Social Capital and Civil Society

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the I11F or ThAF policy.Working Papers describe research in progress by the author( s) and are published to elicit conunents and to further debate. WP/00174Social capital is an instantiated informal norm that promotes cooperation between individuals.In the economic sphere it reduces transaction costs, and in the political sphere it promotes the kind of associational life that is necessary for the success of limited government and modern democracy.Although social capital often arises from iterated Prisoner's Dilemma games, it also is a byproduct ofre1igion, tradition, shared historical experience, and other types of cultural norms.Thus whereas awareness of social capital is often critical for understanding development, it is difficult to generate through public policy.