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Social Capital and Knowledge Sharing in Knowledge-Based Organizations: An Empirical Study

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Abstract

The study aims to understand the social and organizational factors that influence knowledge sharing. A model of knowledge management and knowledge sharing was developed inspired by the work of Nahapiet and Ghoshal. Data on KM processes and various social capital measures were collected from a sample of 262 members of a tertiary educational institution in Singapore. Rewards and incentives, open-mindedness, and cost-benefit concerns of knowledge hoarding turned out to be the strongest predictors of knowledge sharing rather than prosocial motives or organizational care. Individuals who are highly competent in their work abilities are less likely to share what they know when they perceive that there are few rewards or when sharing is not recognized by the organization. The findings provide evidence for the importance of social capital as a lubricant of knowledge sharing and engaging performance management systems in knowledge-intensive organizations.
Department o
f
Political and
Cultural Change
ZEF
Working
Paper
Series
Center for Development Research
Department of Political and Cultural Change
Research Group
Culture, Knowledge and Development
2
Social Capital and Sustainable
Development:
Theories and Concepts
Shajahan Bhuiyan and Hans-Dieter Evers
2
ZEF Working Papers Series
Department of Political and Cultural Change
Editors: H.-D. Evers, Solvay Gerke, Peter Mollinga, Conrad Schetter
Nr. 1 Evers, Hans-Dieter and Solvay Gerke (2005). Closing the Digital Divide: Southeast Asia’s
Path: Towards a Knowledge Society.
Nr. 2 Bhuiyan, Shajahan and Hans-Dieter Evers (2005). Social Capital and Sustainable
Development: Theories and Concepts.
Nr. 3 Schetter, Conrad (2005). Ethnicity and the Political Reconstruction of Afghanistan.
Nr. 4 Kassahun, Samson, Social Capital and Community Efficacy (2005). In poor localities of
Addis Ababa Ethiopia.
Nr. 5 Fuest, Veronika (2005). Policies, Practices and Outcomes of Demand-oriented Community
Water Supply in Ghana: The National Community Water and Sanitation Programme
1994 – 2004.
Nr. 6 Menkhoff, Thomas and Hans-Dieter Evers (2005). Strategic Groups in a Knowledge
Society: Knowledge Elites as Drivers of Biotechnology Development in Singapore.
Nr. 7 Mollinga, Peter P. (2005). The Water Resources Policy Process in India: Centralisation,
Polarisation and New Demands on Governance.
Nr. 8 Evers, Hans-Dieter (2005). Wissen ist Macht: Experten als Strategische Gruppe.
Nr. 8a Evers, Hans-Dieter and Solvay Gerke (2005). Knowledge is Power: Experts as Strategic
Group.
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Analyse der Praxis universitärer Forschungskooperation mit Entwicklungsländern.
Nr. 10 Laube, Wolfram (2005). Promise and Perils of Water Reform: Perspectives from Northern
Ghana.
Nr. 11 Mollinga, Peter P. (2004). Sleeping with the Enemy: Dichotomies and Polarisation in
Indian Policy Debates on the Environmental and Social Effects of Irrigation.
Nr. 12 Wall, Caleb (2006). Knowledge for Development: Local and External Knowledge in
Development Research.
Nr. 13 Laube, Wolfram and Eva Youkhana (2006). Cultural, Socio-Economic and Political Con-
straints for Virtual Water Trade: Perspectives from the Volta Basin, West Africa.
Nr. 14 Hornidge, Anna-Katharina (2006). Singapore: The Knowledge-Hub in the Straits of
Malacca.
3
Nr. 15 Evers, Hans-Dieter and Caleb Wall (2006). Knowledge Loss: Managing Local Knowledge
in Rural Uzbekistan.
Nr. 16 Youkhana, Eva, J. Lautze and B. Barry (2006). Changing Interfaces in Volta Basin Water
Management: Customary, National and Transboundary.
