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Public capital

Public capital is the aggregate body of government-owned assets that are used as a means for productivity. Such assets span a wide range including: large components such as highways, airports, roads, transit systems, and railways; local, municipal components such as public education, public hospitals, police and fire protection, prisons, and courts; and critical components including water and sewer systems, public electric and gas utilities, and telecommunications. Often, public capital is defined as government outlay, in terms of money, and as physical stock, in terms of infrastructure.

Current state in the U.S.
In 1988, the U.S. infrastructure system including all public and private non-residential capital stock was valued at $7 trillion, an immense portfolio to operate and manage. And according to the Congressional Budget Office, in 2004 the U.S. invested $400 billion in infrastructure capital across federal, state, and local levels including the private sectors on transportation networks, schools, highways, water systems, energy, and telecommunications services. While public spending on infrastructure grew by 1.7% annually between 1956 and 2004, it has remained constant as a share of GDP since early 1980s. Despite the value and investment of public capital, growing delays in air and surface transportation, aging electric grid, an untapped renewable energy sector, and inadequate school facilities all have justified additional funding in public capital investment.

The American Society of Civil Engineers have continued to give low marks, averaging a D grade, for the nation's infrastructure since its inception of the Report Card in 1998. In 2009, each category of infrastructure varied from C+ to D− grades with an estimated $2.2 trillion of needed public capital investment. The aviation sector remains mired in continued delays in the reauthorization of federal programs and an outdated air traffic control system. One in four rural bridges and one in three urban bridges are structurally deficient. States are understaffed and underfunded to conduct safety inspections of dams. Texas alone has only seven engineers and an annual budget of $435,000 to oversee more than 7,400 dams. Electricity demand outpaces energy supply transmission and generation. Almost half of the water locks maintained by the U.S. Army Corps of Engineers are functionally obsolete. Drinking water faces an annual shortfall of $11 billion to manage their aging facilities and comply with federal regulations. Leaking pipes lose an estimated 7 e9USgal of clean drinking water a day. Under tight budgets, national, state, and local parks suffer neglect. Without adequate funding, rail cannot meet future freight tonnage load. Schools require a staggering $127 billion to bring facilities to decent operating condition. Billions of gallons of untreated sewage continue to be discharged into U.S.’s surface waters each year.

Economic growth
One of the most classic macroeconomic inquiries is the effect of public capital investment on economic growth. While many analysts debate the magnitude, evidence has shown a statistically significant positive relationship between infrastructure investment and economic performance. U.S. Federal Reserve economist David Alan Aschauer asserted an increase of the public capital stock by 1% would result in an increase of the total factor productivity by 0.4%. Aschauer argues that the golden age of the 1950s and 1960s were partly due to the post-World War II substantial investment in core infrastructure (highways, mass transit, airports, water systems, electric/gas facilities). Conversely, the drop of U.S. productivity growth in the 1970s and 1980s was in response to the decrease of continual public capital investment and not the decline of technological innovation. Likewise, the European Union nations have declined public capital investment through the same years, also witnessing declining productivity growth rates. A similar situation emerges in developing nations. Analyzing OECD and non-OECD countries’ real-GDP growth rates from 1960 to 2000 with public capital as an explanatory variable (not using public investment rates), Arslanalp, Borhorst, Gupta, and Sze (2010) show that increases in the public capital stock does correlate with increases in growth. However, this relationship depends on initial levels of public capital and income levels for the country. Thus, OECD countries witness a stronger positive link in the short term while non-OECD countries experience a stronger positive link in the long term. Hence, developing countries can benefit from non-concessional foreign borrowing to finance high-prospect public capital investments.

Given this relationship of public capital and productivity, public capital becomes a third input in the standard, neoclassical production function:

 * $$\qquad\qquad Y_t = A_t * (N_t, K_t, G_t) $$

where:
 * Yt represents real aggregate output of goods and services of the private sector
 * At represents productivity factor or Hicks-Neutral technical change
 * Nt represents aggregate employment of labor services
 * Kt represents aggregate stock of nonresidential capital
 * Gt represents flow of public capital stock (assuming services of public capital are proportional to public capital)

In this form, public capital has a direct influence on productivity as a third variable. Additionally, public capital has an indirect influence on multifactor productivity as it affects the other two inputs of labor and private capital. Despite this unique nature, public capital investment, used in the production process of nearly every sector, is not sufficient on its own to generate sustained economic growth. Thus, rather than the ends, public capital is the means. That is, instead of being seen as intermediate goods used as resources by businesses, public capital should be seen as goods which are used to make the final goods and services to consumers-taxpayers. Note that public capital levels should not be too high that it leads to financing costs and high tax rates issues which will negate the positive benefits of such investments. Moreover, infrastructure services carry the market-distorting features of pure, non-rival public goods; network externalities; natural monopolies; and the common resource problem such as congestion and overuse.

Empirical models that attempt to estimate the public investment and economic growth link involve a wide variety including: the Cobb-Douglas production function; a behavioral approach cost/profit function which includes public capital stock; Vector Auto Regression (VAR) models; and government investment growth regressions. These models nonetheless contend with reverse causality, heterogeneity, endogeneity, and nonlinearities in trying to capture the public capital and economic growth link. New Keynesian models, though, analyze the effect of government spending through the supply side rather than traditional Keynesian models that analyzes it through the demand side. Therefore, a temporary surge of infrastructure investment yields an expansion of output, and vice versa that dwindling infrastructure, like in the 1970s, hamper longer-term movement in productivity. Furthermore, new research on regional growth (as opposed to national growth with GDP) shows a strong positive relationship between public capital and productivity. Both fixed costs and transport costs lower with expanded infrastructure in localities and the resulting cluster of industries. As a result, economic activity grows along its pattern of trade. Therefore, the importance of regional clusters and metropolitan economies comes into effect.

Social benefit
Beyond economic performance, public capital investment yields returns in quality of life indicators such as health, safety, recreation, aesthetics, and leisure time and activities. In example, highways provide better access and mobility for increased discretionary time and recreational outlets; mass transit can improve air quality with reduced number of private vehicles; improved municipal waste facilities reduces toxic groundwater contamination and better green space aesthetics such as parks; expanded water facilities aids in health and sanitation and environment such as reducing odor and sewer overflows. Furthermore, infrastructure adds to community ambience and quality of place with livelier downtowns, vibrant waterfronts, efficient land uses, compact spaces for commerce and recreation.

On the contrary, inadequate public capital impairs quality of life and social well-being. Over-capacity landfills lead to groundwater contamination, having deleterious effects on health. Deficient supply and quality of mass transit services impacts transit-dependents on their access to opportunity and resources. Increasing congestion in airports and roadways causes loss of discretionary time and recreational activities. The lack of efficient U.S. freight and passenger rail service will neither aid in handling the “perfect storm” of environmental and energy sustainability nor meet the global competitive need of transporting goods and services at heightened speeds and times. Also, the continued loss of footing in clean energy technology will contribute to U.S.’s future loss of prosperity on the global stage in terms of the carbon footprint and economy.

United States
Perhaps the largest contribution to the public works system in the U.S. came out of President Franklin D. Roosevelt’s New Deal initiatives particularly the creation of the Works Progress Administration (WPA) in 1935. At a time of a deep economic crisis, the WPA employed at its peak 3.35 million unemployed heads-of-households to work in rebuilding the country. The program helped construct millions of roads, bridges, parks, schools, hospitals, and levees while also providing educational programs, childcare, job training, and medical services. The overall public spending level for the program, unprecedented at the time, was $4.8 billion ($76 billion in 2008 dollars), and helped to stimulate the economy through public works projects.

Since then, the U.S. has contributed to other large infrastructure programs including the Interstate Highway System, 1956-1990, with a dedicated financing system through the gas tax and a matching contribution between federal government and states at 90% to 10%. Also, the Environmental Protection Agency's (EPA) Clean Water Act of 1972 provided a public capital investment of $40 billion in constructing and upgrading sewage treatment facilities with “significant positive impacts on the Nation’s water quality.” Considered by the National Academy of Engineering to be the greatest engineering achievement of the 20th century, the North American electric grid carries electricity over 300,000 mi on high-voltage transmission lines across the U.S. Though currently facing aging facilities and equipment, this public capital investment has ubiquitously reached millions of homes and businesses.

Recently, the American Recovery and Reinvestment Act (ARRA) is another example of large public capital investment. Of the $311 billion in appropriations, about $120 billion are set aside for crucial investment in Infrastructure and Science and Energy. Some of ARRA's aims include smart grid technology, retrofitting of homes and federal buildings, automated aviation traffic control, advancing freight and passenger rail services, and upgrading water and waste facilities.

