This document discusses social capital and its implications for development. It begins by defining capital and different forms of capital, including social capital. Social capital is defined as resources embedded within social networks. The document then discusses various theories of social capital proposed by scholars like Bourdieu, Coleman, Putnam and Lin. It also discusses measuring social capital through indicators like network position and resource access. The implications of social capital for development are then explored, focusing on how social networks can facilitate state and market functions to promote development. The document concludes by noting both benefits and downsides of social capital.

1. Social Capital and Its
Implications for Development
Nan Lin
Duke University
gnanlin@gmail.com
International Seminar On
9/27/2012 Social Capital and Territorial 9/22/2012 version
Development

2. Topics to be covered:
What is capital? What is social capital?
Definition and Theory of Social Capital
Measurements of social capital
Controversies and clarifications
Implications for development

3. Valued Resources
Resources valued in a society
Typical forms of resources
Economic: Wealth
Political: Power/control
Cultural: Symbolic, life style, etc.
Human: Skills, knowledge
Social: Status, reputation
Materials and technology

4. Theorization of capital
Production, reproduction and accumulation
of resources

5. Definition of Capital
1. Investing resources in production
2. Generating production-consumption gap:
“surplus”
3. Reinvesting surplus for production

6. “Capital” Theories
1。 Classical Theory: Marx
Social Relations:
Capitalists:
Labor:
Surplus value:
Capital
Investment, Re-investment

7. The Trade Market
Capitalists Commodity 1 M2 Commodity 2
The Consumption
The Production Market
Market
M1 M3
Laborers Commodity 3 M4 Commodity 4
(labor) (food, clothing,
shelter, etc.)
Sunbelt 1999
Figure 1. Rendition of Marx’ Thesis on
Production and Consumption Relations

8. Marx’ Capital:
Definition: valued resources, and
part of the surplus value,
invested and reinvested for production,
reproduction and accumulation.
Theory: exploitative social relations
between capitalists and laborers.

9. Was Marx Correct?
Yes – his definition of capital
Production and reproduction of
resources
No – his theory was not always right
Exploitative capitalists – yes
Exploited labor – not always

10. 2。 Neo-Capital Theories
Human Capital:
Investment in skills, knowledge
Neo-classical economic
theory
Cultural Capital：
Investment in normative
practices and behaviors.
“Mis-recognition of
institutions and normative
behaviors.

11. Social Capital
What is “Social”?
Coleman: elements of the social structure,
networks
Bourdieu: quality and quantity of social
ties in social networks
Putnam: voluntary associations, participation
Burt: structural holes in networks

12. Coleman: 1990
“these social-structural resources”
consisting “a variety of different
entities having two characteristics
in common: They all consist of some
aspect of a social structure, and
they facilitate certain actions of
individuals who are within the structure”
a tautological argument ?

13. Bourdieu: 1983
“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” (p. 248),
and conceives it operationally as
“the sum of resources, actual or virtual,
that accrue to an individual or group
by virtue of possessing a durable network
or more or less institutionalized
relationships of mutual acquaintance
and recognition.”

14. Putnam: 2000, p. 19
Social capital refers to connections
among individuals – social networks
and the norms of reciprocity and
trustworthiness that arise from them.
Civic virtue is most powerful when
embedded in a dense network of
reciprocal social relations.
Following Coleman, but mixing
definition with theory and never studied
social networks.

15. Burt, 1992
Structural hole
Structural constraints
Network features as social capital:
Strength of ties: Granovetter
Bridges: Burt

16. Clarification and integration:
Social capital is:
rooted precisely at the juncture
between individuals and their relations;
and is contained in the meso-level
structure or in social networks.

17. Definition of Social Capital
Resources embedded in social networks
(Lin 1982; Bourdieu 1983)

18. Definition of Social Capital
Resources embedded in social networks.
Ego Alter
Capital: economic
Social capital political,
cultural,
social, etc.

19. Social Capital is not owned by a person.
It is “borrowed” to facilitate an action.
It becomes possible because:
Maintaining social ties
Social ties have valued resources

20. Justification for Social Capital
Functions of social capital﹕
Information
Influence
Social credentials
Identity: recognition
Social integration
Entertainment, leisure
Trade, transaction

21. Relative Cumulative Effects of Social
Capital and Human Capital
Social Capital
Accu
mulat
ed Human Capital
Capit
al
Time
Figure 8.1 Accumulation Rates for Human and Social Capital

22. Social capital needs:
social ties and social networks
But it is the resources embedded in
the social ties and social networks

