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Trade-offs between the benefits of social structure and the costs and constraints it produces and social capital Part of 2022 report "Exploring the limits of social capital"

The previous sections have discussed the attributes of individuals that may limit social capital. Individual attributes are important since social capital comes about primarily through the actions of individuals. However, individuals are embedded in structures that enable, constrain, and provide context for action (Cardinale 2018). Social structures such as institutions enable ordered thought, expectation, and action by imposing form and consistency on human activities (Hodgson 2006). Giddens (1984) recognised the structural constraints within which actors operate and the non-reflexive nature of must everyday practice. While social structure is essential and beneficial in many respects, it also constrains action and carries numerous costs. Social structure is central to many conceptual approaches to social capital[1], and creating, maintaining, or changing the nature of social structures are common strategies for social capital interventions. For example, the World Bank approach typically focused on establishing groups such as producer cooperatives or savings groups or strengthening existing groups.

Various aspects of social structure are components of social capital, such as networks, roles, rules, precedents, procedures, and coordinating institutions. We can create new roles, rules, institutions, laws, enforcement, etc. but does this produce more social capital? Each of these components requires investment to establish and maintain. The benefits of these investments must be balanced against their costs. Most of these components of social capital do not involve a linear relationship between investment and benefits. That is, beyond some level, further investments result in diminishing returns and may eventually become counterproductive. For example, we can create new rules in social structures to organise and facilitate social action. However, rules involve various compliance and enforcement costs and can limit innovative, creative, and problem-solving action. These considerations have been widely explored in institutional theories and provide a rich opportunity to understand the processes involved in social capital creation and maintenance. Although further discussion of this topic is beyond the scope of this article, I would encourage further work in these areas.


  1. Coleman (1990) believed that all social capital entities consist of some aspect of social structure. ^

Citing this article

This report was prepared for the Institute for Social Capital. You should reference this work as:

Claridge, T., 2022. Exploring the limits of social capital: Can social capital be continually improved or is there a maximum?. Report, Institute for Social Capital, Dunedin, New Zealand.

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