcomes anywhere where people work together or where cooperation and positive social action is beneficial – which is just about every human endeavour.

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