23. Theory of social capital:
Lin, 2001
Investment in social relations for
expected returns.

24. Primary theoretical propositions
Social capital is facilitated by:
1. Superior positions in hierarchy
2. Accessing weaker ties
3. Accessing upper positions

25. Significance of Positions in Hierarchical Structure
High
e1: ego 1
a1 a1: alter 1
e2: ego 2
a2: alter 2
Structu e1
ral
Positio
ns
a2
e2
Low
Figure 5.3 Relative Advantages of Structural Positions
for Accessing Social Capital

26. Significance of Weaker Ties
High
e: ego
a1: alter 1 (stronger tie)
a2, a3: alters 2 and 3
Struct (weaker ties)
ural
Positi
ons a2
e a1
a3
Low
Figure 5.4 Relative Advantages of Weaker Ties

27. Significance of upper reaching in hierarchy
High
e1: ego 1
a1: alter 1
e2: ego 2
a2: alter 2
Struct
e1 a1
ural
Positio e2 a2
ns
Low
Figure 5.1 Relative Effects of Social Capital

28. Investments:
social connections
embedded resources
Social capital should be conceived
within a social structure
The pyramidal hierarchy:
Quantity and quality of resources
Number of occupants

29. Indicators
Capacity:
One’s access to resources through
social connections, social networks
Example: resources among friends
and co-workers
Activation
One’s use of specific connection and
resources for a specific event or
episode
Example: using a contact to find
a job (contact resources)

30. Modeling Social Capital
Investment Social capital Returns
Structural position Instrumental returns
(wealth, power, prestige)
Network location Capacity Activation
Possessed resources Expressive returns
(psychological, physical
health)
Purpose of action
instrumental or expressive
investment

31. The Paradox of Social Capital
Homophily: Similarity in resources
General tendency of
group formation
Horizontal connections
(Example: friends)
Positive: group cohesion,
collective solidarity,
preservation of resources
Negative:
Inequality across groups
Inter-group tension and
conflict

32. Acting for Inter-group Linkage
Heterophily: Dissimilarity in resources
Extraordinary efforts
at reaching out
Vertical connections
(Example: higher-position
occupant)
Positive: Diversity in information,
and influence
Mobility and inter-group
interaction
Negative: Risk in solidarity and
in-group membership

33. Striving for a balance in vertical and
horizontal connections
Homophily: for preservations of resources
Heterophily: for gaining of resources
Heterophily promotes new and fresh information
and technology, mobility, innovation

34. Measuring Social Capital
Measuring capacity (access)
Measuring activation (use)

35. Measuring Social Capital Capacity
Objective: accessed resources through ties:
Position Generator﹕
1。 Sampling of social positions
2。 Topic neutral
3。 Relations neutral
Name Generator﹕limitations

36. Key Question
Among your relatives, friends and
acquaintances, does anyone have the
following job?
If so, what is your relation?

37. High school teacher (60) Police (40)
Electrician (36) Provincial/city office
Manager of a small firm (48) manager (55)
Nurse (54) Housemaid (22)
Provincial/city assemblyman (69) Reporter (55)
Truck driver (31) Owner of a big firm (70)
Physician (78) Lawyer (73)
Manager of a big firm (62) Guard (26)
Sampled Positions

38. Index Construction﹕
Extensity
Upper reacheability
Range

39. High
Upper reachability
Structur Extensity
al
Heterogeneity
Position
s (Range)
Low
Figure 5.2 Measures of Social Capital
Social Capital Capacity Indictors

40. Position Occupant Characteristics
Gender
Race/ethnicity
Education
Relation (direct, indirect)
Familiarity
Length of acquaintance
Etc.

41. Measuring activation of social
capital
Visible hand:
Seeking help:
Job search – job contact/helper
- contact resources
Example:
Did anyone help you in getting this job?
Who was him/her?
gender, race, occupation, etc.

42. Invisible hand: help rendered in routine
exchange
Example:
Did you receive information about any
job in casual conversations with your friends
and colleagues without your asking?
Who was he/she? (position, organization,
gender, race, etc.)

43. Inequality of Social Capital
Invisible hand more effective:
1. Better job information from
social ties in networks rich in resources.
2. Advantaged individuals have better
networks (rich in resources)
Visible hand may be necessary for some:
for those lacking rich networks.

44. Controversies
1. Is social networks per se. social capital?
2. Is trust social capital?
3. What about participation in voluntary
associations and civil
engagement ?
4. What about social relations?