Nr. 17 Evers, Hans-Dieter and Solvay Gerke (2006). The Strategic Importance of the Straits of
Malacca for World Trade and Regional Development.
Nr. 18 Hornidge, Anna-Katharina (2006). Defining Knowledge in Germany and Singapore: Do
the Country-Specific Definitions of Knowledge Converge?
Authors’ address
Dr. Shahjahan H. Bhuiyan
Dept. of Politics & Public Administration, Islamic University
Kushtia – 7003, Bangladesh
Fax: +88-071-54400
e-mail: shahjahanbhuiyan@hotmail.com
Prof. Dr. Hans-Dieter Evers, Senior Fellow
Center for Development Research (ZEF), University of Bonn
Walter-Flex-Str. 3, 53113 Bonn, Germany
Tel. 0228-734909; Fax 0228-731972
e-mail: hdevers@uni-bonn.de, internet: www.uni-bonn.de/~hevers/
4
Social Capital and Sustainable Development:
Theories and Concepts
Shahjahan Hafez Bhuiyan and Hans-Dieter Evers
1. Introduction
The proliferation of research on social capital following the seminal work of Robert
Putnam (1993) has produced an impressive body of results confirming the importance of social
capital in many different domains of development. Putnam himself documented a striking
connection between membership in organisations and government quality (Glaeser, 2001:34).
The ‘rediscovery’ of social capital has seemingly provided a missing – perhaps powerful –
explanatory notion to understand development processes better and to strengthen related
policies, programmes and projects. The potential contribution of social capital, or in simple
terms civic engagement and social connectedness, to development appears to be immense, as
corroborated by rapidly growing empirical knowledge (Pantoja, 2000:1). In this connection
Putnam (1998:v) notes, “[m]uch hard evidence has accumulated that civic engagement and
social connectedness are practical preconditions for better schools, safer streets, faster
economic growth, more effective government, and even healthier and longer lives.” In the same
vein, empirical evidence shows that social capital represents a propensity for mutually beneficial
collective action, which in turn derives from the quality of relationships among people within a
particular group or community. Communities with high level of social capital produce superior
outcomes in joint actions, it is claimed; and communities with low social capital can be assisted
to build up stocks of this resource, so that their performance will also improve over time.
Economic development, community peace, and democratic participation can be promoted in this
manner, simply by investing in the stocks of social capital (Krishna, 2002:ix; Bhuiyan, 2004).
However, several scholars (e.g. Fine, 1999; 2001; Harriss, 2002) opined that the
triumphal tone encompassing the notion of social capital must be dealt with cautiously and
carefully, and the concept investigated rigorously (Pantoja, 2000). Bebbington (2004) and
Bebbington et al. (2004) observed that in recent years several efforts have been made to
‘deconstruct the modes of discursive power’ that are found within discussions of social capital
generally and of social capital and development in particular, especially at the World Bank.
These authors argued that social capital has no independent conceptual basis. It is a result
rather than a cause of institutional performance. They thus charge that any effects it might
have cannot be verified independently (Krishna, 2002:14). Relatively less hostile critics contend
that the thesis of social capital is valuable but seriously incomplete. Social capital does have
some conceptual validity and its explanatory value is partial. Rather than being the principal
cause explaining results in the economy and the polity, social capital is but one of many
independent variables (Krishna, ibid.).
There has been particular interest from policy makers who see social capital as a tool for
environmentally, socially, culturally, and economically sustainable development. Operationally
social capital and sustainable development are closely interlinked. Serageldin and Grootaert
5
(2000:40) note that social capital is best studied in the context of the contribution it makes to
sustainable development.
The purpose of this paper is to contribute to the ‘battlefield of knowledge’ by analysing
important theoretical avenues of social capital and its relations to sustainable development. This
paper is divided into five sections. The second section introduces the historical development of
the concept of social capital. In third section, we not only take care of the definitional issues of
the concept of social capital but also collate and review its relation with other forms of capital.