Other countries
Worldwide, transformative public capital investments are taking place. China’s ambitious rapid high-speed rail program is estimated to extend 18,000 km by 2020. By the end of 2008, the country had a fleet of over 24,000 locomotives, the most lines in the world, the fastest express train in service, and longest high-speed track in the world. UK, Denmark, and other countries in northern Europe that surround the Baltic Sea and North Sea, continue to develop their rapid expansion of off-shore wind farms. With continued expansion of terminals and connection to nation's comprehensive transport system, the Hong Kong International Airport is one of the largest engineering and architectural projects in the world. In the last decade, Chile installed five combined cycle gas-turbined (CCGT) power plants to meet its nation's growing energy needs.

title: Public capital


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Physical capital

Physical capital represents in economics one of the three primary factors of production. Physical capital is the apparatus used to produce a good and services. Physical capital represents the tangible man-made goods that help and support the production. Inventory, cash, equipment or real estate are all examples of physical capital.

Definition
N.G. Mankiw definition from the book Economics: ''Capital is the equipment and structures used to produce goods and services. Physical capital consists of man-made goods (or input into the process of production) that assist in the production process. Cash, real estate, equipment, and inventory are examples of physical capital.'' Capital goods represents one of the key factors of corporation function. Generally, capital allows a company to preserve liquidity while growing operations, it refers to physical assets in business and the way a company have reached their physical capital. While referring how companies have obtained their capital it is important to consider both - physical capital and human capital. Based on economic theory, physical capital represents one of the three primary factors of production, that is also recognized as inputs production function. The others are natural resources (including land), and labour. The word "Physical" is used to distinguish physical capital from human capital and financial capital. "Physical capital" denote to fixed capital, all other sorts of real physical asset that are not included in the production of a product is distinguished from circulating capital.

Physical capital in accounting
Biased on the order of solvency of a physical capital, it is listed on the balance sheet. The impact of investments of human capital and physical capital can be measured and analysed with the same ratios to measure and analyse the investment performance of physical assets. Both of these investments lead to fundamental improvements in the business model and better overall decision-making. The balance sheet provides an overview, which consist of both physical and human capital, of the value of all physical and some non-physical assets, but it also provides an overview of the capital raised to pay for those assets. Physical capital is noted on the balance sheet as an asset at historical cost, not market value. As a result, the book value of assets is generally higher than market value. Accountants refer to physical capital as a tangible asset. Compering the physical capital and human capital is easy to find on the balance, but the human capital is often only assumed. In addition to goodwill, analysts can value the impact of human capital on operations with efficiency ratios, such as return on assets (ROA) and return on equity (ROE). The value of human capital can be also determined by the investors in the mark-up on products sold or the industry premium on salary, for instance a company is willing to pay more for an experienced programmer who can produce a higher-margin product. In this case the value of the programmer's experience is the amount the company is willing to pay over and above the market price.

Production function
Production function definition by N.G. Mankiw: Production function is the relationship between the quantity of inputs used to make a good and the quantity of output of that good.

Co-operation of four factors of production capital, land, labor and organization crates the result in production of goods, biased on this fact no goods can be produced without the help of these four factors, actually all four are usually used in some technical proportion, with the aim to maximize profit with a minimal cost by the best combination of factors of production. Best combination for producer is enabled by applying the principles of equip-marginal returns and substitution. The principle of equip-marginal returns states that, any producer can have maximum production only when the marginal returns of all the factors of production are equal. For instance, when the marginal product of the land is equal to that of labour, capital and organisation, the production becomes maximum. Production function shoes how much output producer can expect in exact proportion of labour and capital as well as of labour etc. Differently, production function is an indicator of the physical relationship between the inputs and output of a firm. Like the demand function a production function is for a definite period. It shows the flow of inputs resulting into a flow of output during some time. The production function of a firm depends on the state of technology. With every development in technology the production function of the firm undergoes a change. The new production function brought about by developing technology displays same inputs and more output or the same output with lesser inputs. Sometimes a new production function of the firm may be adverse as it takes more inputs to produce the same output. Mathematical description of basic relationship between inputs and outputs:

Q = f (L, C, N) Q = Quantity of output L = Labour C = Capital N = Land

The level of output (Q) depends on the quantities of different inputs (L, C, N) available to the firm. In the simplest case, where there are only two inputs, labour (L) and capital (C) and one output (Q), the production function becomes. Q =f (L, C) The production function is a technical or engineering relation between input and output. If the natural laws of technology remain unchanged, the production function remains unchanged.

Features of production function
The production function consists of 3 main features – Substitutability, Complementarity and Specificity. 1. Substitutability: By changing the number and amount of some inputs, while the others stay unchanged, we achieve the possibility, to modify the total output. It is the substitutability of the factors of production that gives rise to the laws of variable proportions. 2. Complementarity: is that two or more inputs are to be used together as nothing will be produced if the quantity of either of the inputs used in the production process is zero. Another example of complementarity is the principles of returns to scale of inputs as it reveals that the quantity of all inputs has to increased simultaneously in order to attain a higher scale of total output. 3. Specificity: Every product has its own specific number and type of inputs. Machines and equipment's, specialized workers and raw materials or commodities are a few examples of the specificity of factors of production. This reveals that in the production process none of the factors can be ignored and in some cases ignorance to even slightest extent is not possible if the factors are perfectly specific. Production consists of time; hence, the way the inputs are combined is determined to a large extent by the time period under consideration. The greater the time period, the greater the freedom the producer must vary the quantities of various inputs used in the production process. In the production function, variation in total output by varying the quantities of all inputs is possible only in the long run whereas the variation in total output by varying the quantity of single input may be possible even in the short run.

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/

title: Physical capital


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Social capital

Social capital is "the networks of relationships among people who live and work in a particular society, enabling that society to function effectively". It involves the effective functioning of social groups through interpersonal relationships, a shared sense of identity, a shared understanding, shared norms, shared values, trust, cooperation, and reciprocity. Some have described it as a form of capital that produces public goods for a common purpose, although this does not align with how it has been measured.

Social capital has been used to explain the improved performance of diverse groups, the growth of entrepreneurial firms, superior managerial performance, enhanced supply chain relations, the value derived from strategic alliances, and the evolution of communities.

History
While it has been suggested that the term social capital was in intermittent use from about 1890, before becoming widely used in the late 1990s, the earliest credited use is by Lyda Hanifan in 1916 (see 20th century below).

The debate of community versus modernization of society and individualism has been the most discussed topic among the founders of sociology: such theorists as Tönnies (1887), Durkheim (1893), Simmel (1905), Weber (1946) were convinced that industrialisation and urbanization were transforming social relationships in an irreversible way. They observed a breakdown of traditional bonds and the progressive development of anomie and alienation in society.

18th–19th century
The power of community governance has been stressed by many philosophers from antiquity to the 18th century, from Aristotle to Thomas Aquinas, and Edmund Burke. This vision was strongly criticised at the end of the 18th century, with the development of the idea of Homo Economicus and subsequently with rational choice theory. Such a set of theories became dominant in the last centuries, but many thinkers questioned the complicated relationship between modern society and the importance of old institutions, in particular family and traditional communities.

The concept that underlies social capital has a much longer history; thinkers exploring the relation between associational life and democracy were using similar concepts regularly by the 19th century, drawing on the work of earlier writers such as James Madison (The Federalist Papers) and Alexis de Tocqueville (Democracy in America) to integrate concepts of social cohesion and connectedness into the pluralist tradition in American political science. John Dewey may have made the first direct mainstream use of social capital in The School and Society in 1899, though he did not offer a definition.

In the first half of the 19th century, de Tocqueville had observations about American life that seemed to outline and define social capital. He observed that Americans were prone to meeting at as many gatherings as possible to discuss all possible issues of state, economics, or the world that could be witnessed. The high levels of transparency caused greater participation from the people and thus allowed for democracy to work better.