45. High
Hierarc
hical
Axis
B
You
(ego)
A
Low
Figure 5.5 Structural Holes (Bridges) and Strength of Ties
(Horizontal clusters, adapted from Burt 1992 p. 27)
Effects of Social Networks and Positions,
without resource considerations

46. High
Hierarchi
cal Axis
A
You (ego)
B
Low
Figure 5.6 Differential Advantages of Structural Holes
(Bridges) and Weaker Ties in a Hierarchical Structure
Effects of Social Networks and Positions,
with resource conditions

47. Trust
1。Types of trust﹕
interpersonal trust
generalized trust
institutional trust
2。Theoretical foundations of
trust:
Networks, resources,
and participation
3。 The social nature of trust

48. Trust
1。Types of trust﹕
interpersonal trust
generalized trust
institutional trust
2。Theoretical foundations of
trust:
Networks, resources,
and participation
3。 The social nature of trust

49. Trust and social capital
Trust as an indicator of social capital?
Trust as a cause of social capital?
Trust as a consequence of social capital?
Trust as a contingent factor

50. Extending Social Capital to the
Macro-Level:
1。Articulation: social groups, associations
Coleman, Putnam
2. Confusion﹕
Causal relation
Macro-micro link
Multiple concepts
Multiple measurements
3。Research confusions

51. Micro-foundation
Micro-dynamics is fundamental:
Consistency across all capital theories
Process of capitalization explicit
Modeling the production and
returns to social capital

52. The micro-macro link
Consistency of theory and measurement
Unit of analysis:
from individuals to groups

53. Macro-extension of social capital:
social capital in organizations
Internal Social Capital:
Collective resources of
members
Resources embedded in positions
External Social Capital:
Networks of the organization
Embedded resources
in connected organizations

54. Figure: Internal and External
social capital
Internal social capita l
Focal
group External social capital

55. Extension from the meso to the macro-level:
Internal social capital
Group participation and formation:
social networks
embedded resources
External social capital
Linkages to other groups
social networks
accessed resources

56. Balancing:
In-group and between-group
homophily
In-group and between-group
heterophily
Diversity in social capital critical
for the health of groups
and community

57. Figure: layers of relations
Belonging
Bonding
Binding

58. Layers of social relations and
resources:
1. Binding relations: dense network
homophilous resources.
2. Bonding relations: mixed networks
interactive
3. Belonging relations: sparse networks
and heterophilous resources
one-to-many

59. Development and Social Capital

60. Development:
Mobilization and interaction of three
key elements
The state: rules and implementations
The markets: production, trade
and consumption
The networks: access to and use
of social capital

61. (Idealized) Model of Development: 1
Markets
State
Example: The United States, UK, etc.
The neo-classical capitalism

62. (Idealized) Model of Development: 2
State
Markets
Example: China
The centrally managed capitalism

63. (Idealized) Model of Development: 3
Networks
Markets State
Example: Taiwan?
The socially managed capitalism

64. Social Networks and Social Capital
missing in (idealized) development models
But it operates in all models of development
In the US, UK, etc.
In China, Japan, Korea
In Russia, oil-producing nations
In Brazil, Italy, etc.

65. Significance of the networks
in development
Lubrication of frictions between the
state and the markets
Reducing deviations of the
state and the markets
Coordination and reinforcement
of joint actions and functions
Balance of competition and cooperation
Concerns for equality and justice

66. Why social networks and social
capital not mentioned in development
models?

67. Dark Sides of Social Capital
Corruption and collusion
Nepotism
Disruption the markets

68. Multiple Faces of Social Capital
Voluntary associations
Multiple media
the significance of the Web
Independence of networks from
the state and the markets
Individual and group participation
and contributions

69. (Idealized) Model of Development: 3
Networks
Markets State
The hybrid capitalism

70. Current Studies
Three-society Studies
The US, China and Taiwan
2004-05, 2007-08
The institutional contingency
Home owners associations in China
Capitalism in China:
The centrally managed capitalism

71. Some publications on social capital
2001 Nan Lin Social Capital: A Theory
of Social Structure and Action
(Cambridge)
2001 Nan Lin, Karen Cook and Ron Burt, editors
Social Capital: Theory and
Research (Aldine de Gruyter)
2010 Nan Lin and Bonnie Erickson, editors
Social Capital: an International
Research Program (Oxford)
2011 Lin, Nan, editor. Social Capital:
Critical Concepts in Social
Sciences. 4 volumes. (Routledge)

72. 2013 Nan Lin, Yang-chih Fu and Chih-jou Jay Chen, editors
Social Capital and its Institutional Contingency:
A Study of the United States, Taiwan and China. (Routledge)
2011 Nan Lin “Capitalism in China: A Centrally Managed Capitalism
(CMC) and Its Future” Management and Organization Research.
7-1:63-96 (March).