Critical issues of measuring social capital are also highlighted here. Section four provides
theoretical notion of sustainable development and examines its link with social capital. Section
five succinctly concludes the paper.
2. History of the notion of social capital
Social capital has been a well-loved addition to the social science vocabulary, with more
than 500,000 “hits” on the Google search engine (Kadushin, 2004:77). Since the middle of the
1990s, the concept of social capital has provoked growing interest, rivalling even globalisation
in popularity (Schuurman, 2003:991). The Social Sciences Citation Index data set (1992-2003)
shows the dramatic rise of publication of journal articles on social capital (see Figure 1).
Journal Articles on Social Capital 1992-2003
314 14 27 36 60 111 125 171 197 245 277
0
50
100
150
200
250
300
350
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: Social Science Citation Index
Despite the fact that social capital has been given a number of different definitions,
Fukuyama (2001:7) clarifies that many of them refer to manifestations of social capital rather
than to social capital itself. Nevertheless, the concept social capital refers to the internal social
and cultural coherence of society, the norms and values that govern interactions among people
and the institutions in which they are embedded. Social capital is the glue that holds societies
together and without which there cannot be any economic growth or human well-being.
Without social capital, society at large will collapse, and today’s world presents some telling
example (Serageldin, 1998:i).
6
The term social capital has found its way into economic analysis only recently, although
various elements of the concept have been present under different names for a long time.
Reviewing the concept from a historical perspective, some authors trace the root of the concept
of social capital back to the Aristotelian age where man’s behaviour was considered as a vital
force to pursue common interests. Since then a growing number of sociologists, political
scientists, economists, and organisational theorists have invoked the concept of social capital in
their search for answers to the broadening range of questions confronting their own fields.
Social capital within organisations has long been studied under the label “informal
organisation”. This lineage can be traced back to the Hawthorn studies, which mapped cliques
among workers and showed their influence on work norms and performance. The lineage of
social capital between organisations goes back to Marshall’s (1919) discussion of industrial
districts. To trace the history of the notion of social capital back before its explicit invocation
would therefore largely be to recapitulate the history of organisational research (Adler and
Kwon, 1999).
Marshall and Hicks employed the term social capital for a different purpose as early as
1890 to distinguish between temporary and permanent stocks of physical capital (Woolcock,
1998). Hanifan also used the term in 1916, described social capital in terms of “…goodwill,
fellowship, mutual sympathy and social intercourse among a group of individuals and families
who make up a social unit, the rural community… accumulation of social capital, which may
immediately satisfy ones social needs and which may bear a social potentiality sufficient to the
substantial improvement of living conditions in the whole society” (Hanifan, 1916:130).
According to Jacobs (1965), the term social capital initially appeared in community
studies, highlighting the central importance for the survival and functioning of city
neighbourhoods of the networks of strong, crosscutting personal relationships developed over
time that provide the basis for trust, cooperation, and collective action in such communities.
Over the years, social scientists have mentioned different terms during their research
that coincide with concept of social capital, i.e. through Granovetter’s (1973) “weak ties” and
Boissevain’s (1974), “friends of friends”— network through which members can gain privileged
access to information and to opportunities. Finally, as Bourdieu has suggested, significant social
capital in the form of social status or reputation can be derived from membership in specific
networks, particularly those in which such membership is relatively restricted (Bourdieu, 1986;
Burt 1992).
The historical review of the notion of social capital reveals that several factors rolled on
to shape the meaning of the concept of social capital to its present state and some of them are:
individuals, organisations, community, social structure as well as society as a whole. Most
recent research has applied the concept of social capital to a broader range of social
phenomena that includes relations inside and outside the family, relations within and beyond
the firm.
