Which "Social Capital" is important for Economical Growth?

Social capital is viewed in three main dimensions; bonding, bridging and linking. Bonding is the connections between people in the similar cultural, family, educational, religious, and socioeconomic background.  Bridging is the connections in-between two or more similar groups.   Linking refers to the connections between people in different social strata and hierarchy. Most people have access to all three types to greater or lesser extent. Figure 1 given below shows the three main dimensions of social capital.

Figure 1. The dimensions of social capital

Bonding helps for the survival as it is the strong ties among people very similar to each other. Friends, family and close neighbors who belong to similar social strata and hierarchy are connected through bonding relationships. This gives strong mutual commitments among them making the trust among them very strong. Bonding relationships are also important in performing day to day activities. Bonding relationships are mostly seen within the communities as they give a community identity and belongingness.  It is also important in early childhood relationships as our children play and learn with children of our closely related similar neighbors and friends. It is said that bonding social capital is higher among neighbors with high education levels and those with longer periods of residency and between those who are not Hispanic (Larsen, Larissa. et al. 2004).  As a whole, bonding is used for basic survival and protection.

Bridging is making connections between heterogeneous groups. This helps to explore more opportunities. As people make connections with people in other similar communities, they learn new perspectives, techniques and knowledge. Bridging social capital is also more likely to foster social inclusion as it connects different communities (Schuller, Baron, & Field, 2000).

 Linking social capital provides access to more resources, ideas and information beyond the community level. Linking often refers to relationships with people with power who belongs to a higher social strata and hierarchy.  Although, linking social capital is viewed as a tool for getting ahead of poverty, it also has a disadvantage of misusing of power and recourses.

The poor use their bonding social capital to just “get by” while they use their bridging social capital to “get ahead” (Woolcock, Michael. and Narayan, Deepa. 2000). This notion is shown in figure 2.  Connections are also classified as strong ties and week ties. Week ties meaning just acquaintances and strong ties meaning emotional support, financial help and support in emergency situations (Granovetter, 1974). Bonding creates week ties while bridging and linking create strong ties.   In bridging relationships the relationship between growth and social capital is more positively related than the bonding relationships (Hawkins, L. Robert and Maurer, Katherine. 2009).

Figure 2. Social Capital and poverty transitions

A poor person having strong bonding social capital is going to get a high belongingness to the local community which more or less having similar poor people. Even though these bonding relationships help the poor in performing basic day to day activities, they no longer go beyond the community level. For example, when a poor person wants to get a job, the help that the other poor people in the community can provide is very limited and questionable.  The other poor people in the community having access to similar information and experience could fail to guide the fellow poor employment seeker. However, if the poor person has connections outside the community possibly with people in higher social strata, he/she could get better advice, guidance, recommendations and financial support. Mark Granovetter indicates that people mostly rely on personal contacts to find jobs than the formal channels available (1983). When these personal contacts belong to linking capital, the chances of getting the job and retaining in the job are very high.

After getting the job, employees with stronger social capital gets paid higher and promoted frequently. Strong social capital provides more opportunities to perform better in the workplace.  Ron Burt mentions that entrepreneurial opportunities are possible when a network has many “structural holes”, when an employee is connected with two other employees who are not themselves connected directly, it is known as a structural hole (2004). These types of structural holes provide more chances for better business opportunities. Therefore, bridging and linking social capital help in pay and promotions.

Linking social critical is crucial for the acquisition of financial and human capital. A poor person’s connection with brokers, financers and traders is going to help in finding funds for startup businesses. Linking social capital also help the poor in getting more human skills as he/she interacts with a diverse group of people.

A well connected poor is less vulnerable to change. A poor person who is rich in linking social capital fears less when experiencing unexpected situations. Social capital is also important in disaster resilience activities.  During hurricane Katrina the residence of New Orleans, a city in the south United States, got immediate support through their bonding relationships, but it is the linking and bridging relationships that helped them in long term survival and rehabilitation (Hawkins, L. Robert and Maurer, Katherine. 2009). After hurricane Katrina the local survivors took care of others in the community by providing food, shelter and security. This type of bonding relations only made sure that the survivors are safe for a short term period only. The bonding social capital failed to provide instructions for reconstruction of infrastructure or to provide means of employment. It is the bridging and linking social capital that bought help from outside the community and helped in the long term survival.

A poor getting higher education depends mostly on the social connections that he/she has and the strength of that relationship.  For a high school student to get more information about grad schools, he/she needs to have linking connections with teachers, seniors, siblings and parents of schoolmates, tutors and many more outside of the school and community.

Social connections also have its disadvantages. They can be easily violated. Often local landlords exploit relationships with high rates of interest and by misusing of power. Doctors and teachers in the rural villages have high amount of absenteeism.  We even see policemen getting bribed for illegal activities. All things considered, a certain amount of ethics and trust  should be maintained among relationships.

 In conclusion, bonding relationships provide a sense of belonging and security among all in the community but the bridging relationships help to go beyond the community level and achieve an economic growth. Similarly, poor making connections with poor can help in performing day to day activities but they don’t necessarily help in getting ahead of poverty.  It is the strong linking social capital that provides opportunities to alleviate poverty.