20th century
L. J. Hanifan's 1916 article regarding local support for rural schools is one of the first occurrences of the term social capital in reference to social cohesion and personal investment in the community. In defining the concept, Hanifan contrasts social capital with material goods by defining it as: I do not refer to real estate, or to personal property or to cold cash, but rather to that in life which tends to make these tangible substances count for most in the daily lives of people, namely, goodwill, fellowship, mutual sympathy and social intercourse among a group of individuals and families who make up a social unit.… If he may come into contact with his neighbour, and they with other neighbours, there will be an accumulation of social capital, which may immediately satisfy his social needs and which may bear a social potentiality sufficient to the substantial improvement of living conditions in the whole community. The community as a whole will benefit by the cooperation of all its parts, while the individual will find in his associations the advantages of the help, the sympathy, and the fellowship of his neighbours. Following the works of Tönnies (1887) and Weber (1946), reflection on social links in modern society continued with interesting contributions in the 1950s and in the 1960s. In particular, mass society theory – as developed by Daniel Bell (1962), Robert Nisbet (1969), Maurice R. Stein (1960), William H. Whyte (1956) – proposed themes similar to those of the founders, with a more pessimistic emphasis on the development of society. In the words of Stein (1960:1): "The price for maintaining a society that encourages cultural differentiation and experimentation is unquestionably the acceptance of a certain amount of disorganization on both the individual and social level."

Jane Jacobs used the term early in the 1960s. Although she did not explicitly define the term social capital, her usage referred to the value of networks. Political scientist Robert Salisbury advanced the term as a critical component of interest group formation in his 1969 article "An Exchange Theory of Interest Groups" in the Midwest Journal of Political Science.

Sociologist Pierre Bourdieu used the term in 1972 in his Outline of a Theory of Practice, and clarified the term some years later in contrast to cultural, economic, administrative capital, physical capital, political capital, social capital and symbolic capital. Sociologists James Coleman (1988), as well as Barry Wellman & Scot Wortley (1990), adopted Glenn Loury's 1977 definition in developing and popularising the concept. In the late 1990s, the concept gained popularity, serving as the focus of a World Bank research programme and the subject of several mainstream books, including Robert Putnam's Bowling Alone, and Putnam & Lewis Feldstein's Better Together.

All of these reflections contributed remarkably to the development of the social capital concept in the following decades. The appearance of the modern social capital conceptualization is a new way to look at this debate, keeping together the importance of community to build generalized trust and the same time, the importance of individual free choice, in order to create a more cohesive society. It is for this reason that social capital generated so much interest in the academic and political world.

Definitions and forms
Social capital has multiple definitions, interpretations, and uses. David Halpern argues that the popularity of social capital for policymakers is linked to the concept's duality, coming because "it has a hard nosed economic feel while restating the importance of the social." For researchers, the term is popular partly due to the broad range of outcomes it can explain; the multiplicity of uses for social capital has led to a multiplicity of definitions.

Social capital has been used at various times to explain superior managerial performance, the growth of entrepreneurial firms, improved performance of functionally diverse groups, the value derived from strategic alliances, and enhanced supply-chain relations. "A resource that actors derive from specific social structures and then use to pursue their interests; it is created by changes in the relationship among actors" (Baker 1990, p. 619).

Early attempts to define social capital focused on the degree to which social capital serves as a resource – be it for public good or private benefit. Robert D. Putnam (1993) suggested that social capital would facilitate co-operation and mutually supportive relations in communities and nations and would therefore be a valuable means of combating many of the social disorders inherent in modern societies, for example crime. In contrast, others focus on the private benefits derived from the web of social relationships in which individual actors find themselves. This is reflected in Nan Lin's concept of social capital as "Investment in social relations with expected returns in the marketplace." This may subsume the concepts of some others such as Bourdieu, Flap and Eriksson. Newton (1997) treats social capital as a subjective phenomenon formed by values and attitudes that influence interactions. Nahapiet and Ghoshal (1998), in their examination of the role of social capital in the creation of intellectual capital, suggest that social capital should be considered in terms of three clusters: structural, relational, and cognitive.

Definitional issues
A number of scholars have raised concerns about the imprecision in defining social capital. Portes (2000), for example, notes that the term has become so widely used, including in mainstream media, that "the point is approaching at which social capital comes to be applied to so many events and in so many different contexts as to lose any distinct meaning." The term capital is used by analogy with other forms of economic capital, as social capital is argued to have similar (although less measurable) benefits. However, the analogy may be misleading in that, unlike financial forms of capital, social capital is not depleted by use; instead, it is depleted by non-use (use it or lose it). In this respect, it is similar to the economic concept of human capital.

Robison, Schmid, and Siles (2002) review various definitions of social capital and conclude that many do not satisfy the formal requirements of a definition. They assert that definitions must be of the form A=B, while many explanations of social capital describe what it can be used to achieve, where it resides, how it can be created, or what it can transform. In addition, they argue that many proposed definitions of social capital fail to satisfy the requirements of capital. They propose that social capital be defined as sympathy: the object of another's sympathy has social capital; those who have sympathy for others provide social capital. This proposition appears to follow Adam Smith, Theory of Moral Sentiments to some degree, but Smith's conceptualization of sympathy (particularly in the first two chapters of this work) appear more concerned with the roles of acceptance or congruence – in ethics or virtue – in evaluating an individual's 'propriety of action'.

Social capital is different from the economic theory of social capitalism, which challenges the idea that socialism and capitalism are mutually exclusive.

Forms of capital (Bourdieu)
In The Forms of Capital, Pierre Bourdieu distinguishes between three forms of capital: economic capital, cultural capital and social capital. He defines 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." His treatment of the concept is instrumental, focusing on the advantages to possessors of social capital and the "deliberate construction of sociability for the purpose of creating this resource." Quite contrary to Putnam's positive view of social capital, Bourdieu employs the concept to demonstrate a mechanism for the generational reproduction of inequality. Bourdieu thus points out that the wealthy and powerful use their "old boys network" or other social capital to maintain advantages for themselves, their social class, and their children.

Norms of trust and reciprocity (Sander, Putnam, Coleman)
Thomas Sander defines it as "the collective value of all social networks (who people know), and the inclinations that arise from these networks to do things for each other (norms of reciprocity)." Social capital, in this view, emphasizes "specific benefits that flow from the trust, reciprocity, information, and cooperation associated with social networks." It "creates value for the people who are connected, and for bystanders as well." Meanwhile, negative norms of reciprocity serve as disincentives for detrimental and violent behaviors.

James Coleman defined social capital functionally as "a variety of entities with two elements in common: they all consist of some aspect of social structure, and they facilitate certain actions of actors...within the structure" – that is, social capital is anything that facilitates individual or collective action, generated by networks of relationships, reciprocity, trust, and social norms. In Coleman's conception, social capital is a neutral resource that facilitates any manner of action, but whether society is better off as a result depends entirely on the individual uses to which it is put.

According to Robert D. Putnam, social capital refers to "connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them." In the view of Putnam and his followers, social capital is a key component to building and maintaining democracy. Putnam says that social capital is declining in the United States. This is seen in lower levels of trust in government and lower levels of civic participation. He also says that television and urban sprawl have had a significant role in making America far less 'connected'. Putnam believes that social capital can be measured by the amount of trust and "reciprocity" in a community or between individuals. Putnam also suggests that a root cause of the decline in social capital is women's entry into the workforce, which could correlate with time restraints that inhibit civic organizational involvement like parent-teacher associations. Technological transformation of leisure (e.g., television) is another cause of declining social capital, as stated by Putnam. This offered a reference point from which several studies assessed social capital measurements by how media is engaged strategically to build social capital.

Civic association (Fukuyama)
In "Social Capital, Civil Society, and Development", political economist Francis Fukuyama defines social capital as generally understood rules that enable people to cooperate such as the norm of reciprocity or religious doctrine like Christianity. Social capital is formed by repeated interactions over time and, he argues, is critical for development and difficult to generate through public policy. The importance of social capital for economic development is that these norms of behavior reduce transaction cost of exchange such as legal contracts and government regulations. Fukuyama suggests that while social capital is beneficial for development, it also imposes cost on non-group members with unintended consequences for general welfare.

Referencing Alexis de Tocqueville in Democracy in America, and what he described as the art of association of the American propensity for civil association, Fukuyama argues social capital is what produces a civil society. While civic engagement is an important part of democracy and development, Fukuyama states that, "one person's civic engagement is another's rent-seeking." Therefore, while social capital can facilitate economic development by reducing transaction cost and increasing productivity, social capital can also distort democracy if civic association enables special interest to gain special favors. However, Fukuyama argues despite the risk of society having too much social capital, it is nonetheless worse to have too little and be unable to organize for public goods and welfare enhancing activity.