3. Social capital
Despite its current popularity, the concept of social capital does not embody any idea
really new to sociologists and political scientists. The term social capital simply recaptures an
insight present since the very beginning of the disciplines though the concept still continues to
evolve while there is no single agreed upon definition. In such context, some definitions offered
by the prominent scholars and development agencies, are presented in Box 1.
7
Box 1: Some definitions of social capital
Social capital refers to features of social organization, such as trust, norms, and networks,
that can improve the efficiency of society by facilitating coordinated actions” (Putnam,
1993:167).
“The totality of actual or potential resources related to the possession of a lasting network of
more or less institutionalised direct or indirect social relations” (Bourdieu, 1981 cited in
Schuurman, 2003:994).
“The component of human capital that allows members of a given society to trust one another
and co-operate in the formation of new groups and associations” (Coleman, 1988).
“The ability of people to work together for common purposes in groups and organizations”
(Fukuyama, 1995:10).
“The information, trust, and norms of reciprocity inhering in one’s social networks”
(Woolcock, 1998:153).
“…the institutions, relationships, and norms that shape the quality and quantity of a society’s
social interaction” (World Bank, available at: http://www.worldbank.org/poverty/scapital).
“Networks together with shared norms, values, and understanding that facilitate co-operation
within or amon
g
g
rou
p
s”
(
OECD
,
2001
)
.
Focusing on the above definitions of social capital, it reveals that Putnam takes a
somewhat different approach from his antecedents. Bourdieu, for example, sees social capital as
a benefit that accrues primarily to individuals as a result of their participation in a set of social
relationships. Bourdieu was concerned with demonstrating how class distinctions or status are
constructed, created and reproduced by the inter-connections between different spheres of
economic, political and cultural life. He was dissatisfied with a human capital explanation in the
sociology of education and considered how different types of capital, cultural, educational, and
social are converted into one another, and the attachment of such capitals to individuals and
socio-economic groupings (Bourdieu, 1986). Coleman, on the other hand, attempted to treat the
concept of social capital as similar to human and physical capital, and was narrowing the more
qualitative conceptualisation of Bourdieu. The distinctive features of Coleman’s approach are as
follows (Wilde, 2000:18):
(i) A concentration on the structural aspects of social formations that generate social capital,
although some of the characteristics of Coleman’s approach are defined by attitudinal contents,
e.g. trust, expectations, obligations, and authority;
(ii) Attention to social networks and organisations, strong and weak ties, and an emphasis on
embeddedness (retained from Granovetter, 1973); and
(iii) A zero-sum relationship between state-sponsored activities and social capital: government
involvement leads to atrophy of the informal networks of social capital (Coleman, 1990).
Putnam sees social capital as a property of communities, cities, and even nations.
Johnston and Percy-Smith (2003:324) observe that Putnam equates social capital, in practice,
with the level of associational involvement and participation that exists within a community
8
and makes the distinction between ‘bonding’ social capital — links to people ‘like me’ and
‘bridging’ social capital — links to people ‘unlike me’. In other words, the former tends “to
reinforce exclusive identities and homogenous groups,” whereas the latter is “outward looking
and encompasses people across diverse social cleavages” (Smith and Kulynych, 2002:159).
Putnam (2000:24) clarifies that these two kinds of social capital are not interchangeable and
emphasises there is no necessary relationship between a given level of either bonding or
bridging social capital and the level of the other. Table 1 summarises some key characteristics
of the concept of social capital developed by Bourdieu, Coleman and Putnam:
Table 1: The concept of social capital developed by Bourdieu, Coleman, and Putnam
Issue Bourdieu Coleman Putnam
Characteristics
‘Social obligations’ or
‘connections’.
It is accumulated,
transmitted, reproduced
and reinforced in material
and symbolic exchanges.
Economic, cultural, and
social capitals are
distinguished by their
convertibility. Social
capital always functions
as ‘symbolic capital’.
Productive, ‘actors get
things done better
reducing transaction cost.
