Problems with Conceptualisation of Social Capital

As identified above, the conceptualization of social capital is the biggest challenge facing proponents of the theory. At present there is a lack of rigorous conceptualization of social capital (Krishna and Uphoff 2002^[1]). Lin, Cook et al (2001, p. 58)^[2] identified that there is a ‘danger that we may reach a point where the term might be used in whatever way it suits the purpose at hand, and thus be rendered meaningless as a scientific concept that must meet the rigorous demands of theoretical and research validity and reliability’. Fine (1999)^[3] pointed out that social capital is taking over explanations of economic development, growth, and prosperity, he also suggest that social capital had other possibilities before being turned against the other social sciences by economics (Fevre 2000^[4]).  Hean, Cowley et al (2003)^[5] made the observation that the accumulation of literature on social capital has begun to obscure the understanding of the concept. The inappropriate measurement techniques that have been implemented have caused problems for understanding social capital at the conceptual level and led to debate over whether the concept is relevant or appropriate (Stone 2001)^[6]. Or as McHugh and Prasetyo (2002, p. 1)^[7] put it, ‘the proliferation of competing definitions, analytical methods and applications associated with the term is perhaps only dwarfed in volume by the literature critical of its theoretical ambiguity, ambitious conceptual scope, and practical over-versatility’.

Glaeser, Laibson et al (2002)^[8] were very positive that economics will solve and answer problems with social capital theory, however Fukuyama (2001)^[9] was of the view that the economists’ approach to understanding how social capital is generated is ultimately very limited. Good (2000)^[10] posited that social capital theory will develop over time through debate to be more usable and measurable.

Collier (1998)^[11] provided a good starting point for conceptualization, identifying that a conceptual model for social capital should identify the concept within the complexity of the social world, as defined by dynamic relationships between its components, rather than what at present often appears to be a disparate collection of circumstantial variables. Perhaps many authors struggle with the complexity of the concept, and there is some evidence that this is the case. Paxton (1999)^[12] identified the complexity of social capital framework in terms of micro (individual), meso (group), and macro (societal) scales with the interaction of negative externalities in the form of exclusion and negative ends such as crime. Fukuyama (2001)^[9] posited that many of the characteristics of social capital are epiphenomenal, arising as a result of social capital but not constituting social capital itself. Edwards and Foley (1998)^[13] added to the complexity identifying that norms and values held by individuals become social capital only insofar as they facilitate action by others and in this respect, they are context specific; outside that situation they may be of little or no value. Another important factor is the distinction between two mechanisms through which actors pursue social capital, reciprocity transactions and enforceable trust, which are sustained by different norms and patterns of social ties among actors (Frank and Yasumoto 1998^[14]; Portes and Sensenbrenner 1993^[15]). Not only is it context specific and operates under different mechanisms, but each element bears different functional relationships to the causal factors (Johnston and Soroka 2001^[16]).

Attempting to conceptualize the concept, Grootaert and Van Bastelaer (2002)^[17] building on the work of Uphoff (2000)^[18] identify two important dimensions of social capital: level from micro to macro; and the continuum from cognitive to structural (refer to figure 8).

Figure 9 illustrates an existing conceptualization of social capital developed by Bain and Hicks (1998)^[19]. The authors roughly divide social capital into two levels: the macro and the micro. The macro level refers to the institutional context in which organizations operate while the micro level refers to the potential contribution that horizontal organizations and social networks make to development (Bain and Hicks 1998).