Social ties
Carlos García Timón describes that the structural dimensions of social capital relate to an individual ability to make weak and strong ties to others within a system. This dimension focuses on the advantages derived from the configuration of an actor's, either individual or collective, network. The differences between weak and strong ties are explained by Granovetter (1973). Bridging social capital refers to the weak ties that individuals with heterogeneous limited interactions form. Bridging social capital is more likely to provide valuable new information (Moshkovitz and Hayat, 2021). Some others describes the weak and strong ties relationship as bonding and bridging social capital. Bonding social capital refers to strong ties: the intimate relationships people feel close to and trust. The relational dimension focuses on the character of the connection between individuals. This is best characterized through trust of others and their cooperation and the identification an individual has within a network. Hazleton and Kennan (2000) added a third angle, that of communication. Communication is needed to access and use social capital through exchanging information, identifying problems and solutions, and managing conflict.

According to Boisot (1995), and Boland & Tenkasi (1995), meaningful communication requires at least some sharing context between the parties to such exchange. The cognitive dimension focuses on the shared meaning, representations and interpretations that individuals or groups have with one another.

Negative social capital
Whereas some scholars, most prominently Robert D. Putnam, posit that social capital has positive ends, a sizable body of literature finds that social capital can have adverse effects. Research by Sheri Berman and Dylan Riley, as well as economists Shanker Satyanath, Nico Voigtländer, and Hans-Joachim Voth, have linked civic associations to the rise of fascist movements. Pierre Bourdieu's work tends to show how social capital can be used practically to produce or reproduce inequality, demonstrating for instance how people gain access to powerful positions through the direct and indirect employment of social connections.

An example of the complexities of the effects of negative social capital is violence or criminal gang activity that is encouraged through the strengthening of intra-group relationships (bonding social capital). The negative consequences of social capital are more often associated with bonding vis-à-vis bridging.

Without "bridging" social capital, "bonding" groups can become isolated and disenfranchised from the rest of society and, most importantly, from groups with which bridging must occur in order to denote an "increase" in social capital. Bonding social capital is a necessary antecedent for the development of the more powerful form of bridging social capital. Bonding and bridging social capital can work together productively if in balance, or they may work against each other. As social capital bonds and stronger homogeneous groups form, the likelihood of bridging social capital is attenuated. Bonding social capital can also perpetuate sentiments of a certain group, allowing for the bonding of certain individuals together upon a common radical ideal. The strengthening of insular ties can lead to a variety of effects such as ethnic marginalization or social isolation. In extreme cases ethnic cleansing may result if the relationship between different groups is so strongly negative. In mild cases, it isolates certain communities such as suburbs of cities because of the bonding social capital and the fact that people in these communities spend so much time away from places that build bridging social capital.

Accessibility
Edwards and Foley, as editors of a special edition of the American Behavioral Scientist on "Social Capital, Civil Society and Contemporary Democracy", raised two key issues in the study of social capital. First, social capital is not equally available to all, in much the same way that other forms of capital are differently available. Geographic and social isolation limit access to this resource. Second, not all social capital is created equally. The value of a specific source of social capital depends in no small part on the socio-economic position of the source with society.

On top of this, Portes (1998) has identified four negative consequences of social capital:

 * 1) exclusion of outsiders;
 * 2) excess claims on group members;
 * 3) restrictions on individual freedom; and
 * 4) downward levelling norms.

In political institutions
Social capital (in the institutional Robert Putnam sense) may also lead to bad outcomes if the political institution and democracy in a specific country is not strong enough and is therefore overpowered by the social capital groups. "Civil society and the collapse of the Weimar Republic" suggests that "it was weak political institutionalization rather than a weak civil society that was Germany's main problem during the Wihelmine and Weimar eras." Because the political institutions were so weak people looked to other outlets. "Germans threw themselves into their clubs, voluntary associations, and professional organizations out of frustration with the failures of the national government and political parties, thereby helping to undermine the Weimar Republic and facilitate Hitler's rise to power." In this article about the fall of the Weimar Republic, the author makes the claim that Hitler rose to power so quickly because he was able to mobilize the groups towards one common goal. Even though German society was, at the time, a "joining" society these groups were fragmented and their members did not use the skills they learned in their club associations to better their society, but to encourage their values across all cultures to provide a better society for people. They were very introverted in the Weimar Republic. Hitler was able to capitalize on this by uniting these highly bonded groups under the common cause of bringing Germany to the top of world politics. The former world order had been destroyed during World War I, and Hitler believed that Germany had the right and the will to become a dominant global power.

Additionally, in his essay "A Criticism of Putnam's Theory of Social Capital", Michael Shindler expands upon Berman's argument that Weimar social clubs and similar associations in countries that did not develop democracy, were organized in such a way that they fostered a "we" instead of an "I" mentality among their members, by arguing that groups which possess cultures that stress solidarity over individuality, even ones that are "horizontally" structured and which were also common to pre-Soviet Eastern Europe, will not engender democracy if they are politically aligned with non-democratic ideologies.

In race and ethnicity
Using a network-based conception for characterizing the social capital of collectivities (such as organizations or business clusters), Lester, Maheshwari, and McLain (2013) note that negative social capital may be the cause for disadvantageous differences among minority firms versus majority firms. While studying norms among African-American family firms and Euro-American family firms, Lester et al. noted that negative social capital was created when the owner of the company was pressured to engage in social behavior not conducive to firm profits.

Robert Putnam, in his later work, also suggests that social capital, and the associated growth of public trust are inhibited by immigration and rising racial diversity in communities. Putnam's study regarding the issue argued that in American areas with a lack of homogeneity, some individuals neither participated in bonding nor bridging social capital. In societies where immigration is high (US) or where ethnic heterogeneity is high (Eastern Europe), it was found that citizens lacked in both kinds of social capital and were overall far less trusting of others than members of homogenous communities were found to be. Lack of homogeneity led to people withdrawing from even their closest groups and relationships, creating an atomized society as opposed to a cohesive community. These findings challenge previous beliefs that exposure to diversity strengthens social capital, either through bridging social gaps between ethnicities or strengthening in-group bonds. It is very important for policy makers to monitor the level of perceived socio-economic threat from immigrants because negative attitudes towards immigrants make integration difficult and affect social capital.

Varshney (2001) studied the correlation between the presence of interethnic networks (bridging) versus intra-ethnic ones (bonding) on ethnic violence in India. He argues that interethnic networks are agents of peace because they build bridges and manage tensions, by noting that if communities are organized only along intra-ethnic lines and the interconnections with other communities are very weak or even nonexistent, then ethnic violence is quite likely. Three main implications of intercommunal ties explain their worth:
 * 1) Facilitate communication in the community across ethnic lines
 * 2) Squelch false rumors
 * 3) Help the administration carry out its job and in particular peace, security and justice

This is a useful distinction; nevertheless, its implication on social capital can only be accepted if one espouses the functionalist understanding of the latter concept. Indeed, it can be argued that interethnic, as well as intra-ethnic networks can serve various purposes, either increasing or diminishing social capital. In fact, Varshney himself notes that intra-ethnic policing (equivalent to the "self-policing" mechanism proposed by Fearon and Laitin, 1996) may lead to the same result as interethnic engagement.

Social inequality
James Coleman (1988) has indicated that social capital eventually led to the creation of human capital for the future generation. Human capital, a private resource, could be accessed through what the previous generation accumulated through social capital. John Field (2003) suggested that such a process could lead to the very inequality social capital attempts to resolve. While Coleman viewed social capital as a relatively neutral resource, he did not deny the class reproduction that could result from accessing such capital, given that individuals worked toward their own benefit.

Even though Coleman never truly addresses Pierre Bourdieu in his discussion, this coincides with Bourdieu's argument set forth in Reproduction in Education, Society and Culture. Bourdieu and Coleman were fundamentally different at the theoretical level (as Bourdieu believed the actions of individuals were rarely ever conscious, but more so only a result of their habitus being enacted within a particular field, but this realization by both seems to undeniably connect their understanding of the more latent aspects of social capital.

According to Bourdieu, habitus refers to the social context within which a social actor is socialized. Thus, it is the social platform, itself, that equips one with the social reality they become accustomed to. Out of habitus comes field, the manner in which one integrates and displays their habitus. To this end, it is the social exchange and interaction between two or more social actors. To illustrate this, we assume that an individual wishes to better his place in society. He therefore accumulates social capital by involving himself in a social network, adhering to the norms of that group, allowing him to later access the resources (e.g. social relationships) gained over time. If, in the case of education, he uses these resources to better his educational outcomes, thereby enabling him to become socially mobile, he effectively has worked to reiterate and reproduce the stratification of society, as social capital has done little to alleviate the system as a whole. This may be one negative aspect of social capital, but seems to be an inevitable one in and of itself, as are all forms of capital.