Affected by the closure of
social networks in which
all actors interact. It is
also self-reinforcing
(resources of one relation
can be appropriated for
use in a second).
Social capital is
productive, self-
reinforcing and
cumulative.
Context-sensitive and
oriented to history. Context specific: social
capital is defined by its
nction.
fu -
Not a public good. Groups
and individuals jockey for
more favourable ‘position’,
i.e. social interest view.
Much of social capital is
a public good (except
social relations that
concentrate effective
power so that social
capital may be created for
all members of a group
concerned).
Public good
Source: Abridged from Wilde, 2000:16.
Adler and Kwon (2002:19-20) classify the afore-mentioned definitions of social capital
(Box 1 supra) into three broad types depending on whether they focus primarily on the relations
an actor maintains with other actors, or on the structure of relations within an organisation, or
allow for both viewpoints. The first group (e.g. Bourdieu) focuses primarily on social capital as a
resource facilitating action by a focal actor, a resource that inheres in the social network tying
that focal actor to other actors and the actions of individuals and groups can be greatly
facilitated by their membership in social network (see Table 1 supra). In contrast to this view,
another group (e.g. Coleman, Putnam, Fukuyama) focus on social capital as a characteristic of
the structure of the internal linkages that constitute collective actors (groups, organisations,
communities, regions, nations, etc.) as distinct from individual actors that can give these actors
cohesiveness and its associated benefits. In other words, this group included structural (e.g.
roles, rules, networks) and cognitive elements (e.g. values, norms, attitudes, beliefs, civic culture)
9
in their definitions and analysis (Uphoff, 2000). According to the third group definition, a
collective actor such as a firm is influenced both by its external linkages to other firms and
institutions and by the fabric of its internal linkages: its capacity for effective action is typically
a function of both (e.g. Woolcock, OECD).
3.1 Social capital and other forms of capital
At this point it is useful to assess the status of social capital as a form of capital. Arrow
(2000:4) opines that the term “capital” implies three aspects: (a) extension in time; (b)
deliberate sacrifice in the present for future benefit; and (c) alienability. The last is not true, as
Arrow argues, for human capital and not even entirely true for physical investment. The aspect
defined as (a) above may hold in part; building a reputation or a trust relation. But these are not
like physical investment; a little trust has not much use. But is especially (b) that fails. The
essence of social networks is that they are built up for reasons other than their economic value
to the participants. Indeed, that is what gives them their value is monitoring. Thus he (Arrow)
did not find any consensus for adding something called “social capital,” to other forms of
capital.
Adler and Kwon (2002:21-22), on the other hand, point out both similarities and
differences between social capital and other forms of capital. Regarding similarities, at first, it is
argued that like all other forms of capital, social capital is productive, making possible the
achievement of certain ends that would not be attainable in its absence (Putnam, 1993:167). It
means that social capital is a [social] resource into which other resources can be invested with
the expectation of future, albeit uncertain returns. Through investment in building their network
of external relations, both individual and collective actors can augment their social capital and
thereby gain access to information, power, and identity; and by investing in the development of
their internal relations, collective actors can strengthen their collective identity and augment
their capacity for collective action.
Second, like other forms of capital, as mentioned, social capital is both “appropriable”
(Coleman, 1988) and “convertible” (Bourdieu, 1986). Like physical capital, which can be used for
different purposes (albeit not necessarily equally efficiently), social capital is appropriable in the
sense that an actor’s network of, say, friendship ties can be used for other purposes, such as
information or advice. Moreover social capital can be converted to other kinds of capital: the
advantages conferred by one’s position in a social network can be converted to economic or
other advantages.
Third, like other forms of capital, social capital can be a substitute or a complement to
other resources. Actors, both individual and collective, can compensate for lack of financial or
human capital by superior “connections.” Social capital can more commonly be complementary
to other forms of capital. For example, social capital may improve the efficiency of economic
capital by reducing transaction costs. The similar view echoes in the following statement of
Anthony Giddens:
“Social capital refers to trust and networks that individuals can draw on for social support, just
as financial capital can be drawn upon to be used for investment. Like financial capital, social
capital can be expanded — invested and reinvested” (Giddens, 2000:78).
