Social Capital

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SOCIAL CAPITAL AND A CASE-STUDY - THE EUROPEAN UNION

January 2006, Jabed Mustafa, Gay Lynn Voth, Miguel Viega, Ade Ajadi

Introduction - Social Capital:

Definition: Social capital is defined as those features of social structures – such as levels of interpersonal trust and norms of reciprocity and mutual aid – which act as resources for individuals and facilitate collective action (Coleman 1990; Putnam 1993). Social capital thus forms a subset of the notion of social cohesion. Social Capital considered a feature of the collective (neighborhood, community, society) to which the individual belongs.

Indicators of Social Capital:

	Levels of trust
	Perceived reciprocity
	Density of membership in civic associations

Application of Social Capital:

	Families and youth behavior
	Schooling and education
	Community life
	Work and organizations
	Democracy and governance
	Economic development
	Public health

Social Capital and Social Cohesion: These are levels of interpersonal trust, norms of reciprocity, and density of associational membership like church groups, sports groups, hobby groups, fraternal organizations, labor unions. It gives 1. Provision of social support, 2. Social influence, 3. Social engagement and attachment, 4. Access to resources and material goods. In addition, network participation provides opportunities for companionship and sociability. Lower level of social trust is associated with higher rates of most major causes of illness and stress. Socially isolated individuals are more likely to be concentrated in communities that depleted in social capital, because such places provide fewer opportunities for individuals to form local ties (Sampson 1988); (Wacquarnt and Wilson 1989).

Intervention approaches - Social Capital

	Top-down approach
	Bottom – up approach

Top – down perspective State and federal government, as well as the private sector, could do much to directly subsidize local associations that foster social capital, such as neighborhood associations, cooperative childcare, and youth organization.

From a bottom – up perspective Existing institutions (such as faith communities, trade unions, and charitable foundations) could do much to encourage voluntarism and invest in the social infrastructure of distressed neighborhoods.

Application of Social Capital – an example in Italy: American political scientist Robert Putnam in his book “Making Democracy Work (1993)” reports social capital – across the 20 regions of Italy. The purpose of his 20 year study was to attempt to explain the performance of local governments, which were introduced to Italy in 1970. Local government performance in each region of Italy was assessed by surveys, interviews, and a diverse set of policy indicators.

Putnam’s central finding was that the wide variations in the performance of regional governments were most closely related to the level of social capital in each region. In northern Italy, where citizens actively participate in civic associations – choral societies, soccer leagues, literary guilds, and the like – regional governments were “efficient in their internal operation, creative in implementing those initiatives. By contrast, in southern Italy, where patterns of civic engagement were much weaker, local government tended to be corrupt and inefficient. Putnam explained his findings in terms of the way social capital enables citizens to cooperate with each other for mutual benefit and hence overcome the dilemmas of collective action. Citizens living in areas characterized by high levels of social capital were more likely to trust their fellow citizens and to value solidarity and equality.

Social Capital and Complexity:

Pierre Bourdieu (1986) distinguished social capital from economic capital and cultural capital by defining 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". These relationships provide connections that enable individuals to do things as teams or organizations that would not be within the ability of the individual to accomplish, both in terms of effort and complexity.

Yaneer Bar-Yam (2004) argues that the paradoxes and important trade-offs of highly connected networks have been overlooked at times (15). Assertions that intercconnections are synonymous with good are too strong because they misrepresent the insight that there are a number of ways to solve complex problems. Solutions to problems in the real world must be related to the type and structure of the particular problem being addressed. To succeed, and not fail, the complexity profile of an organization must be matched with the complexity of the tasks to be performed.

The formation of the European Union represents a number of particular problems that require careful analysis and problem-solving. Wilfred Dolfsma and Charlie Dannreuther (2003) have suggested that social capital can be used to justify contradictory public policy measures. The study of the European Union as a complex system could be useful in analyzing how to appropriately draw on the resources provided by social capital.

The European Union (EU) as a Case Study

The EU is an economic bloc of independent states that has changed over almost 50 years into a large socio-economic entity which operates as a system. Its goal is an apparent integration into an homogenous socio-economic system. This assumes that integration makes it more effective in its efforts to meet its immediate and future challenges.