Positive consequences of social capital
Compared to Bourdieu, Robert D. Putnam has used the concept in a much more positive light: though he was at first careful to argue that social capital was a neutral term, stating "whether or not [the] shared are praiseworthy is, of course, entirely another matter," his work on American society tends to frame social capital as a producer of "civic engagement" and also a broad societal measure of communal health. He also transforms social capital from a resource possessed by individuals to an attribute of collectives, focusing on norms and trust as producers of social capital to the exclusion of networks.

Mahyar Arefi (2003) identifies consensus-building as a direct positive indicator of social capital. Consensus implies "shared interest" and agreement among various actors and stakeholders to induce collective action. Collective action is thus an indicator of increased social capital.

Bonding, bridging, linking
In Bowling Alone: The Collapse and Revival of American Community (2000), Harvard political scientist Robert D. Putnam writes: "Henry Ward Beecher's advice a century ago to 'multiply picnics' is not entirely ridiculous today. We should do this, ironically, not because it will be good for America – though it will be – but because it will be good for us."Putnam speaks of two main components of the concept, the creation of which Putnam credits to Ross Gittell and Avis Vidal:

 * 1) Bonding social capital: the value assigned to social networks between homogeneous groups of people.
 * 2) Bridging social capital: the value assigned to social networks between socially heterogeneous groups.

Typical examples are that criminal gangs create bonding social capital, while choirs and bowling clubs (hence the title, as Putnam lamented their decline) create bridging social capital. The distinction is useful in highlighting how social capital may not always be beneficial for society as a whole (though it is always an asset for those individuals and groups involved). Horizontal networks of individual citizens and groups that enhance community productivity and cohesion are said to be positive social capital assets whereas self-serving exclusive gangs and hierarchical patronage systems that operate at cross purposes to societal interests can be thought of as negative social capital burdens on society.

Similar to Putnam, Daniel P. Aldrich describes three mechanisms of social capital:

 * 1) Bonding capital: the relationships a person has with friends and family, making it also the strongest form of social capital.
 * 2) Bridging capital: the relationship between friends of friends, making its strength secondary to bonding capital.
 * 3) Linking capital: the relationship between a person and a government official or other elected leader.

Aldrich also applies the ideas of social capital to the fundamental principles of disaster recovery, and discusses factors that either aid or impede recovery, such as extent of damage, population density, quality of government and aid. In his book Building Resilience: Social Capital in Post-Disaster Recovery, he primarily examines Japanese recovery following the 2011 Fukushima nuclear meltdown.

Social capital development on the internet via social networking websites such as Facebook or Myspace tends to be bridging capital according to one study, though "virtual" social capital is a new area of research.

Consummatory, instrumental
There are two other sub-sources of social capital:

 * 1) Consummatory capital: a behavior that is made up of actions that fulfill a basis of doing what is inherent.
 * 2) * Examples include value interjection and solidarity.
 * 3) Instrumental capital: behavior that is taught through ones surroundings over time.

Consummatory capital
Consummatory capital a behavior that is made up of actions that fulfill a basis of doing what is inherent. Two examples of consummatory social capital are value interjection and solidarity.

Value interjection: refers to the behavior of individuals or groups adhering to societal norms by meeting expected obligations, such as following established rules, timely bill payments, and punctuality. Diligent adherence contributes personal advantages like financial stability and improved relationships, as well as broader societal gains, including enhanced market confidence and perceived reliability.

Coleman goes on to say that when people live in this way and benefit from this type of social capital, individuals in the society are able to rest assured that their belongings and family will be safe. This understanding of solidarity may be traced to 19th century socialist thinkers, whose main focus was the urban working class of the Industrial Revolution. They analyzed the reasons these workers supported each other for the benefit of the group and held that this support was an adaptation to the immediate social environment, as opposed to a trait that had been taught to the workers in their youth. As another example, Coleman states that possessing this type of social capital individuals to stand up for what they believe in, and even die for it, in the face of adversity.

While the notion of solidarity as social capital is sometimes attributed to Karl Marx, in particular, the term social capital had a quite different meaning for Marx. All forms of "capital" were, for Marx, possessed only by capitalists and he emphasized the basis of labour in capitalist society, as a class constituted by individuals obliged to sell their labour power, because they lacked sufficient capital, in any sense of the word, to do otherwise. Marx saw "social capital" as a theoretical total amount of capital, purely in the sense of accumulated wealth or property, that existed in a particular society. He thereby contrasted it with specific and discrete "individual capital."

Instrumental capital
Instrumental capital is behavior that is taught through one's surroundings over time. Individuals donating their resources are not seeking direct repayment from the recipient, but motivated by membership in the same social structure. Donors might not see a direct repayment, but, most commonly, they will be held by the society in greater honor.

Portes mentions the donation of a scholarship to a member of the same ethnic group as an example of this. The donor is not giving up resources to be directly repaid by the recipient, but, as stated above, the honor of the community. With this in mind, recipients might not know the benefactor personally, but prospers as a member of the same social group.

Social capital is also linked with religious communities. Religion represents an important aspect of social capital (religious social capital).

Measurement
There is no widely held consensus on how to measure social capital, which has become a debate in itself. While usually one can intuitively sense the level/amount of social capital present in a given relationship (regardless of type or scale), quantitative measuring has proven somewhat complicated, resulting in different metrics for different functions.

Sociologists Carl L. Bankston and Min Zhou have argued that one of the reasons social capital is so difficult to measure is that it is neither an individual-level nor a group-level phenomenon, but one that emerges across levels of analysis as individuals participate in groups. They argue that the metaphor of "capital" may be misleading because, unlike financial capital, which is a resource held by an individual, the benefits of forms of social organization are not held by actors, but are results of the participation of actors in advantageously organized groups.

Name generators
One type of quantitative social capital measure uses name generators to construct social networks and to measure the level of social capital. These networks are constructed by asking participants to name people that they interact with, such as "Name all the people you've discussed important matters with in the past six months." Name generators are often useful to construct core discussion networks of close ties, rather than weaker ties.

Social capital scales
Many studies measure social capital by asking the question: "do you trust the others?" Other researches analyse the participation in voluntary associations or civic activities.

To expand upon the methodological potential of measuring online and offline social bonding, as it relates to social capital, Williams (2006), offers a matrix of social capital measures that distinguishes social bridging as a form of less emotionally-tethered relationships compared to bonding. Bonding and bridging sub-scales are proposed, which have been adopted by over 300 scholarly articles.

Lin, Peng, Kim, Kim & LaRose (2012) offer a noteworthy application of the scale by measuring international residents originating from locations outside of the United States. The study found that social media platforms like Facebook provide an opportunity for increased social capital, but mostly for extroverts. However, less introverted social media users could engage social media and build social capital by connecting with Americans before arriving and then maintaining old relationships from home upon arriving to the states. The ultimate outcome of the study indicates that social capital is measurable and is a concept that may be operationalized to understand strategies for coping with cross-cultural immersion through online engagement.

Cohesion measures
The level of cohesion of a group also affects its social capital and vice versa. However, there is no one quantitative way of determining the level of cohesiveness, but rather a collection of social network models that researchers have used over the decades to operationalize social capital. One of the dominant methods is Ronald Burt's constraint measure, which taps into the role of tie strength and group cohesion. Another network-based model is network transitivity.

Economic measures
Knack and Keefer (1996) measured econometric correlations between confidence and civic cooperation norms, with economic growth in a large group of countries. They found that confidence and civic cooperation have a great impact in economic growth, and that in less polarized societies in terms of inequality and ethnic differences, social capital is bigger.

Narayan and Pritchet (1997) researched the associativity degree and economic performance in rural homes of Tanzania. They observed that even in high poverty indexes, families with higher levels of incomes had more participation in collective organizations. The social capital they accumulated because of this participation had individual benefits for them, and created collective benefits through different routes, for example: their agricultural practices were better than those of the families without participation (they had more information about agrochemicals, fertilizers and seeds); they had more information about the market; they were prepared to take more risks, because being part of a social network made them feel more protected; they had an influence on the improvement of public services, showing a bigger level of participation in schools; they cooperated more in the municipality level.

Group membership-based
In measuring political social capital, it is common to take the sum of society's membership of its groups. Groups with higher membership (such as political parties) contribute more to the amount of capital than groups with lower membership, although many groups with low membership (such as communities) still add up to be significant. While it may seem that this is limited by population, this need not be the case as people join multiple groups. In a study done by Yankee City, a community of 17,000 people was found to have over 22,000 different groups.

How a group relates to the rest of society also affects social capital, but in a different manner. Strong internal ties can in some cases weaken the group's perceived capital in the eyes of the general public, as in cases where the group is geared towards crime, distrust, intolerance, violence or hatred towards others. The Ku Klux Klan is an example of this kind of organizations.