Fourth, like clean air and safe streets but unlike many other forms of capital, social
capital is a “collective good” in that it is not the private property of those who benefit from it
10
(Coleman, 1998). More specifically the use of social capital is non-rivalries- it does not diminish
(rather increase) with use but (unlike pure public goods) its use is excludable-others can be
excluded from a given network of relations.
Several differences have been identified between social capital and other forms of
capital from theoretical standpoint. One critical difference between human and social capital is
that one individual alone, for example in the form of education, can invest in human capital.
Social capital, on the other hand, can only be acquired by two or more people and requires a
form of cooperation between them (Grootaert, 1998). We regard this as a crucial aspect in the
definition of social capital. Portes (1998:155) observes that whereas economic capital is in
people’s bank accounts and human capital is inside their heads, social capital inheres in the
structure of their relationship. Scholars emphasise that no individual has exclusive rights to
social capital and the strength [capital] of social capital is located in the relations between
actors and not within the actor themselves (Coleman, 1988; Burt, 1992). Furthermore, when
discussing other forms of capital, costs and benefits are crucial factors. There is a growing body
of empirical work on the benefits of social capital (e.g. Krishna, 2002; Isham and Kähkönen,
1999; Cummings et al. 2003) but few data on the cost side exists. This has partly to do with the
difficulties of measuring social capital. Rationally, investments in social capital require a
comparison between costs and benefits analysis.
The foregoing discussion makes it clear that the concept of social capital cannot be
easily defined and the question is the degree to which the concept can be made operational for
the purpose of analysis. There is a lack of clarity in the research on the sources of social capital.
However, analysing the definitions of social capital presented in Box 1, one can identify several
sources of social capital such as: trust, networks, sharing information, norms, social interaction,
network ties, shared values and beliefs, and civic engagement.
3.2 Measuring social capital
Different measures of social capital have consequently been developed as analysts have
scaled social capital in different cultural settings. Putnam (2000) uses a composite indicator
containing measures of: the intensity of involvement in community and organisational life;
public engagement (e.g. voting); volunteering; informal socialising (e.g. visiting friends); and
reported levels of inter-personal trust. In our study on urban Bangladesh, we have built on
Putnam’s indicators and measured the social capital of community-based organisations
(Bhuiyan, 2005, forthcoming). Our index consists of the following variables: the frequency of
involvement in community life, public engagement (e.g. civic community activities, voting),
volunteering, informal socialising (e.g. visiting friends, neighbours); and expressed level of inter-
personal trust.
Some critics (e.g. Norris, 2000) have questioned Putnam’s mixing of associational and
trust measures on the grounds that they are in fact quite distinct dimensions of social capital,
with associational membership more important for tolerance and other indicators of social
cohesion, and trust more important for economic outcomes (PIU, 2002:14).
On the other hand, several researchers (e.g. van Deth, 2003) use a simple measure of
social capital e.g. whether people think other people can, in general, be trusted. Levels of
reported social trust vary dramatically across communities, regions, and even countries. For
example, during the 1990s, around 30 percent of people in Britain said that most people could
11
be trusted. In Scandinavian countries, the figure was around 60 percent, while in Brazil it was 3
percent (PIU, 2002:14).
In his work, Krishna (2002) provides details on several empirical studies where social
capital has been measured as an independent variable. Of them, a few are summarised in Table
2 to provide a general understanding how social capital has been measured and used in these
studies.
Table 2: Measures of social capital
Study and Locations Measurement Data Sources Dependent
Concept Variable
Narayan and Networks-based Household Household
Pritchett (1999) Multiplicative surveys income
Tanzania Index (n = 1,370)
(number of
memberships; but
also heterogeneity
and satisfaction
level).