Our approach is designed to review the social capital properties of the EU as a complex system so that we can understand how effective it will be in using its desired integration effectively. To achieve this we conducted a literature review from which it has been apparent that there are different dynamics depending on the scale at which the EU is operating as well as viewed. We observed three levels of scale. These are the :

1) Transnational Institution level

2) National State level

3) Local Community Level

In the course of the review we have also found it useful to use three types of integration Identities defined by Helene Sjursen which are:

a) The EU as a problem solving entity emphasising economic citizenship

b) The EU has a value based community defined by cultural and social citizenship.

c) The Eu as a fight based post national union which emphasizes political citizenship

These identifications are critical to the characteristics of the EU as shown byu the recent controversy over the Treatment of Turkish application for membership. This is in contrast to the successful later application of Poland, Czech Republic and so on.

The increased complexity of the challenges and problems that the EU faces makes it imperative that it has as a transnational institutional capacity to respond effectively.

In our review we have so far found that on the transnational level it shows social capital in the way it supports and invests in poor applicants as well as members. This invesment has been effective for the developement of member economies of countries such as Ireland, Spain and Portugal. It is also tha basis of the COmmon Agricultural Policy. However this reciprocal approach suffers since the addition of 10 new members. This has increased the complexity of decision making nearly derailing the agreement of a new budget in 2005.

It is our observation that social capital works on transnational level in the EU when there is low complexity as well as high integration. This is however not the case where there is high complexity as reflected in the failure of 2 major partner members to successfully pass the referendum in support of the proposed EU constitution. This has meant that the future plan for transnational institutions are suspended.

It is also true that this principle was recognised in the treaty of Maastricht in 1993 with the inclusion of subsidiarity as a guiding policy in decision making. However the practice of increased hierarchical power in trnasnational institutions within the EU seems to undermine this.

On the national level complexity and detailed issues appear to be dealt with the flexibility and efectiveness. For example, the exemption of the UK from large parts of the EU social policy allowed it to use the inherent social capital to reestructure its economy in response to downturn in the manufacturing sector. This meant that it has avoided economic slowdown that other have suffered in recent years.

It would appear that social capital inherent in the existing relations within member States gives flexibility to address highly detailed and complex challenges.

On the local level our review identifies that social capital can be essential to maximize benefits for citizens from the EU network. This can be illustrated by the following 2 examples:

1) The EU creation of transnational spaces through the removal of the internal borders shows that between Germany and Holland it has done little to remove the borders created by suspicion and stereotypes. In fact, the village of Kranenburg in Germany, which is now home to a Dutch community because of tax opportunities, fails to integrate them. They continue to work and send their children to schools in Holland. The effect is that the full benefits of removal of internal borders is not being realized.

2) On the other hand, the removal of internal borders has complemented the social capital within the Guanxi network of inmigrant ethnic Chinese communities, so that they maximize the business opportunities presented. In fact they have created a network of transnational enclave economies through the Chinatowns that are across Europe.

Conclusion

References:

Bar-Yam, Yaneer. Making Things Work: Solving Complex Problems in a Complex World. Boston: NECSI Knowledge Press, 2004.

Berkman, Lisa F. Social Epidemiology. Ichiro Kawachi. Oxford University Press, 2000.

Bourdieu, Pierre. "The forms of capital", Handbook of Theory and Research for the Sociology of Education ed. J.G. Richardson, New York: Greenwood Press, 1986, 241-258.

Coleman, J.S. (1990). Foundations of social theory. Cambridge, MA: Harvard University Press.

Dolfsma, Wilfred and Charlie Dannreuther. "Subjects and Boundaries: Contesting Social Capital-Based Policies", Journal of Economic Issues: June 2003, Vol.37 Issue 2, 405-9.

Putnam, R.D. (1993), Making democracy work: civic traditions in modern Italy. Princeton, NJ: Princeton University Press.

Sampson, R.J. (1988). Local friendship ties and community attachment in mass society: a multilevel systemic model. Am Social Rev, 53:766-79.

Wacquant, L.J.D., and Wilson W.J. (1989). The cost of racial and class exclusion in the inner city. Ann Am Acad Polit Soc Sci, 501:8-25.