Social behaviour-based
Foschi and Lauriola have presented a measure of sociability as a proxy of social capital. The authors demonstrated that facets of sociability can mediate between general personality traits and measures of civic involvement and political participation, as predictors of social capital, in a holistic model of political behavior.

The World Social Capital Monitor is an instrument for measuring social goods and social capital created by the United Nations Sustainable Development Group in partnership with civil society actors. The project identifies social values such as trust, solidarity, helpfulness, friendliness, hospitality and the willingness to finance public goods with the help of anonymous surveys. The surveys started in 2016.

Beyond Putnam
While influential, some have identified areas of concern or improvement within the work of Robert D. Putnam. This includes:
 * the lack of awareness of the structural socio-economic conditions of society.  For example, the level of income inequality.
 * the excessive determinism of the historical analysis.
 * Putnam's social capital index does not consider racial diversity which links to worse outcomes. Nor does Putnam consider ethnic diversity, which often creates barriers to cooperation and democratization.
 * the conflation of social capital with civil society, the lack of empirical evidence connecting social capital's promotion of economic growth and substantiating the decline of social capital in the United States in the last 35 years, and the assumption that social networks produce win-win relationships.

Social capital motives
Robison and colleagues (2012) measured the relative importance of selfishness and four social capital motives using resource allocation data collected in hypothetical surveys and non-hypothetical experiments.

The selfishness motive assumes that an agent's allocation of a scarce resource is independent of his relationships with others. This motive is sometimes referred to as the selfishness of preference assumption in neoclassical economics.

Social capital motives assume that agents' allocation of a scarce resource may be influenced by their social capital or sympathetic relationships with others which may produce socio-emotional goods that satisfy socio-emotional needs for validation and belonging:

 * 1) The first social capital motive seeks for validation by acting consistently with the values of one's ideal self.
 * 2) The second social capital motive seeks to be validated by others by winning their approval.
 * 3) The third social capital motive seeks to belong. Recognizing that one may not be able to influence the sympathy of others, persons seeking to belong may act to increase their own sympathy for others and the organizations or institutions they represent.
 * 4) The fourth social capital motive recognizes that our sympathy or social capital for another person will motivate us to act in their interest. In doing so we satisfy our own needs for validation and belonging. Empirical results reject the hypothesis often implied in economics that we are 95% selfish.

Relation with civil society
Various authors give definitions of civil society that refer to voluntary associations and organisations outside the market and state. This definition is very close to that of the third sector, which consists of "private organisations that are formed and sustained by groups of people acting voluntarily and without seeking personal profit to provide benefits for themselves or for others."

According to such authors as Walzer (1992), Alessandrini (2002), Newtown, Stolle & Rochon, Foley & Edwards (1997), and Walters, it is through civil society, or more accurately, the third sector, that individuals are able to establish and maintain relational networks. These voluntary associations also connect people with each other, build trust and reciprocity through informal, loosely structured associations, and consolidate society through altruism without obligation. It is "this range of activities, services and associations produced by... civil society" that constitutes the sources of social capital.

Not only has civil society been documented to produce sources of social capital, according to Lyons' Third Sector (2001), social capital does not appear in any guise under either the factors that enable or those that stimulate the growth of the third sector. Likewise, Onyx (2000) describes how social capital depends on an already functioning community. The idea that creating social capital (i.e., creating networks) will strengthen civil society underlies current Australian social policy aimed at bridging deepening social divisions. The goal is to reintegrate those marginalised from the rewards of the economic system into "the community." However, according to Onyx (2000), while the explicit aim of this policy is inclusion, its effects are exclusionary.

Foley and Edwards (1997) believe that "political systems...are important determinants of both the character of civil society and of the uses to which whatever social capital exists might be put." Alessandrini agrees, saying that, "in Australia in particular, neo-liberalism has been recast as economic rationalism and identified by several theorists and commentators as a danger to society at large because of the use to which they are putting social capital to work."

The resurgence of interest in social capital as a remedy for the cause of today's social problems draws directly on the assumption that these problems lie in the weakening of civil society. However this ignores the arguments of many theorists who believe that social capital leads to exclusion rather than to a stronger civil society. In international development, Ben Fine (2001) and John Harriss (2001) have been heavily critical of the inappropriate adoption of social capital as a supposed panacea (promoting civil society organisations and NGOs, for example, as agents of development) for the inequalities generated by neoliberal economic development. This leads to controversy as to the role of state institutions in the promotion of social capital. An abundance of social capital is seen as being almost a necessary condition for modern liberal democracy. A low level of social capital leads to an excessively rigid and unresponsive political system and high levels of corruption, in the political system and in the region as a whole. Formal public institutions require social capital in order to function properly, and while it is possible to have too much social capital (resulting in rapid changes and excessive regulation), it is decidedly worse to have too little.

Sample societies
Post-Communist: Kathleen Dowley and Brian Silver published an article entitled "Social Capital, Ethnicity and Support for Democracy in the Post-Communist States", in which they find that in post-communist states, higher levels of social capital did not equate to higher levels of democracy. However, higher levels of social capital led to higher support for democracy.

Third-world: A number of intellectuals in developing countries have argued that the idea of social capital, particularly when connected to certain ideas about civil society, is deeply implicated in contemporary modes of donor and NGO-driven imperialism and that it functions, primarily, to blame the poor for their condition.

Chinese: The concept of social capital in a Chinese social context has been closely linked with the concept of guanxi.

American: One attempt to measure social capital, involving the quantity, quality and strength of an individual social capital, was spearheaded by Corporate Alliance in the English-speaking market segment of the US, and Xentrum through the Latin American Chamber of Commerce in Utah on the Spanish-speaking population of the same country. With the assistance of software applications and web-based relationship-oriented systems such as LinkedIn, these kinds of organizations are expected to provide its members with a way to keep track of the number of their relationships, meetings designed to boost the strength of each relationship using group dynamics, executive retreats and networking events as well as training in how to reach out to higher circles of influential people.

Effects on women's engagement with politics
There are many factors that drive volume towards the ballot box, including education, employment, civil skills, and time. Careful evaluation of these fundamental factors often suggests that women do not vote at similar levels as men. However the gap between women and men voter turnout is diminishing and in some cases women are becoming more prevalent at the ballot box than their male counterparts. Recent research on social capital is now serving as an explanation for this change.

Social capital offers a wealth of resources and networks that facilitate political engagement. Since social capital is readily available no matter the type of community, it is able to override more traditional queues for political engagement; e.g.: education, employment, civil skills, etc.

There are unique ways in which women organize. These differences from men make social capital more personable and impressionable to women audiences thus creating a stronger presence in regards to political engagement. A few examples of these characteristics are:
 * Women's informal and formal networks tend toward care work that is often considered apolitical.
 * Women are also more likely to engage in local politics and social movement activities than in traditional forums focused on national politics.
 * Women are more likely to organize themselves in less hierarchical ways and to focus on creating consensus.

The often informal nature of female social capital allows women to politicize apolitical environments without conforming to masculine standards, thus keeping this activity at a low public profile. These differences are hard to recognize within the discourse of political engagement and may explain why social capital has not been considered as a tool for female political engagement until as of late.

Effects on health
A growing body of research has found that the presence of social capital through social networks and communities has a protective quality on health. Social capital affects health risk behavior in the sense that individuals who are embedded in a network or community rich in support, social trust, information, and norms, have resources that help achieve health goals. For example, a person who is sick with cancer may receive the information, money, or moral support needed to endure treatment and recover. Social capital also encourages social trust and membership. These factors can discourage individuals from engaging in risky health behaviors such as smoking and binge drinking.

Furthermore, neighbourhood social capital may also aid in buffering health inequities amongst children and adolescents. Social capital indicators such as neighbourhood cohesion, social support, and ties providing a bond between members of the same religion, have been found to be associated with better health despite financial or socioeconomic hardship. The function of social capital as a health buffer in circumstances of social disadvantage has also received attention in research on the health of minority ethnic populations. The relationships and networks that are maintained by an ethnic minority population in a geographical area where a high percentage of residents belong to the same ethnic group may lead to better health outcomes than would be expected based on other individual and neighbourhood characteristics. Such effects have been investigated in England, New Zealand, and the United States.