Grootaert (1998) Networks-based Household Per capita
Indonesia Multiplicative surveys household
Index (number of (n = 1,200), expenditure.
memberships; as well community
as heterogeneity and leaders, official
range of activities). sources.
Brehm and Rahn Norms-based General Social Confidence in
(1997) interpersonal trust Survey (1972- political
United States (Combine responses 1994). institutions.
to three questions
using factor analysis).
Krishna and Uphoff Networks plus Household Village
(1999) norms. surveys development
India (n = 2,400), focus performance
groups, official
sources.
Source: Krishna, 2002: 57-59.
The overview provides for each main data collection method used in this field of
research (e.g. survey, official statistics, observation); the indicators used for various components
(e.g. networks, trust, civic engagement, norms and values) of social capital. van Deth (2003:84)
opines, as one can see from Table 2, that the selection of survey or polling methods dominates
the field. For some aspects like norms and values, as van Deth observe, this situation is self-
evident and a lot of useful information can be collected with sophisticated polling and interview
techniques. For connections and networks, it is usually difficult to observe actual relationships.
Instead of developing other approaches focusing on the structural aspects of social capital (e.g.
roles, rules, networks), many researchers seem to follow the old recommendation that asking
people is always an easy substitute for one’s own lack of ideas.
There are still many new avenues that could be explored in social capital research. The
idea that knowledge has replaced capital and labour as the major factors of production (Evers,
2003) could be used to define knowledge as social and cultural capital. The production of new
12
knowledge is, after all, based on networks of scientists as ‘communities of practice’. Research
institutions with an abundance of social capital will be most successful in knowledge creation.
Another interesting aspect is the link between social capital and sustainable
development. The following section succinctly describes the concept of sustainable development
and then examines the link.
4. Sustainable development and social capital
The conceptualisation of “sustainable development”1 has received considerable
attention from development theorists and practitioners alike because it provides a meeting
ground for the seemingly disparate notions of development and environmental conservation.
This is, in particular true from the perspective of developing countries, where trade-offs
between the above often generate policy and theoretical debate (Chopra, 2001). However, while
the concept of sustainable development provides a convenient paradigm for policy discussion,
regarding it as a theoretical approach to an alternative development model raises a variety of
issues. The first formal definition describes sustainable development as: “[meeting] the needs of
the present without compromising the ability of future generations to meet their own needs”
(Brundtland Commission, 1987:43). Almost in the same vein, from a social capital perspective,
Serageldin (1996:3) sees sustainability as: “…[is] to leave future generations as many
opportunities as we ourselves have had, if not more.” Sustainability as opportunity thus means
that future generations must be provided with as much or more capital per capita than the
current generation. The United Nations Conference on Environment and Development (the Rio
Conference, 1992) also emphasised to promote environmentally sound and sustainable
development in all countries through involvement of local organisations.
Estes (1993:3) lists a number of advantages contributed to the emergence of the
concept sustainable development in the development arena and these are: (a) provide a new
vision for national and international development; (b) unify the disparate elements that make
up the development community; (c) ease the unbearable pressure on the planet’s fragile
ecosystems in rich and poor countries alike; (d) lead to the formulation of new solutions to the
recurrent socio-economic needs of the world’s least developing countries; (e) foster significantly
improved relationships between the governmental, business and voluntary sectors; and (f)
provide greater assurance that contemporary approaches to development would not deprive
future generations of the resources needed for their development.
Scholars opined that the introduction of physical and human capital through
development interventions requires promotion of social capital if development projects are to be
effective and institutionally sustainable (Buckland, 1998:243). Existing patterns and levels of
social capital, it is argued, are likely insufficient to meet new demands resulting from the
accumulation of new economic capital. If development is to take place that is equitable,
balanced, and sustainable, then social networks and constructive normative behaviour must be
extended. To elaborate the point, the example of Grameen Bank is illustrated here.