Inversely, a lack of social capital can impair health. For example, results from a survey given to 13- to 18-year-old students in Sweden showed that low social capital and low social trust are associated with higher rates of psychosomatic symptoms, musculoskeletal pain, and depression. Additionally, negative social capital can detract from health. Although there are only a few studies that assess social capital in criminalized populations, there is information that suggests that social capital does have a negative effect in broken communities. Deviant behavior is encouraged by deviant peers via favorable definitions and learning opportunities provided by network-based norms. However, in these same communities, an adjustment of norms (i.e. deviant peers being replaced by positive role models) can pose a positive effect. Researchers have also investigated the hypothesis that the health benefits of social capital depend on the socioeconomic resources an individual or community has available to them. For example, social capital may boost health only for those with higher levels of education, or more so for those with a higher rather than a lower income. This research is based on Bourdieu's notion that social, economic, and cultural capital are dependent on each other.

Influence of the Internet
Similar to watching the news and keeping abreast of current events, the use of the Internet can relate to an individual's level of social capital. In one study, informational uses of the Internet correlated positively with an individual's production of social capital, and social-recreational uses were negatively correlated (higher levels of these uses correlated with lower levels of social capital). An example supporting the former argument is the contribution of Peter Maranci's blog (Charlie on the Commuter Line) to address the train problems in Massachusetts. He created it after an incident where a lady passed out during a train ride due to the congestion in the train and help was delayed because of the congestion in the train and the inefficiency of the train conductor. His blog exposed the poor conditions of train stations, overcrowding train rides and inefficiency of the train conductor which eventually influenced changes within the transit system.

Another perspective holds that the rapid growth of social networking sites such as Facebook and Myspace suggests that individuals are creating a virtual-network consisting of both bonding and bridging social capital. Unlike face to face interaction, people can instantly connect with others in a targeted fashion by placing specific parameters with Internet use. This means that individuals can selectively connect with others based on ascertained interests, and backgrounds. Facebook is currently the most popular social networking site and touts many advantages to its users including serving as a social lubricant for individuals who otherwise have difficulties forming and maintaining both strong and weak ties with others.

This argument continues, although the preponderance of evidence shows a positive association between social capital and the Internet. Critics of virtual communities believe that the Internet replaces our strong bonds with online "weak-ties" or with socially empty interactions with the technology itself. Others fear that the Internet can create a world of "narcissism of similarity," where sociability is reduced to interactions between those that are similar in terms of ideology, race, or gender. A few articles suggest that technologically based interactions has a negative relationship with social capital by displacing time spent engaging in geographical/ in-person social activities. However, the consensus of research shows that the more time people spend online the more in-person contact they have, thus positively enhancing social capital.

Recent research, conducted in 2006, also shows that Internet users often have wider networks than those who access the Internet irregularly or not at all. When not considering family and work contacts, Internet users actually tend to have contact with a higher number of friends and relatives. This is supported by another study that shows that Internet users and non-Internet users do feel equally close to the same number of people; also the Internet users maintain relationships with 20% more people whom they "feel somewhat close" to.

Other research shows that younger people use the Internet as a supplemental medium for communication, rather than letting the Internet communication replace face-to-face contact. This supports the view that Internet communication does not hinder development of social capital and does not make people feel lonelier than before.

Ellison, Steinfield & Lampe (2007) suggest social capital exercised online is a result of relationships formed offline; whereby, bridging capital is enabled through a "maintenance" of relationships. Among respondents of this study, social capital built exclusively online creates weaker ties. A distinction of social bonding is offered by Ellison et al., 2007, suggesting bonds, or strong ties, are possible through social media, but less likely.

Catholic schools (Coleman and Hoffer)
Coleman and Hoffer collected quantitative data of 28,000 students in total 1,015 public, Catholic and other private high schools in America from the 7 years' period from 1980 to 1987. It was found from this longitudinal research that social capital in students' families and communities attributed to the much lower dropout rates in Catholic schools compared with the higher rates in public.

Teachman et al. (1996) further develop the family structure indicator suggested by Coleman. They criticise Coleman, who used only the number of parents present in the family, neglected the unseen effect of more discrete dimensions such as stepparents' and different types of single-parent families. They take into account of a detailed counting of family structure, not only with two biological parents or stepparent families, but also with types of single-parent families with each other (mother-only, father-only, never-married, and other). They also contribute to the literature by measuring parent-child interaction by the indicators of how often parents and children discuss school-related activities.

Morgan and Sorensen (1999) directly challenge Coleman for his lacking of an explicit mechanism to explain why Catholic schools students perform better than public school students on standardised tests of achievement. Researching students in Catholic schools and public schools again, they propose two comparable models of social capital effect on mathematic learning. One is on Catholic schools as norm-enforcing schools whereas another is on public schools as horizon-expanding schools. It is found that while social capital can bring about positive effect of maintaining an encompassing functional community in norm-enforcing schools, it also brings about the negative consequence of excessive monitoring. Creativity and exceptional achievement would be repressed as a result. Whereas in horizon expanding school, social closure is found to be negative for student's mathematic achievement. These schools explore a different type of social capital, such as information about opportunities in the extended social networks of parents and other adults. The consequence is that more learning is fostered than norm-enforcing Catholic school students. In sum, Morgan and Sorensen study implies that social capital is contextualised, one kind of social capital may be positive in this setting but is not necessarily still positive in another setting.

Community development
In the setting of education through Kilpatrick, Johns, and Mulford (2010) state that "social capital is a useful lens for analysing lifelong learning and its relationship to community development." Social capital is particularly important in terms of education. Also the importance of education with "schools being designed to create 'functioning community' - forging tighter links between parents and the school" linking that without this interaction, the social capital in this area is disadvantaged and demonstrates that social capital plays a major role in education.

Parental involvement
Putnam (2000) mentions in his book Bowling Alone, "Child development is powerfully shaped by social capital" and continues "presence of social capital has been linked to various positive outcomes, particularly in education." According to his book, these positive outcomes are the result of parents' social capital in a community. In states where there is a high social capital, there is also a high education performance. The similarity of these states is that parents were more associated with their children's education. Teachers have reported that when the parents participate more in their children's education and school life, it lowers levels of misbehavior, such as bringing weapons to school, engaging in physical violence, unauthorized absence, and being generally apathetic about education. Borrowing Coleman's quotation from Putnam's book, Coleman once mentioned we cannot understate "the importance of the embeddedness of young persons in the enclaves of adults most proximate to them, first and most prominent the family and second, a surrounding community of adults."

Without social capital in the area of education, teachers and parents who play a responsibility in a students learning, the significant impacts on their child's academic learning can rely on these factors. With focus on parents contributing to their child's academic progress as well as being influenced by social capital in education. Without the contribution by the parent in their child's education, gives parents less opportunity and participation in the student's life. As Tedin and Weiher (2010) state, "one of the most important factors in promoting student success is the active involvement of parents in a child's education." With parents also involved in activities and meetings the school conducts, the more involved parents are with other parents and the staff members. Thus parent involvement contributes to social capital with becoming more involved in the school community and participating makes the school a sustainable and easy to run community.

Sampson et al. (1999) stress the normative or goal-directed dimension of social capital, claiming that "resources or networks alone (e.g. voluntary associations, friendship ties, organisational density) are neutral---they may or may not be effective mechanism for achieving intended effect."

Difference in male and female
Marjoribanks and Kwok (1998) conducted a survey in Hong Kong secondary schools with 387 fourteen-year-old students with an aim to analyse female and male adolescents differential educational achievement by using social capital as the main analytic tool. In that research, social capital is approved of its different effects upon different genders.

Adaption and ethnic values
In his thesis "New Arrival Students in Hong Kong: Adaptation and School Performance", Hei Hang Hayes Tang (2002) argues that adaptation is a process of activation and accumulation of (cultural and social) capitals. The research findings show that supportive networks is the key determinant differentiating the divergent adaptation pathways. Supportive networks, as a form of social capital, is necessary for activating the cultural capital the newly arrived students possessed. The amount of accumulated capital is also relevant to further advancement in the ongoing adaptation process.

Min Zhou and Carl L. Bankston (1998), in their study of a Vietnamese community in New Orleans, found that preserving traditional ethnic values enable immigrants to integrate socially and to maintain solidarity in an ethnic community. Ethnic solidarity is especially important in the context where immigrants just arrive in the host society. In her article "Social Capital in Chinatown", Zhou examines how the process of adaptation of young Chinese Americans is affected by tangible forms of social relations between the community, immigrant families, and the younger generations. Chinatown serves as the basis of social capital that facilitates the accommodation of immigrant children in the expected directions. Ethnic support provides impetus to academic success. Furthermore, maintenance of literacy in native language also provides a form of social capital that contributes positively to academic achievement. Stanton-Salazar and Dornbusch found that bilingual students were more likely to obtain the necessary forms of institutional support to advance their school performance and their life chances.

Geography
In order to understand social capital as a subject in geography, one must look at it in a sense of space, place, and territory. In its relationship, the tenets of geography relate to the ideas of social capital in the family, community, and in the use of social networks. The biggest advocate for seeing social capital as a geographical subject was American economist and political scientist Robert Putnam. His main argument for classifying social capital as a geographical concept is that the relationships of people is shaped and molded by the areas in which they live.

There are many areas in which social capital can be defined by the theories and practices. In 1984, Anthony Giddens developed a theory in which he relates social structures and the actions that they produce. In his studies, he does not look at the individual participants of these structures, but how the structures and the social connections that stem from them are diffused over space. If this is the case, the continuous change in social structures could bring about a change in social capital, which can cause changes in community atmosphere. If an area is plagued by social organizations whose goals are to revolt against social norms, such as gangs, it can cause a negative social capital for the area causing those who disagreed with these organizations to relocate thus taking their positive social capital to a different space than the negative.

Another area where social capital can be seen as an area of study in geography is through the analysis of participation in volunteerism and its support of different governments. One area to look into with this is through those who participate in social organizations. People that participate are of different races, ages, and economic status. With these in mind, variances of the space in which these different demographics may vary, causing a difference in involvement among areas. Secondly, there are different social programs for different areas based on economic situation. A governmental organization would not place a welfare center in a wealthier neighborhood where it would have very limited support to the community, as it is not needed. Thirdly, social capital can be affected by the participation of individuals of a certain area based on the type of institutions that are placed there. Mohan supports this with the argument of J. Fox in his paper "Decentralization and Rural Development in Mexico", which states "structures of local governance in turn influence the capacity of grassroots communities to influence social investments." With this theory, if the involvement of a government in specific areas raises the involvement of individuals in social organizations and/or communities, this will in turn raise the social capital for that area. Since every area is different, the government takes that into consideration and will provide different areas with different institutions to fit their needs thus there will be different changes in social capital in different areas.

Leisure studies
In the context of leisure studies, social capital is seen as the consequence of investment in and cultivation of social relationships allowing an individual access to resources that would otherwise be unavailable to him or her. The concept of social capital in relation to leisure is grounded in a perspective that emphasizes the interconnectedness rather than the separateness of human activity and human goals. There is a significant connection between leisure and democratic social capital. Specific forms of leisure activity contribute to the development of the social capital central to democracy and democratic citizenship. The more an individual participates in social activities, the more autonomy the individual experiences, which will help her or his individual abilities and skills to develop. The greater the accumulation of social capital a person experiences, may transfer to other leisure activities as well as personal social roles, relationships and in other roles within a social structure.

Social capital, marriage, and romantic relationships
Kislev (2019) shows that following vast changes to the status of marriage in modern society singles present higher social capital. They also derive greater happiness from equal levels of social capital compared with married people. In a later study, Kislev (2020) shows the relation between romantic relationships desire and singleness. He shows that a lower degree of relationship desire has a significant effect on the relative importance of friends. Furthermore, both higher levels of the relative importance of friends and social satisfaction are negatively correlated with relationship desire.

Effects on informal economies
Social capital has been associated with the reduction in access to informal credit in informal economies (especially in developing countries). Mwangi and Ouma (2012) ran a bivariate probit model on financial access national survey data to the impact of social capital on financial inclusion in Kenya. They determined that membership to groups increased one's probability of getting an informal loan by 1.45% and also the more group memberships one held, the more likely they were to access an informal loan.

Similar results were revealed in a cross-sectional study run by Sarker in Bangladesh. Some other authors also note the importance of social capital among female entrepreneurship. Epo (2013) presented the case that social capital and micro loans increase the likelihood of female entrepreneurship in Cameroon. Epo did this by comparing the welfare outcomes of the entrepreneurs who both had access and no access. Other authors, however, disagree about the positive correlation between social capital and microfinance, Kanak and Iiguni argue that formation of social capital is largely dependent on strategies implemented by Microfinance Institutions. Kanak and Iiguni determined this while investigating social capital formation in a rural village in Bangladesh.

title: Social capital


text:
Individual capital

Individual capital, the economic view of talent, comprises inalienable or personal traits of persons, tied to their bodies and available only through their own free will, such as skill, creativity, enterprise, courage, capacity for moral example, non-communicable wisdom, invention or empathy, non-transferable personal trust and leadership.

As recognized in theories of economics
Individual talent and initiative was recognized as an intangible quality of persons in economics back to at least Adam Smith. He distinguished it (as "enterprise") from labour which can be coerced and is usually seen as strictly imitative (learned or transmitted, via such means as apprenticeship).

Marxist economics refers instead to "an individual's social capital—individuals are sources neither of creativity and innovation, nor management skill.  A problem with that analysis is that it simply cannot explain the substitution problem and lack of demand that occurs when, for instance, an understudy takes on a leading role, or a second author takes over writing a popular book series.  At the very least there must be some conditional, if not firm-specific then "class specific", special ability to command premiums for outstanding personal performance.

Neoclassical economics by contrast refers to "the individual in whom the human capital is ... embedded", which implies a strong association of the individual with the instructional capital they learn from, with little or no social capital influence. This is orthogonal to the Marxist view, but not necessarily opposed.

Human development theory reflects both distinctions: it sees labour as the yield of individual capital in the same way that neoclassical macro-economics sees financial capital as the yield of the looser idea of human capital. But the rest problem and social welfare function selection, as well as the subjective factors in behavioral finance, has led to a closer analysis of factors of production. In effect, the financial architecture is no longer trusted as an arbiter of the value of life as it was in neoclassical economics. Money is not seen as values-neutral, but as embodying a set of larger social choices about money supply rules, made by measuring well-being of whole populations.

Versus "human", "firm-specific", "individual social"
While conflated in many analyses with human capital, the latter term includes social capital (human relationships) and instructional capital (abstract texts and training materials and so on) that are not tied to any one person, do not die with them or leave employment with them, and therefore cannot be equated with talent alone. In intangibles measurement, value creation and value reporting metrics require all assets with such different characteristics to be categorized as different capital assets, so the more exact reference to the individual person is preferred.

Fusions of terminology are common. Sociological analysts refer to "individual-level elements of social capital" or "an individual's social capital" or just "individual social capital" while economic analysts often use the phrase firm-specific human capital. In either case the clearly includes individual capital but also some "activity-", "community-" or "firm-specific" social capital (community trust) and instructional capital (shareable knowledge or skills). This is easy to measure: its yield is your salary in your current job.

To the degree this is consistent if you take other work nearby, this opens the questions of what is not "firm-specific" and whether a nation is just a bigger "firm": Some analyses see political capital, or just "influence" or "trust of professionals" as a full style of capital of its own. Some ethicists, most clearly Jane Jacobs, see this as simple corruption. Nonetheless, corruption clearly has a cash value, involves some creativity to arrange, and is a decision factor. It is a skill like any other.

Versus "intellectual capital"
Perhaps because of this, not all theorists recognize individual capital as being as essential as labour, or distinct from social or political influence, or from instructional capacity. These theorists often refer to "intellectual capital", which more properly describes a debate or locus of complexity that arises when individuals take key instructional roles. Some refer to celebrity as another fusion, when individuals take key social roles.

However, a great many celebrities are clearly not "intellectual" achievers nor notable for any cognitive or analytic powers, e.g. Kim Kardashian, professional sports figures or other athletes. While they may through sheer exposure become involved in causes or controversies (as Paris Hilton did in the US presidential election, 2008) it's clearly not correct to label all individually unique talent or economic value as being an "intellectual" asset.

This failure to distinguish individual's objectively observed economic value (the power to promote or publicize products, draw attention to causes, etc.) from the "intellectual" powers is probably an elitist bias. Clearly, there are some individuals, including non-humans such as a racehorse, which have economic value unique to their individual body and being that cannot be captured or defined as an "intellectual" asset nor as a set of "social" relationships (because horses do not socialize in the sense humans do). Where slavery exists or has existed, there is clearly a value put on living bodies separate from their instructional or social selves.

Thus for analyzing historical or criminal economic activities, or even professional sports, the instructional capital vs. individual capital vs. social capital distinction is essential.

Investment
Those who differentiate individual capital tend to see it as something that one can invest in, directly, and see growth, directly. For individual skill, even skill at a highly imitative enterprise, like sports or mastery of a musical instrument, this is very often quite measurable. Many enterprises, for instance, a music conservatory or circus school or creative writing coach, are clearly making a living on the identification and (somewhat) measurable enhancement of the individual.

title: Individual capital