The Grameen Bank, an organisation providing credit to the rural poor in Bangladesh, has
introduced an effective system of ensuring constructive normative behaviour among credit
recipients. The effectiveness has generally been attributed to the peer monitoring system or
1 The Swiss-based World Conservation Union (IUCN) in their report on World Conservation Strategy: Living Resource
Conservation for Sustainable Development (1980) first used the concept sustainable development. (Estes, 1993:1).
13
social collateral. This scheme creates social pressure on the borrower, lending to high repayment
rates, which is nearly 99% (Zamena, 2003). These high repayment rates thereby establish new
normative behaviour that builds trust between borrowers. Social capital is accumulated along
with the accumulation of financial and physical capital associated with bank credit (Buckland,
1998:244). The mechanism has attracted considerable attention within and outside of
Bangladesh because the beneficiaries, the rural poor were previously largely excluded from the
formal banking system, and partly because non-repayment of formal credit had become a
normative behaviour. It is, however, evidenced that Bank’s tiny credit has contributed to
improve life of millions of rural poor.
Narayan and Pritchett (1999) also provide an illustration of the link between social
capital and sustainable development. Using household survey results from rural Tanzania,
Narayan and Pritchett find that their social capital index is associated with higher reported
levels of parental participation in schools, and higher level of school quality. Villages with more
social capital were also more likely to have undertaken community road building activities, and
to have adopted more modern agricultural practices. In the same vein, Bhuiyan (2004)
concludes from his study that the urban communities of Bangladesh with a high level of social
capital are better able to organise their own system of solid waste disposal.
On the basis of their study in Central Java, Indonesia, Isham and Kähkönen (1999)
conclude that the access to community-based water projects for safe drinking water is higher in
the villages where a high level of social capital in terms of household participation in service
designs exists.
The above discussion indicates a causal link between social capital and sustainable
development. Empirical evidence suggests that the activities which foster social capital (e.g.
face-to-face communication, reciprocity, civic engagements) necessarily improves the quality of
inter-personal relationships create cooperation rather than conflict. Thus, they must reflect
community norms, have a mandate from the interest of community, use a form of organisation
that is appropriate, and enable the community’s expectations and obligations to be met
(Killerby, 2001). From the perspective of policy makers, as Killerby suggests, this means a
commitment to community development principles, including the active involvement of
communities in defining issues and problems, and in designing and implementing decisions. This
approach facilitates the transfer of skills between people, develops self-reliance in the
community, builds organisational capacity and networks, ensures local ownership of projects
and decisions, and utilises local resources to solve local problems (Chopra, 2001; Kilby, 2002;
Killerby, 2001).
5. Conclusion
The paper has attempted to highlight the issues and theories behind the concept of
social capital. In its simplest form, the idea of social capital is useful as it recognises the
importance of social interactions, which govern day-to-day lives, and improve socio-political
and economic outcomes and sustainable development. The paper also points out the link
between social capital and sustainable development from both a conceptual and an empirical
perspective.
Among social scientists, economists, and political practitioners alike, social capital is a
concept en vogue. As Narayan and Pritchett (1999:872) comment, ‘Social capital, while not all
things to all people, is many things to many people.’ Just as alchemists pursued the secrets of
14
turning base metal into gold, academics, policy makers and politicians have allegedly unpacked
the mysteries of effective communities and collectivities (Johnston and Percy-Smith, 2003:332).
Our description portrays that the popularity of the concept is partly caused by its open
and usually rather undefined character and the ease with which its meaning can be stretched.
In spite of prevailing conceptual confusions and methodological weaknesses, growing empirical
evidence suggests that social capital contributes significantly to sustainable development.
Therefore, to reap more benefit of it, we have tried to work towards a consensus on
controversial definitional issues and to develop a methodology which is capable of evaluating
the utility and explanatory power of social capital without resort to proxy data.
15
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